Asset Management Contract Template for the United Arab Emirates

An Asset Management Contract is a comprehensive legal agreement that governs the professional relationship between licensed asset managers and their clients in the United Arab Emirates. This document establishes the terms under which you engage a qualified asset management firm to handle your investment portfolio, ensuring compliance with UAE Federal Law No. 14 of 2018 and Securities and Commodities Authority regulations.

When do you need this document?

You need an Asset Management Contract when engaging a professional firm to manage your investments in the UAE market. This includes situations where you're a high-net-worth individual seeking portfolio diversification, an institutional investor requiring specialized management services, or a corporate entity looking to optimize cash reserves. The contract is essential when establishing discretionary investment authority, where the manager makes investment decisions on your behalf. You'll also need this agreement when setting up Shariah-compliant investment portfolios, family office services, or when transitioning from self-managed to professional asset management. Sovereign wealth funds, pension funds, and insurance companies operating in the UAE require these contracts to formalize their investment management relationships.

Key legal considerations

Your Asset Management Contract must clearly define the scope of discretionary authority granted to the manager, including investment parameters, risk tolerance levels, and prohibited investments. Fee structures require detailed specification, including management fees, performance fees, and any additional charges, with transparency mandated under UAE regulations. The agreement must establish comprehensive reporting requirements, detailing frequency and format of performance reports, transaction summaries, and compliance updates. Risk disclosure provisions are crucial, ensuring you understand potential losses and market volatility impacts. The contract should include termination clauses outlining notice periods, asset transfer procedures, and final accounting requirements. Liability limitations and indemnification provisions protect both parties while ensuring the manager's fiduciary responsibilities are clearly defined.

Legal requirements in United Arab Emirates

Under UAE Federal Law No. 14 of 2018, asset managers must hold valid licenses from the UAE Central Bank or relevant free zone authorities before entering into management agreements. The contract must comply with SCA Decision No. 3/R.M of 2017, which governs investment fund regulations and operational requirements. Anti-money laundering compliance under Federal Law No. 20 of 2018 requires specific client identification and due diligence clauses within the agreement. The contract must adhere to UAE Commercial Companies Law provisions regarding corporate governance and operational standards. For Shariah-compliant portfolios, the agreement must include Shariah board oversight provisions and compliance certification requirements. The document must be executed in accordance with UAE Civil Code contract formation principles, including proper offer, acceptance, and consideration elements. Additionally, the agreement must specify the governing law and jurisdiction for dispute resolution, typically UAE courts or DIFC arbitration.