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The Discretionary Management Agreement is a crucial document used in the UAE financial services sector when a client wishes to delegate investment decision-making authority to a professional investment manager. This agreement is particularly important in the UAE market where investment management activities are strictly regulated by the Securities and Commodities Authority (SCA). The document establishes the legal framework for the relationship, covering essential aspects such as investment strategy, risk management, fees, and regulatory compliance. It is designed to meet the requirements of UAE Federal Laws and SCA regulations while protecting both the manager's and client's interests. The agreement is commonly used by financial institutions, asset management firms, and wealth managers serving both local and international clients, and must incorporate specific UAE regulatory requirements including client classification, AML procedures, and local market practices.

1. Parties: Identification of the investment manager and the client, including their full legal names, addresses, and registration details

2. Background: Context of the agreement, including the manager's regulatory status and the client's desire to appoint the manager

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Appointment and Authority: Formal appointment of the manager and scope of discretionary authority

5. Investment Objectives and Restrictions: Agreed investment strategy, objectives, and any specific investment restrictions

6. Client Classification: Classification of the client according to UAE regulatory requirements (retail/professional/institutional)

7. Services and Obligations: Detailed description of services to be provided and manager's obligations

8. Client's Obligations: Client's responsibilities including providing information and maintaining minimum account balances

9. Fees and Expenses: All fees, charges, and expenses payable to the manager or third parties

10. Representations and Warranties: Standard declarations by both parties regarding capacity, authority, and compliance

11. Risk Disclosures: Mandatory risk warnings and acknowledgments

12. Compliance with Laws: Obligations regarding AML, KYC, and other regulatory requirements

13. Reporting and Valuations: Frequency and content of portfolio reports and valuation methods

14. Confidentiality: Protection and handling of confidential information

15. Term and Termination: Duration of agreement and circumstances for termination

16. Liability and Indemnification: Extent of manager's liability and mutual indemnification provisions

17. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction for disputes

18. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment