A presentation to a room that is not all professional is a retail offer.

An investor event, a conference session, a family gathering at which a manager presents a vehicle, a dinner a bank hosts for its clients, a panel on which the manager describes what it is raising: each is a placement, and each is tested by the regime of every state whose residents are present, person by person. The room is not classified. The people in it are, and the placement is lawful only if every one of them passes the test of the tier the vehicle sits in and was reached by the route of the state they sit in. A manager that presents to a room has made as many offers as there are persons in it, in as many states as they came from, and the weakest of those offers is the character of the whole. The regulator that inquires does not ask how many professionals were present; it asks who was not.

This note sets out how the failure happens and why it is ordinary, what each regime does with one unclassified person, the two things a manager controls, the generic presentation and where each regime draws its line, the states in the room and what each resident carries, the organiser's assurance and why it cannot be filed, the record of the room, the online room, a comparison, a worked event as a type, cases, what each party holds, the sequence, questions, terms and what to read.

How the failure happens

It is ordinary, and it happens to careful managers. A professional investor brings a colleague who is not classified, because the colleague is learning the business. A family office's principal brings a family member who holds nothing in their own name and has never been assessed. A conference organiser admits advisers whose own clients are retail, and the advisers take notes for their clients. A sovereign's delegation includes a junior official. A bank's dinner includes a client the bank classified as retail under its own rules and invited because the client asked. The presentation is the same; the audience has changed, and with it the offer's character, and the manager at the lectern cannot tell from the lectern.

What each regime does with one person

In the centres, an exempt or qualified investor fund offered to a person who is not a professional client has been offered outside its tier, and the manager's financial promotion has gone to a person it may not go to. The communication is then tested as a retail communication, under the retail promotion rules it did not follow: the balanced presentation, the prescribed risk warnings, the restrictions on performance and targets. One retail person in the room converts the presentation into a retail promotion for that person, and the breach is the manager's.

In the Kingdom, the regulations confine advertisements for privately placed securities to persons to whom a private placement may lawfully be made, and a room with one person outside the institutional and qualified categories is an advertisement beyond them. In Kuwait, a presentation of a scheme to any person is marketing of the scheme, permitted by the licensed person's permit for the class it covers or not at all, and a person outside the class is a person marketed to without permission. In Qatar, every person in the room is a person in the count, and a room that is public is a public invitation that ends the count's protection whatever the number.

The two things a manager controls

The guest list, and what is said.

A manager who presents a specific vehicle does so to a list of named persons whose classification it holds, and declines to present to a room it cannot classify. The list is the manager's, not the organiser's. It is prepared before the event, each name classified under the tier and, for a Gulf resident, confirmed as reached by the state's route, and a person not on the list is not in the room when the vehicle is named. A manager that cannot hold the list does not present the vehicle.

Where the room cannot be controlled, the presentation is generic: the manager's approach, the asset class, the markets, the method, the people, with no vehicle named, no terms, no seed asset, no target and no invitation. The line between a generic presentation and an offer is drawn differently by each regime and drawn narrowly by all of them. A slide with a fund's name on it is an offer of that fund in most readings; a slide with a target return is an offer in all of them; a slide with a seed asset is a representation as well as an offer.

The states in the room

A room in one of the centres may hold residents of four Gulf states, and each resident carries their own state's regime with them. The Saudi institution is reached only through a distributor, after notification, and a presentation to it by the manager is an offer outside the distributor. The Kuwaiti one is reached only under a permit for the class it is in, by the licensed person. The Qatari one is in the count or is the bank's client. The resident of the other centre is reached under that centre's rules. A manager who presents a specific vehicle to all of them at once has placed in four states at once, and has done so lawfully only if each regime's route was taken before the meeting, which means the distributor, the licensed person and the bank were in the room or the Gulf residents were not.

Why the rules test persons rather than rooms

Every marketing regime protects persons, because the harm it exists to prevent happens to a person: a retail investor who buys something they could not evaluate, on a communication designed for somebody who could. A regime that tested rooms would let a manager assemble a room of ninety-nine professionals and one retail person and call it a professional room, and the one retail person would be the harm the regime exists to prevent. The person-by-person test is not a technicality; it is the regime applied to the person it protects. The manager who finds it inconvenient is finding the regime inconvenient, and the regime was written by people who anticipated the inconvenience and decided the person mattered more.

The same logic governs the generic presentation. The regimes do not forbid a manager from describing itself to anybody; they forbid the offer of a specific vehicle to a person who has not been classified. A manager that keeps the two apart has kept the regime's distinction, and a manager that blurs them has made the offer the regime restricts.

The line between generic and specific, drawn for each regime

In the centres, the question is whether the communication is an invitation or inducement to engage in investment activity in a particular investment; a description of the manager's method is not, a description of a vehicle's strategy with an indication that it is open is, and a name with a target is. In the Kingdom, the question is whether the communication is an advertisement for the securities of a fund; a description of the manager's markets is not, a statement that the manager is raising a fund for those markets is, and the distributor's view is the one that counts because the distributor files the advertisements. In Kuwait, the question is whether the scheme is being marketed; the module's definition reaches any promotion of the scheme, and a manager's remark that it is raising a fund is a promotion of that scheme. In Qatar, the question is whether securities are offered and whether the invitation is public; a conference remark about a fund is an offer to the room and a public invitation if the room is public.

The generic deck is therefore drafted to the strictest of the four, which is usually Kuwait's or the Kingdom's: the manager, its people, its method, its markets and its typologies, its readings of the regimes, and nothing about any vehicle, open or closed, named or unnamed.

What the placement team is told

The placement team's instruction for rooms is a page. No vehicle is named in any room for which the team does not hold the classified list. No deck other than the generic one is shown in such a room. No target, no seed, no terms, no "we are raising" in such a room. Every name taken in such a room is logged and passed to compliance for classification and routing before any contact. The intermediaries are invited to every room in which a vehicle is named to their state's residents. The record of every room is completed within a day. The page is signed by each member of the team, and a breach of it is a breach of the manager's compliance manual before it is a breach of any regime.

The bank's dinner, read closely

The bank's dinner is the hardest room, because the bank is a regulated party with its own classifications and the manager assumes the bank has done the work. The bank has classified its clients under its own conduct rules, which are not the centre's tier test and not the Kingdom's glossary; it has invited whom it chose; and its clients' presence at a dinner is not the central bank's route, which requires the bank to market under the instructions with the prescribed documents and acknowledgements. A manager that presents a fund at a bank's dinner has made an offer to each client directly, outside the bank's route, to persons classified by nobody for the manager's purposes. The dinner is a generic room unless the bank has confirmed in writing, for each attendee, the classification and the route, which banks do not do for dinners.

Where it surfaces

At the conference, when a recording of the session circulates with the fund's name in it.

At the private meeting, when a guest's presence is discovered in the record after the vehicle was named.

At the bank, when its compliance function reviews the dinner and finds its retail clients marketed a foreign fund.

At the Saudi distributor, which learns that Saudi institutions heard the manager describe the fund before the notification.

At the Qatari count, when the room's attendance is added to it.

At the regulator's review, which asks for the record of every room in which the vehicle was named.

The cost of getting it wrong

One room can breach four regimes at once, and the consequences arrive separately: a retail promotion in the centre, an advertisement beyond the categories in the Kingdom, marketing without permission in Kuwait, a public invitation in Qatar. Each is a finding in its own state, each reaches the intermediary the manager uses there, and each is reported by a person who was in the room, because rooms are full of people who talk. The classified list, the generic deck and the record cost a day per event. A manager that has them presents wherever it is invited; one that does not presents once.

The organiser's assurance

A conference organiser, a bank hosting a dinner, a family office convening its peers: each will say that everyone present is institutional, or professional, or sophisticated. The assurance cannot be filed. The manager's tier requires the manager's classification of each person, on the criteria, with the evidence; the Kingdom's regime requires the distributor's; Kuwait's the licensed person's class; Qatar's the count or the bank's own. An organiser's word is evidence of the organiser's belief, and a regulator reads it as such. A manager that presented on the strength of it has presented to a room it did not classify.

The record of the room

A manager that presents a vehicle keeps a record of the room: the list, the classification of each name, the route for each Gulf resident, who actually attended, what was shown, which version, and who received it afterwards. The record is the evidence that the placement was confined to permitted persons, and it is what each regulator reads if it inquires. A record that shows a list of twelve and an attendance of fifteen is a record of three persons the manager cannot account for.

The online room

A webinar, a recorded presentation, a page behind a login: each is a room, and its composition is whoever logged in and whoever was sent the link. A recorded presentation that names a vehicle and circulates is a promotion to everybody who watches it, in every state they watch from. The online room is controlled the way the physical one is: by a list, by classification before access, by a link that does not forward, and by a generic version for anything that cannot be controlled. A manager's public webinar describes the manager.

By room · by regime	The centres	The Kingdom	Kuwait	Qatar
A classified list, vehicle named	Lawful to professional clients	Lawful only through the distributor after notification	Lawful only by the licensed person under the permit to the class	Within the count, or the bank's clients through the bank
One unclassified person present	A retail promotion to that person	An advertisement beyond the categories	Marketing without permission to that person	A person in the count; public if the room is
A generic presentation, no vehicle	Not a promotion of any vehicle	Not an advertisement of securities	Not marketing of a scheme	Not an offer
The organiser's assurance	Not a classification	Not the distributor's classification	Not the class	Not the count

A timeline, as a type

Month one: the two decks are prepared and the room instruction signed by the placement team. Month two: the regional conference; the generic deck; forty names taken and logged; compliance classifies twenty-two and routes each through its state's regime; eighteen are not approached because they fail the test or sit in a state whose route is not yet open. Month three: the private meeting for twelve classified institutions with the distributor and the licensed person present; one guest asked to step out; the vehicle named; the record completed. Month four: a bank proposes a dinner; the manager presents generically and the bank markets the fund to its clients afterwards under the central bank's route with the Arabic prospectus. Month six: first close. Year two: the regulator's review asks for the record of every room; the file holds four records, each with its list, attendance and materials.

The structure paper's page

The structure paper carries a page on rooms: the generic deck's contents and the line it keeps for each regime; the classified list's fields; the intermediaries' presence rule; the online room's controls; the record's fields; and the placement team's instruction. The page is what the compliance function audits against and what the regulator reads beside the records. It is a short page, and a manager that has it has solved the commonest placement breach in the region before the first event.

Reading the rule with the investor

Institutional investors prefer the discipline, because their own regimes impose it on them. A sovereign's investment staff who attend a generic presentation and then receive the vehicle's documents through the state's route have a file that their own compliance function can close; the same staff who heard the fund pitched at a conference have a file their compliance function questions. A manager that presents generically and places by design is a manager whose investors' own compliance functions trust, and that trust is worth more than the room.

The materials after the room

What leaves the room matters as much as what was said in it. A deck handed out, emailed afterwards or left on a table is a communication to whoever holds it, and a generic deck can be circulated without consequence while a specific one cannot. The rule is that the specific deck is never handed out: it is shown, in the private meeting, to the classified list, and the documents that follow go through the route to each person individually, with the version recorded. A specific deck that leaves a private meeting in an attendee's bag has left the manager's control and entered every state the attendee visits.

Family gatherings and the principal's guests

A family office convening its peers, or a principal hosting investors at a private residence, is a room whose composition the host controls and the manager does not. The manager treats it as a generic room unless the host supplies the list in advance and the manager classifies each name, which hosts of private gatherings rarely accept. The manager's courtesy to the host is the generic presentation, which tells the room what the manager does and invites nothing; the manager's approach to any guest who asks is through the log and the route. A principal who wants the manager to pitch to the room is told why it cannot, and a principal with its own advisers understands.

The three questions before any room

Before any room, the manager's compliance function asks three questions. Do we hold the classified list for every person who will be present, and is each Gulf resident's route open. If not, is the generic deck the only deck. And will the record be completed. A room for which the first answer is no and the second is no is a room the manager declines. The three questions take a minute and they are the whole of the discipline.

An event, as a type

A manager is invited to speak at a regional conference in one of the centres, in a session on real assets, to a room of two hundred. It prepares the generic deck: its method, its markets, its typologies, its view of the onshore interfaces, and nothing about the fund it is raising. It presents. Afterwards it takes names, and each name is classified and routed through the state's regime before any specific approach. In the same week it hosts a private meeting for twelve named institutions whose classification it holds, with the Saudi distributor present for the two Saudi institutions, the Kuwaiti licensed person present for the Kuwaiti sovereign, and the Qatari count recorded for the two Qatari institutions. The vehicle is named in the private meeting and not at the conference. Both rooms are recorded.

Four cases, as types

A manager presents its new fund at an industry conference in one of the centres to a room of two hundred. The organiser's list includes family members, advisers and junior staff. The manager has made a public offer in the centre, a retail promotion to every unclassified person, and an offer in four Gulf states without a route in any of them; the count in Qatar is exceeded by the room alone.

A manager presents a specific vehicle to a named list of twelve classified institutions in a private room, after the distributor's notification in the Kingdom, the permit in Kuwait and within the count in Qatar. One institution brings an unclassified guest. The manager asks the guest to step out before the vehicle is named, and records it; the guest is classified the following week and approached through the route.

A manager invited to a large room presents its method and its markets with no vehicle, no terms and no invitation, and takes names afterwards for classification and routing through each state's regime. The presentation was not an offer anywhere, and the names become a placement run by design.

A bank hosts a dinner for twenty of its private-banking clients and asks the manager to present its fund. The bank has classified its clients under its own rules; three are retail under the bank's rules and were invited because they asked. The manager presents the fund. The bank's compliance function, reviewing the event, finds its own retail clients were marketed a foreign fund outside the central bank's route, and declines to act for the manager again.

What each party holds

The manager holds the list, the classification of each name, the route for each Gulf resident, the two decks, and the record of the room.

The placement team holds the discipline of not naming a vehicle to a room it cannot classify.

The intermediaries hold their presence in the room where the vehicle is named to their state's residents, and their records.

The organiser or host holds an assurance nobody can file.

The regulators hold the room's composition, which they learn from the record or from a person who was there.

The sequence

1. One list is prepared for every room in which a vehicle will be named, with a classification per name and a route per Gulf resident.
2. One generic version of the presentation is prepared for any room that cannot be classified, with nothing in it a regime reads as an offer.
3. Every name taken at a generic presentation is classified and routed through the state's regime before any specific approach.
4. The intermediaries are present, or their routes already taken, for every Gulf resident in a room where a vehicle is named.
5. The record of each room is kept: list, attendance, what was shown, who received it afterwards.
6. The online room is controlled as the physical one.

Questions a manager asks

Can the vehicle be mentioned by name if no terms are given. A name is an offer of that vehicle in most readings, and an invitation to ask about it in all of them.

What if the unclassified person is a colleague of a classified institution. The colleague is a person, and the rules test persons; a colleague not classified is a retail person in the room.

Can the manager rely on the conference's professional-investor badge. It is the organiser's belief and not a classification; the manager classifies or presents generically.

Is a panel discussion a presentation. A panel on which the manager describes what it is raising is a presentation of that vehicle to the room.

What about a recorded session. A recording is a room whose composition is everybody who watches it, and it is generic or it is not recorded.

Can the intermediaries attend the manager's private meeting. They should, for their state's residents, because the offer to those residents is theirs to make and the record should show them making it.

The cheap discipline is one list, one classification per name, one regime per state, one version of the presentation for a room that could not be classified, and one record per room. That discipline is the placement, and the slides are the smallest part of it; a manager that has it can speak anywhere, and a manager that does not has to choose between silence and a finding.

Terms used

Room: any gathering, physical or online, at which a manager presents.

Classified list: the named persons whose classification the manager holds, prepared before the room.

Generic presentation: a presentation of the manager, its method and its markets, with no vehicle, terms, seed, target or invitation.

Route: the lawful path by which a Gulf resident may be approached, which must be taken before the vehicle is named to them.

Organiser's assurance: the host's statement about the room's composition, which is not a classification.

Record of the room: the list, the attendance, the materials and the onward circulation.

What to read

Each centre's financial promotion rules on communications to non-professional persons and on the content of communications; the Kingdom's regulations on advertisements for privately placed securities; Kuwait's module on marketing and the permit's class; Qatar's count and the central bank's instructions on banks' marketing to their clients. On this site, the marketing and perimeter rooms under Jurisdictions and the ADGM conduct room.