1) AFC Club Licensing Regulations

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AFCCLUB LICENSING

REGULATIONS

[ VERSION 01/2010 ]



TABLE OF CONTENTS

Page

Definitions 5

1 Introduction 13

1.1 Objectives for the AFC Club Licensing System 14

2 Procedure 15

2.1 Criteria Graduation 15

2.1.1 Principle 15

2.2 Licensing Implementation 15

2.2.1 Principle 15

2.2.2 Implementation at National Association Level 16

2.2.3 Existence of a Legal Basis within the Statutes 162.2.4 Possibility for the National Association to Delegate the

Club Licensing System to an Affiliated League 16

2.2.5 Rules Regarding Sanctions of the National Club Licensing System 17

2.2.6 Integration of the Club Licensing Regulations into a National Club Licensing Regulations for the 2013Season 18

2.2.7 Exception Process and Policy 19

2.2.8 Accreditation Process 21

2.2.9 Decision on the Application of the System to its Licence Applicants 22

2.3 Spot-Checks by AFC 22

2.3.1 Principle 22

2.4 Development Process 23

2.4.1 Principle 23

2.5 Bodies of AFC 23

2.5.1 Principle 23

3 Licensor 243.1 Introduction 24

3.2 Licensor Definition 24

3.2.1 Who is the Licensor? 24

3.2.2 Decision-Making Bodies 24

3.2.3 Licensing Administration 25

3.2.4 First Instance Body (FIB) 25

3.2.5 Appeals Body (AB) 25

3.2.6 Requirements of Members of the Decision-Making

Bodies 263.2.7 Procedure of Decision Making 27

AFC Club Licensing Regulations 2



TABLE OF CONTENTS (cont’d)

Page

4 Licence Applicant and Licence 29

4.1 Introduction 294.2 Circle of Licence Applicants 29

4.2.1 Authority to Define Licence Applicants 29

4.2.2 Status of Football Clubs 29

4.2.3 Legal Form of Football Clubs 29

4.3 Definition of Licence Applicants 29

4.3.1 Principle 29

4.4 Licence 32

4.4.1 Principle 32

4.5 Admission to AFC Club Competitions 334.5.1 Principle 33

4.6 Extraordinary Application of the Club Licensing System for Entering AFC Club Competitions 34

4.6.1 Principle 34

4.6.2 Procedure 34

5 Core Process 36

5.1 Introduction 36

5.1.1 Principle 36

6 Sporting Criteria 38

6.1 Introduction 38

6.2 Objectives 38

6.3 Benefits for Clubs 38

6.4 Criteria 39

6.4.1 “A” Criteria 39

6.4.2 “B” Criteria 41

6.4.3 “C” Criteria 41

7 Infrastructure Criteria 427.1 Introduction 42

7.2 Objectives 42

7.3 Benefits for Clubs 42

7.4 Criteria 43

7.4.1 “A” Criteria 43

7.4.2 “B” Criteria 47

7.4.3 “C” Criteria 48






DEFINITIONS

Definition

Accounting policies The specific principles, bases, conventions, rules andpractices adopted by an entity in preparing and presentingits financial statements.

AFC Club Licensing Manual (Manual)

Working document which describes the AFC Club Licensing Regulations. The guidelines of the AFC Club Licensing Regulations provide the licensor and licenceapplicants further understanding into the reasons behindthe criteria as well as a standard interpretation of thecriteria and assessment process.

AFC Club Licensing Regulations

The regulations consisting of five categories of criteria anda core process. The requirements of the AFC club licensingregulations must be transferred into a “National Club Licensing Regulations”.

AFC Club Competitions AFC Champions League, AFC Cup and/or AFC President’sCup

AFC Season See Season to be licensed

AFC Stadium Regulation Working document which describes the requirements to be

fulfilled by the clubs with regard to the Stadium to beused for AFC club competition matches.

Agreed-upon procedures(AUP)

In an engagement to perform agreed-upon procedures, anauditor is engaged to carry out those procedures of anaudit nature to which the auditor and the entity and anyappropriate third parties have agreed and to report onfactual findings. The recipients of the report must formtheir own conclusions from the report by the auditor. Thereport is restricted to those parties that have agreed to theprocedures to be performed since others, unaware of the

reasons for the procedures, may misinterpret the results.

Amortisation The systematic allocation of the depreciable amount of anintangible asset over its useful life. For example, for thecapitalized direct costs of acquiring a player’s registration,the useful life is the contract life.

Annual financialstatements

A complete set of financial statements prepared as at thestatutory closing date, normally including a balance sheet,profit and loss account, a statement of cash flows andthose notes, other statements and explanatory material

that are an integral part of the financial statements.




Associate An entity, including an unincorporated entity such as apartnership, over which the investor has significantinfluence and that is neither a subsidiary nor an interest ina joint venture.

Assessment process See Core Process

Audit The objective of an audit of financial statements is toenable the auditor to express an opinion whether thefinancial statements are prepared, in all material respect,in accordance with an identified financial reportingframework. The phrases used to express the auditor’sopinion are “give a true and fair view” or “present fairly,in all material respects”, which are equivalent terms. Asimilar objective applies to the audit of financial or other

information prepared in accordance with appropriatecriteria.

In an audit engagement, the auditor provides a high butnot absolute, level of assurance that the informationsubject to audit is free of material misstatement. This isexpressed positively in the audit report as reasonableassurance.

Budget The schedules containing an entity’s future financialinformation, based on management’s assumptions aboutevents that may occur in the future and possible actions

by an entity.

Cash and cashequivalents

Cash comprises cash on hand and demand deposits. Cashequivalents are short term, highly liquid investments thatare readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Consolidated financialstatement

Financial statements of a group presented as those of asingle economic company.

Control The power to govern the financial and operating policiesof an entity so as to obtain benefits from its activities.

Core process Minimum requirements that the licensor has to put inplace for verification of compliance with the criteriadescribed in the regulations as basis for the issuance of alicence to an applicant.

Criteria Requirements to be fulfilled by the licence applicantdivided into five categories (sporting, infrastructure,personnel and administrative, legal and financial), with

each category being split into three grades: A, B, C(mandatory and best practice recommendation)




Deadline for submissionof the list of licensedclubs to AFC

The date by which each licensor must submit to AFC thelist of clubs that were granted with a licence by thenational decision-making bodies. This date is defined byAFC each year and announced to the licensors.

Deadline for submissionof the application to thelicensor

The date by which each licensor requires licence applicantsto have submitted all relevant information for itsapplication for a licence.

Depreciable amount The cost of an asset, or other amount substituted for cost,less its residual value.

Residual value is the estimated amount that an entity would currently obtain from disposal of the asset, afterdeducting the estimated costs of disposal, if the asset werealready of the age and in the condition expected at the

end of its useful economic life.

Direct costs of acquiringa player’s registration

Those payments to third parties for the acquisition of aplayer’s registration, excluding any internal developmentor other costs. Costs to include:-

a) Transfer fee payable for securing the registration;

b) Transfer fee levy (if applicable); and

c) Other direct costs of obtaining the player’sregistration (eg. payments to agents for services tothe club, legal fees, compensation payments for

training and development of young players inaccordance with FIFA and/or domestic transferregulations and other direct costs in connection withthe transfer).

Employee benefits All forms of consideration given by an entity in exchangefor service rendered by employees.

Event or condition ofmajor economicimportance

An event or condition is of major economic importance ifit is considered material to the financial statements of thereporting entity and would require a different (adverse)presentation of the results of the operations, financialposition and net assets of the reporting entity if it hadoccurred during the preceding financial year of interimperiod.

Financial year The financial reporting period ending on the statutoryclosing date, whether this is a year or not, and which isnot an interim period.

Future financialinformation

Information about the prospective financial effects offuture events and possible actions on the entityconcerned.




Going concern A reporting entity is normally viewed as a going concern,that is, as continuing in operation for the foreseeablefuture. It is assumed that the entity has neither theintention nor the necessity of liquidation, ceasing tradingnor seeking protection from creditors pursuant to laws orregulations.

Group A parent and all its subsidiaries.

A parent is an entity that has one or more subsidiaries. Asubsidiary is an entity, including an unincorporated entitysuch as a partnership that is controlled by another entity(known as the parent).

Historic financialinformation

Information about the financial effects of past events onthe entity concerned. Historic financial information is in

respect of the financial performance and position prior tothe licensing decision.

Independent auditor An auditor who is independent of the entity, incompliance with the IFAC Code of Ethics for ProfessionalAccountants. For additional information, visit www.ifac.org. The term ‘auditor’ may also be used whendescribing related services or assurance engagements otherthan audits.

Intangible asset An identifiable non-monetary asset without physical

substance, such as the registration of a player.

Interim financialstatements

A financial report containing either a complete set offinancial statements or a set of condensed financialstatements for an interim period.

Interim period A financial reporting period shorter than a full financial year.

International Financial Reporting Standards

(“IFRS”)

Standards and Interpretations adopted by theInternational Accounting Standards Board (IASB). They

comprise:-a) International Financial Reporting Standards;

b) International Accounting Standards; and

c) Interpretations originated by the International Financial Reporting Interpretations Committee (IFRIC)or the former Standing Interpretations Committee(SIC).

International Standardson Auditing (“ISA”)

The International Auditing and Assurance Standards Board(“IAASB”) issues International Standards on Auditing as

the standards to be applied by auditors in reporting onhistorical financial information. According to the IAASB,




one of its objectives is ‘establishing high quality auditingstandards and guidance for financial statement audits thatare generally accepted and recognized by investors,auditors, governments, banking regulators, securitiesregulators and other key stakeholders across the world’.

For additional information about the IAASB and ISA, visit www.ifac.org

Joint venture A contractual arrangement whereby two or more parties(the venturers) undertake an economic activity that issubject to joint control.

Where an entity included in the consolidation manages jointly with another entity not included in theconsolidation an economic activity that other entity (Joint Venture) may be dealt with in the Group accounts.

Licence Certificate confirming fulfillment of all mandatoryminimum requirements by the licensee in order to startthe admission procedure for AFC Champions League.

Licence applicant Legal entity fully and solely responsible for the footballteam participating in national and international clubcompetitions which applies for a licence.

Licensee Licence applicant which has been granted with a licence by the licensor.

Licensing administration Body or staff within the licensor that deals with clublicensing matters.

Licensing cycle See Core process

Licensing season Season for which a licence has been granted (cf. alsoSeason to be licensed)

Licensing process Process in which a licence is granted

Licensor Body that operates the national licensing system and

grants the licence

Management (personnel) Describes those responsible for the preparation and fairrepresentation of the financial statements and otherfinancial information. Other terms may be appropriatedepending on the legal framework in the particular jurisdiction. For example, in some jurisdictions, theappropriate reference may be ‘to those charged withgovernance’ (for example, the directors).

Material or Materiality Omissions or misstatements of items or information are

material if they could, individually or collectively, influencethe economic decisions of users taken on the basis of the




financial information. Materiality depends on the size andnature of the omission or misstatement judged in thesurrounding circumstances or context. The size or natureof the item, or a combination of both, could be thedetermining factor.

May Indicates a party’s discretion to do something (ie. optional,rather than mandatory)

Must or shall Indicates an obligation to do something

National accountingpractice

The accounting and reporting practices and disclosuresrequired of entities in a particular country.

National Club Licensing Regulations

Working document which describes the national clublicensing system in a particular country. It includes all

minimum requirements of the AFC club licensing systemas well as any specific national particularities andobjectives.

Parent An entity that has one or more subsidiaries.

Recoverable amount The higher of an asset’s fair value less costs to sell and its value in use. ‘Fair value less costs to sell’ is the amountobtainable from the sale of an asset in an arm’s lengthtransaction between knowledgeable, willing parties, lessthe costs of disposal. ‘Value in use’ is the present value of

future cash flows expected to be derived from the asset.

Registered member Any legal entity according to national law and/or nationalassociation statutes, which is member of the nationalassociation and/or its affiliated league.

Related party A party is related to an entity if:-

a) Directly, or indirectly through one or moreintermediaries, the party:-

i) controls, is controlled by, or is under commoncontrol with the entity (this includes parents,subsidiaries and fellow subsidiaries);

ii) has an interest in the entity that gives itsignificant influence over the entity; or

iii) has joint control over the entity;

b) the party is an associate of the entity;

c) the party is a joint venture in which the entity is a venturer;

d) the party is a member of the key management

personnel of the entity or its parent;e) the party is a close member of the family of any




individual referred to in (a) or (d);

f) the party is an entity that is controlled, jointlycontrolled or significantly influenced by, or for whichsignificant voting power in such entity resides with,directly or indirectly, any individual referred to in (d)or (e); or

g) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entitythat is a related party of the entity.

Reporting entity/entities The registered member and/or company or group which,according to the rules of this regulations, must provide thelicensor with respectively statutory or consolidatedfinancial statements.

Review The objective of an engagement to review financialinformation is to enable an auditor to express aconclusion whether, on the basis of the review, anythinghas come to the auditor’s attention that causes theauditor to believe that the financial information is notprepared, in all material respects, in accordance with anidentified financial reporting framework.

A review, in contrast to an audit, is not designed to obtainreasonable assurance that the financial information is freefrom material misstatement. A review consists of making

inquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and otherreview procedures. A review may bring significant mattersaffecting the financial information to the auditor’s, but itdoes not provide the evidence that would be required foran audit.

Season to be licensed Means the AFC season for which the licence applicant hasapplied for the licence; ie. 1 January – 31 December

Significant change Means an event that is considered material to the

documentation previously submitted to the licensor andthat would require a different presentation if it hadoccurred prior to the submission of the licensingdocumentation.

Significant influence The power to participate in the financial and operatingpolicy decisions of the investee but is not control or jointcontrol over those policies.

Stadium Means the venue for a competition match including, butnot limited to, all properties and facilities near to such

stadium (for example, offices, hospitality areas, presscentres and accreditation centres).




Statutory closing date The annual accounting reference date of the reportingentity.

Subsequent events Events or conditions occurring after the licensing decision.

Subsidiary An entity, including an unincorporated entity such as apartnership that is controlled by another entity (known asthe parent).

Supplementaryinformation

If the minimum requirements of criterion F.01 for contentand accounting are not met in the audited annualfinancial statements, additional information must beprepared and submitted by the licence applicant. Thecontent and presentation of the supplementaryinformation, if required at all, will vary between licenceapplicants depending on the amount of information

already disclosed in the separate audited annual financialstatements.




1 INTRODUCTION

This “AFC Club Licensing Regulations ” is the basic working document for nationalassociations which incorporates the AFC minimum requirements that must be

transformed into a “National Club Licensing Regulations ”. It comes into force on itsapproval by the AFC Executive Committee and applies for the first time for the 2013season.

This AFC Club Licensing Regulations is divided into two main sections.

The first section addresses the national association as the licensor , explaining its tasks,defining the licence applicant and the licensing bodies as well as the core process to beapplied.

The second section is directed at the clubs of the national association. The fivecategories of minimum criteria are described in five chapters, which are as follows:sporting criteria, infrastructure criteria, personnel and administrative criteria, legalcriteria and financial criteria. The criteria are divided into three different grades (“A”,“B” and “C”).

Each chapter also includes the objectives and the benefits for the clubs. The nationalassociations and clubs should first carefully read through the objectives of eachcategory of criteria.

For several criteria, the final wording has to be adapted by the licensor, taking into

account the particular situation of the national association, the status of football andits top-division clubs as well as the minimum standards of its current “National Club Licensing Regulations”.

In contrast, AFC lays down some “mandatory”, to ensure a certain unified qualitystandard throughout Asia, as a first step towards the development of Asian football.Some flexibility has been given to the discretion of the national association. In suchcircumstances the regulations shall be individually tailored by each licensor according toits specific needs and in compliance with national law.

The national associations are invited to:-1. Read and understand the AFC Club Licensing Regulations;

2. Decide, if the club licensing system applies to the national context (whichdivisions or clubs and which criteria);

3. Review the format (layout) and structure of the current “National Club Licensing Regulations” and adapt it accordingly, if available;

4. Take into account national law, statutes and regulations;

5. Adapt its own structure and relevant organisation according to the minimumrequirements regarding the core process and further procedures;




6. Consider increasing the minimum criteria set by AFC, and upgrading or addingother criteria for the National Club Licensing Regulations, according to the specificneeds and the existing quality of domestic competitions;

7. Exchange opinions and experiences with AFC and other AFC member associations;

8.

Set-up a working plan for the implementation of the new National Club Licensing Regulations taking into account the AFC deadlines for exceptions andaccreditation as well as the national decision-making process.

Each National Club Licensing Regulations will have to be accredited by AFC (cf. 2.3.7).

1.1 OBJECTIVES FOR THE AFC CLUB LICENSING SYSTEM

The AFC Club Licensing System has the following objectives:-

•

Safeguarding the credibility and integrity of continental and national clubcompetitions

• Allowing the development of benchmarking for clubs in financial, sporting, legal,personnel, administrative and infrastructure related criteria throughout Asia.

• Further promotion and continuous improvement of the standard of all aspectsof football in Asia and continuing priority given to the training and care of young players in each club;

• Increasing the level of management and organization within the clubs

•

Improvement of the economic and financial capability of the clubs, increasingtheir transparency and credibility, and placing the necessary importance on theprotection of creditors;

• Adaptation of clubs’ sporting infrastructure to provide spectators and media with well-appointed, well-equipped and safe stadiums;

• Safeguarding the continuity of international competitions for one season;

• Monitoring the financial fair play in the competitions.




2 PROCEDURE

2.1 CRITERIA GRADUATION

2.1.1 PRINCIPLE

2.1.1.1 The criteria described in this AFC Club Licensing Regulations aregraded into three separate categories.

2.1.1.2 The different grades have been defined as follows:

a) “A”- criteria – “MANDATORY”: If the licence applicant does notfulfil any A-criteria, then it cannot be granted with a licence toenter the AFC Club Competitions.

b) “B” – criteria – “MANDATORY”: If the licence applicant does

not fulfil any B-criteria, then it is sanctioned as specified by thelicensor but may still receive a licence to enter the AFC ClubCompetitions.

c) “C”- criteria – “BEST PRACTICE”: C-criteria are best practicerecommendations. Non-fulfilment of any C-criteria does not leadto any sanction or to the refusal of the licence. Certain C-criteriamay become “MANDATORY” criteria at a later stage.

2.1.1.3. The licensor is free to increase the minimum requirements or toupgrade the criteria established by AFC (see chapters 6 to 10) for the

purposes of entering in the AFC and/or the national clubcompetitions. The licensor may also introduce additional criteria notincluded in the AFC Club Licensing Regulations.

2.1.1.4. Where introduced by the licensor in its national licensing regulations,any increased minimum requirements, upgraded or additional criteria will apply “mutatis mutandis” to enter in the AFC club competitions. By way of illustration:-

• AFC minimum number of youth teams is 4.

• Licensor X establishes minimum number of youth teams per

licence applicant is 5.

o Consequently, for all member clubs of Licensor X playing inAFC club competitions, the minimum number of youth teams

per licence applicant is 5.

2.2 LICENSING IMPLEMENTATION

2.2.1 PRINCIPLE

The AFC Club Licensing Regulations must be transformed into national club

licensing regulations which set the minimum criteria for the licensee to enterAFC and/or the national club competitions.




2.2.2 IMPLEMENTATION AT NATIONAL ASSOCIATION LEVEL

2.2.2.1 The implementation of the club licensing system at national levelincludes the following steps and processes:-

a) existence of a legal basis within the statutes (cf. 2.2.3.);

b)

possibility for the national association to delegate club licensingresponsibilities to an affiliated league (cf. 2.2.4.);

c) establishment of rules regarding the sanction of the National Club Licensing System (cf. 2.2.5.);

d) integration of the AFC Club Licensing Regulations into a NationalClub Licensing Regulations (cf. 2.2.6.);

e) possibility for the national association to ask for exceptions(exception process, cf. 2.2.7);

f)

submission of the national licensing regulations to AFC foraccreditation (accreditation process, cf. 2.2.8.);

g) decision on the application of the licensing system to its licenceapplicants (cf. 2.2.9.).

2.2.3 EXISTENCE OF A LEGAL BASIS WITHIN THE STATUTES

2.2.3.1 For the implementation of the club licensing system within all AFCmember associations, each national association must have a legal basis within its statutes (cf. FIFA Standard Statutes: Article 76).

2.2.3.2

As an alternative the club licensing system can also be based on acontract between the club and the national association.

2.2.4 POSSIBILITY FOR THE NATIONAL ASSOCIATION TO DELEGATE THE CLUB

LICENSING SYSTEM TO AN AFFILIATED LEAGUE

2.2.4.1 Under certain conditions (cf. 2.2.4.6), the national association maydelegate the club licensing system to an affiliated league.

2.2.4.2 Vis-à-vis AFC, the national association as an AFC member remains

liable and responsible for the proper implementation of the clublicensing system, regardless of whether there is delegation or not.

2.2.4.3 Only the AFC Executive Committee may approve the from nationalassociations to delegate or to withdraw licensing responsibilitiesto/from the affiliated league.

2.2.4.4 Such well-founded requests can be made to the AFC administrationat any time. In the event of approval by the AFC ExecutiveCommittee, all the requests presented to AFC in writing before thestart of the core process will be considered for effect in the followingfootball season of AFC.

2.2.4.5 AFC would not accept any delegation request or its withdrawalduring the core process in order to ensure continuity.






b) Refer to the national disciplinary regulations for the violation ofthe licensing regulations as such (e.g. submission of falsifieddocuments, non respect of deadlines, sanctions againstindividuals, etc.).

2.2.6 INTEGRATION OF THE AFC CLUB LICENSING REGULATIONS INTO A

NATIONAL CLUB LICENSING REGULATIONS FOR THE 2013 SEASON

2.2.6.1 Each national association defines the parties involved (licensor,licence applicant, decision-making bodies), their rights and duties, thecriteria and the necessary processes in accordance with the “AFC Club Licensing Regulations” for entering in the AFC Club Competition inits “National Club Licensing Regulations”.

2.2.6.2 The transformation of the “AFC Club Licensing Regulations” into a“National Club Licensing Regulations” has to take place during 2010in view of the AFC Club Competitions in 2013 and includes thefollowing processes which require the approval of AFC:-

a) Exception process and policy (cf. 2.2.7 below)

b) Accreditation process (cf. 2.2.8 below)

2.2.6.3 For the 2013 AFC season the deadline for the submission of anyexception request to AFC is 30 April 2011.

2.2.6.4 For the 2013 AFC season the deadline for the submission of the new National Club Licensing Regulations to AFC for accreditation is 30

April 2011.2.2.6.5 The “AFC Club Licensing Regulations” is structured and worded in

such a manner that the national association can use its full text as amaster document. The national association may adapt the wording ofthe AFC Club Licensing Regulations according to:-

a) the national associations objectives and priorities;

b) the statutes and regulations of the national association;

c) national law;

d) flexibility given by AFC.

Such rewording by the national association is subject to compliance with the AFC “mandatory” in each category of criteria and thelicensing process itself. As a principle, for any given criterion, AFCfixes the quality and the national association fixes the quantityaccording to its needs. AFC gives the national associations someflexibility in the finalisation of the wording of each single criterion as well as in the description of the licensing process for the memberclubs. Where flexibility has been given to the discretion of thenational association, the text must be individually tailored by each

licensor according to its specific needs.




2.2.6.6 The national association is responsible for ensuring, and mustdemonstrate to the AFC Administration, that all applicable provisionsof these regulations have been integrated in its national clublicensing regulations. Exceptions may be granted by the AFCAdministration according to process and policies stated in 2.2.7

below.

2.2.7 EXCEPTION PROCESS AND POLICY

2.2.7.1 The following exception policy guidelines apply:-

a) Only clear and well-founded requests submitted in writing and within the given deadline to the AFC by the national association will be dealt with;

b) The exception will be granted to the national association by AFC;

c)

Exceptions granted to a national association apply to all clubs which play within the national association and which qualify for aAFC club competition (AFC Champions League, AFC Cup, AFC President’s Cup) for the season in question. Under specificcircumstances, AFC reserves the right not to apply exceptionsgranted to the national association to a specific individual club(e.g. club participating in the AFC club competitions on a regular basis);

d) The exception period granted is one season. Under specificcircumstances such period may be extended and the national

association may be placed on an improvement plan;

e) A renewal of the exception is possible upon new request;

f) The status and situation of football within the nationalassociation will be taken into account when granting anexception. The situation encompasses for example:

i. size of the country, population, geography, economic background;

ii. size of the national association (number of clubs, number ofregistered players and teams, size and quality of theadministration of the association, etc.);

iii. the level of football (professional, semi-professional oramateur clubs and at the level of the association);

iv. status of football as a sport within the association and itsmarket potential (average attendance, TV market, sponsorship,revenue potential, etc.);

v. stadium ownership situation (club, city/community, etc.) within the association;

vi.

support (financial and other) from the national, regional andlocal authorities, including the national sports ministry.




The AFC Administration acts as the first instance decision-making body on exception requests. It guarantees that decisions are made within a short deadline and ensures equal treatment within the AFCfamily.

2.2.7.2

A request must be well-founded and submitted in writing by thenational association at the latest by November 30 two yearspreceding the season to be licensed (this deadline applies for theparticipation in the AFC season 2014 and onwards – and therefore November 30, 2012 is the deadline for application of exception forthe AFC season 2014 while for the AFC season 2013, see example; cf.2.2.6.3.).

2.2.7.3 An exception request must be clear and concrete. It may relate to:-

a) non-applicability of a minimum requirement concerning thedecision making bodies or process defined in Chapter 3: Licensor,

due to national law or any other reason;

b) non-applicability of a minimum requirement concerning the coreprocess defined in Chapter 5 due to national law or any otherreason;

c) non-applicability of a certain criterion defined in Chapters 6-10due to national law or any other reason;

d) non-applicability of a minimum assessment procedure defined inChapters 6-10;

e) extension of the introduction period for the implementation of a

criterion or a category of criteria in Chapters 6-10.

2.2.7.4 The AFC Administration shall use the necessary discretion to grantany exception within the limits of these guidelines set. The proceduremust be done in writing.

2.2.7.5 The decision must:-

a) be in writing;

b) state the reasoning;

c) include a deadline/time limit;

d)

provide transparency for the involved parties subject to respect ofconfidentiality (e.g. financial aspects);

e) be communicated to the AFC member associations (and theaffiliated league in case of delegation) with the reasoning. Thismust then be referred to in the National Club Licensing Regulations and communicated to all licence applicants;

f) include a statement of the rights to appeal.

2.2.7.6 Appeals can be lodged against decisions made by the AFCAdministration, or, if applicable, the AFC Executive Committee in

writing before the Court of Arbitration of Sport (CAS) in accordance with the relevant provisions laid down in the AFC Statutes.




2.2.7.7 The Court of Arbitration for Sport (hereafter CAS) in Lausanne isappointed as independent appeals body for the club licensing system. Decisions of the CAS are final and binding. The relevant articles ofthe CAS and AFC Statutes, Rules and Regulations shall apply.

2.2.8 ACCREDITATION PROCESS

2.2.8.1 The national associations finalise the wording of the “National Club Licensing Regulations” and send it, in English, to AFC foraccreditation.

2.2.8.2 AFC approves the final version of the “National Club Licensing Regulations” through what is known as the “accreditation process”.This process guarantees that in each National Club Licensing Regulations, the AFC “mandatory” criteria and the “mandatory”process steps are implemented at national level accordingly.

2.2.8.3 The licensor must confirm, in writing, to AFC that all criteriacontained in the “National Club Licensing Regulations” sent to AFCfor accreditation are in compliance with the applicable national law.

2.2.8.4 The national club licensing regulations must be approved by thecompetent national bodies and communicated to the licenceapplicants before the start of the licensing process and they cannot be amended during the latter process, unless duly approved by AFC.

2.2.8.5 The AFC Administration reviews the final version of the national clublicensing regulations and confirms in writing to the national

association that:-

a) the applicable provisions of these regulations for the purpose ofentering the AFC Champions League are integrated in thenational club licensing regulations;

b) the license issued by the competent national bodies according tothe national club licensing regulations is based on the minimumcriteria set in these regulations;

2.2.8.6 AFC specifies the season from which the accredited regulations cancome into force. The national association must have its accredited

regulations approved by its competent body (e.g. ExecutiveCommittee) within a date that allows proper implementation of thenew rules for the season specified by AFC.

2.2.8.7 The national associations are free to amend their club licensingregulations at any time. However, for the amended regulations tocome into force, this must first be accredited by AFC. Any newaccreditation request must be submitted in writing by the nationalassociation at the latest by January 31 of the year preceding theseason to be licensed (this deadline applies for the participation inthe AFC 2014 season onwards – therefore January 31, 2013 in this

example; cf. 2.2.6.4.).




2.2.8.8 The decision on the accreditation is communicated in writing to thenational association and is final and binding.

2.2.9 DECISION ON THE APPLICATION OF THE SYSTEM TO ITS LICENCE

APPLICANTS

2.2.9.1 The national association must implement the system for participationin AFC club competitions whenever expressly referred to by specificregulations governing a club competition to be played under theauspices of AFC.

2.2.9.2 The national association may also decide to implement the system forparticipation in the top division and/or lower division nationalcompetitions. For this purpose, the national association is free toincrease, decrease, or introduce additional minimum criteria in itsclub licensing regulations for the purpose of entering the lowerdivision domestic club competitions.

2.2.9.3 The quality standards will thereby be improved on a broader basis forthe national championship as well as for AFC club competitions andthe clubs of the same division are treated equally. AFC recommendsthat such decision is attentively evaluated. In particular it is veryimportant that the national associations carefully consider the criteriato be implemented for entering the national competitions, the impactof such decision on the national competition regulations and theconsequences of a licence refusal on national level.

2.3 SPOT-CHECKS BY AFC

2.3.1 PRINCIPLE

2.3.1.1 AFC and/or its nominated bodies/agencies reserve, at any time, theright to conduct spot-checks with the licensors and, in the presenceof the latter, with the applicant club in order to ensure that itslicence was correctly awarded at the time of the final and bindingdecision of the licensor. The non-observance of the minimummandatory requirements as defined in the National Club Licensing

Regulations accredited by AFC may result in sanctions defined by theappropriate AFC body according to the nature and the gravity of the violations.

2.3.1.2 AFC and/or its nominated bodies/agencies reserve the right, at anytime, to conduct spot-checks with the licensors to verify that theminimum requirements defined in the core process (cf. Chapter 5) arerespected. The non-observance of the minimum mandatoryrequirements may result in sanctions defined by the appropriate AFC body according to the nature and the gravity of the violations.




2.3.1.3 For the purpose of the spot-checks by AFC, in the event of anydiscrepancy in interpretation between the English and the Nationalofficial language in the wording of the National Club Licensing Regulations, the English version is the authoritative text.

2.4 DEVELOPMENT PROCESS

2.4.1 PRINCIPLE

2.4.1.1 The project organisation used by the AFC administration for thedevelopment of the club licensing system will also be used for furtherdevelopments of the system.

2.4.1.2 Any changes, clarifications, etc. in relation to the AFC Club Licensingsystem will be communicated to the national associations by AFCcircular letter.

2.5 BODIES OF AFC

2.5.1 PRINCIPLE

2.5.1.1 The bodies through which AFC will act with regard to the clublicensing system shall be:

a) the Executive Committee for the approval of this regulations, theexception policy and the delegation requests and any othermatter which is not regulated by this regulations;

b) the AFC Administration for the approval of the exception requests,the execution of the spot checks, the accreditation of the National Club Licensing Regulations, the extraordinary applicationprocedure to enter AFC club competitions as regulated by theseregulations and all tasks regarding club licensing;

c) specific working groups (e.g. legal working group, financial working group, etc.) composed by specialists delegated by thelicensors, may be set up, to assist the AFC Administration in thedevelopment of the club licensing system;

d)

the AFC Judicial Bodies for the penalisation of breaches of dutiesrelating to the “AFC Club Licensing Regulations” and certaindecisions on the spot check result (cf. 2.3). The AFC DisciplinaryCode and the corresponding AFC competition regulations apply.




3 LICENSOR

3.1 INTRODUCTION

This chapter defines the licensor and the decision-making bodies.

3.2 LICENSOR DEFINITION

3.2.1 WHO IS THE LICENSOR?

3.2.1.1 The national association is the licensor. Under certain conditions, thenational association may delegate club licensing system to anaffiliated league (cf.2.2.3.)

3.2.1.2 The licensor governs the licensing system, appoints the correspondinglicensing bodies and fixes the necessary processes.

3.2.1.3 The licensor shall ensure that all applicable provisions defined inthese regulations are integrated into national club licensingregulations that must be submitted, in English, to the AFCAdministration for review according to procedures defined in Chapter2.

3.2.1.4 The licensor guarantees the licensee full confidentiality with regard toall information given by the licence applicant during the licensingprocess. Anyone involved in the licensing process or appointed by thelicensor must sign a confidentiality clause before starting its tasks.

3.2.1.5

In particular, the licensor must:-

a) establish at least two decision-making bodies (cf. 3.22);

b) establish an appropriate licensing administration (cf. 3.23);

c) set up a catalogue of sanctions (cf. 2.25);

d) define the core process (cf. Chapter 5);

e) determine whether a licence can be granted.

3.2.2 DECISION-MAKING BODIES3.2.2.1 The licensor shall establish two decision-making bodies, the names of

which it shall be determined:-

a) First Instance Body (FIB)

b) Appeals Body (AB)

3.2.2.2 The decision-making bodies shall be independent from each other.They shall receive administrative support from the administration ofthe licensor (cf. 3.2.3).




3.2.3 LICENSING ADMINISTRATION

3.2.3.1 The licensor shall establish an appropriate administration and appointits qualified staff members.

3.2.3.2 The tasks of the Licensing administration (LA) will include:-

a) preparing, implementing and further developing the clublicensing system;

b) providing administrative support to the decision-making bodiesreferred to in 3.2.2.3 above;

c) assisting, advising and monitoring the licensees during theseason;

d) serving as the contact point for and sharing expertise with thelicensing departments of other AFC member associations and with

AFC itself.3.2.3.3 The LA must be equipped with suitably qualified staff and the

necessary infrastructure. These costs are borne by the licensor.

3.2.3.4 At least one staff member or an external financial adviser must havea financial background and a diploma in accountancy/auditingrecognised by the appropriate national body (e.g. national tradeassociation), or must have several years experience in the abovematters (a “recognition of competence”).

3.2.3.5 All persons involved in the licensing process must comply with strictconfidentiality rules regarding information received during thelicensing procedure. The national association shall set up thenecessary confidentiality clauses in this respect.

3.2.4 FIRST INSTANCE BODY (FIB)

3.2.4.1 The FIB decides on whether a licence should be granted to anapplicant on the basis of the documents provided and in accordance with the provisions of the National Club Licensing Regulations at thesubmission deadline set by the licensor and on whether a licence shall be withdrawn.

3.2.4.2 In the case of a licence refusal, the decision must be put in writingand include the reasoning.

3.2.4.3 The licensor decides on the quorum of the FIB. The quorum must beof minimum three members. The chairman has the casting vote.

3.2.5 APPEALS BODY (AB)

3.2.5.1 The AB decides on appeals submitted in writing and makes a finaland binding decision on whether a licence should be granted.

3.2.5.2

Appeals may only be lodged by:-




a) The licence applicant, who received the refusal of the FIB;

b) The licensee, whose licence has been withdrawn by the FIB; or

c) The licensor, the competent body of which must be defined (e.g. Licensing Manager).

3.2.5.3

The AB makes its decision based on the decision of the FIB and allthe evidence provided by the licence applicant or licensor with its written request for appeal within the deadline determined in theappeal procedure (cf. 3.2.7) by the chairman of the AB.

3.2.5.4 Any further evidence submitted to the AB at a later stage shall not betaken into account.

3.2.5.5 In the case of a licence refusal, the decision must be put in writingand include the reasoning.

3.2.5.6 If a national association has a court of arbitration specified in its

statutes, it shall decide on whether the club licensing system comesunder its authority. In this respect, particular attention will be paid tothe relevant deadlines for entering the AFC club competitions.

3.2.5.7 The Executive Committee of the national association, unlessotherwise provided by the Statutes, decides on the composition ofthe AB.

3.2.5.8 The licensor decides on the quorum for the decisions of the AB. Thequorum must be of minimum three members. The chairman has thecasting vote.

3.2.6 REQUIREMENTS OF MEMBERS OF THE DECISION MAKING BODIES

3.2.6.1 The Executive Committee of the national association decides if themembers of the FIB and AB are elected or appointed. Members may be re-elected or re-appointed for specific terms to be specified.

3.2.6.2 The decision making bodies must have at least one qualified lawyerand an auditor holding a qualification recognised by the appropriatenational professional body among their members.

3.2.6.3 Members of the FIB may not belong simultaneously to a statutory judicial body of the licensor and must act impartially in the dischargeof their duties.

3.2.6.4 The licensor may nominate administrative staff of the nationalassociation and its affiliated league as members of the FIB, with theexception of the Licensing Manager who cannot be member of the FIB.

3.2.6.5 Administrative staff of the national association and its affiliatedleague cannot be members of the AB.

3.2.6.6 Members of the AB must not simultaneously be members of any

other statutory body or Committee of the licensor (i.e. other than the bodies mentioned in 3.2.6.2. below).




3.2.6.7 Members of the decision making bodies must follow the strictconfidentiality rules in the same way as members of the LA (cf.3.2.3.4). The national association defines these rules and themembers have to accept them in writing.

3.2.6.8

In addition to the requirements set out in 3.2.6.1 above, the licensormay establish further conditions to be satisfied by members of thelicensing bodies (academic, professional training, experience, etc.) toensure that they perform their functions to high professionalstandards.

3.2.6.9 A member must in all cases automatically abstain if there is anydoubt as to his/her independence towards the licence applicant or ifthere is a conflict of interest.

3.2.6.10 In this connection, the independence of a member may not beguaranteed if he/she or any member of his/her family (spouse,

children, parents, siblings) is a:

a) member

b) shareholder

c) business partner

d) sponsor or

e) consultant, etc.

of the licence applicant. The foregoing list is illustrative and notexhaustive.

3.2.6.11

The licensor may establish further criteria regarding the independenceof members in accordance with AFC.

3.2.7 PROCEDURE OF DECISION MAKING

3.2.7.1 In the National Club Licensing Regulations or in a specific regulation,the licensor shall define procedural rules with respect to decisionmaking (cf. 5.1.1.3.). These shall, as a minimum, regulate thefollowing standards:-

a)

Deadlines (e.g. submission deadline, etc.) b) Safeguarding the principle of equal treatment

c) Representation (e.g. legal representation, etc.)

d) The right to be heard (e.g. convocation, hearing)

e) Official language (if applicable)

f) Time limit to issue a request (e.g. calculation, compliance,interruption, extension)

g) Time limit to appeal

h)

Effects of appeal (e.g. no delaying effect)

i) Type of evidence requested




j) Burden of proof (e.g. licence applicant has burden of proof)

k) Decision (e.g. in writing with reasoning, etc.)

l) Ground for complaints

m) Content and form of pleading

n) Deliberation / hearings

o) Cost of procedure / administrative fee / deposit




4 LICENCE APPLICANT AND LICENCE

4.1 INTRODUCTION

This chapter defines the legal entity that must apply for the licence and the licence toenter AFC club competitions.

The legal entity applying for a licence is called the licence applicant. Once the licenceapplicant has been granted with a licence by the licensor it becomes a licensee. For thepurpose of this chapter, only the term licence applicant is used.

4.2 CIRCLE OF LICENCE APPLICANTS

4.2.1 AUTHORITY TO DEFINE LICENCE APPLICANTS

4.2.1.1

The licensor defines the licence applicants according to the statutesand regulations of the national association, the following provisionsand in accordance with the national law. This may be regulated within the licensing regulations and/or in the statutes of the nationalassociation and/or in the respective specific national regulations. Furthermore, the FIFA and AFC statutes as well as relevantregulations must also be taken into account (e.g. FIFA Regulationsfor the Status and Transfer of Players).

4.2.2 STATUS OF FOOTBALL CLUBS

4.2.2.1 The status of a football club (professional, semi-professional oramateur) is not relevant to the issuance of a licence.

4.2.3 LEGAL FORM OF FOOTBALL CLUBS

4.2.3.1 The legal form of a football club is not relevant to the issuance ofthe licence according to national statutes and law.

4.3 DEFINITION OF LICENCE APPLICANTS

4.3.1 PRINCIPLE

4.3.1.1 The licence applicant is defined as being the legal entity fullyresponsible for the football team participating in national andinternational club competitions and which is either:-

a) any legal entity according to national law and/or nationalassociation statutes, which is member of the national associationand/or its affiliated league, or




b) any commercial entity according to national law and/or nationalassociation statutes, which has a contractual relationship to aregistered member (hereafter, company ).

4.3.1.2 Only a registered member or a company can apply for / receive alicence. Natural persons may not apply for / receive a licence.

4.3.1.3 The licence applicant is fully responsible for the participation innational and international football competitions as well as for thefulfilment of the club licensing criteria.

4.3.1.4 The licence applicant is, in particular, responsible for ensuring thefollowing:-

a) that all players are registered with the national association and/orits affiliated league and, if professional players, that they have a written labour contract with either the registered member or thecompany (see Article 2 and 5 of the FIFA Regulations for the

Status and Transfer of Players);

b) that all the compensation paid to the players arising fromcontractual or legal obligations and all the revenues arising fromgate receipts are accounted for in the books of either theregistered member or the company;

c) that the licence applicant is fully responsible for the football teamcomposed of registered players participating in national andinternational competitions;

d) that the licensor is provided with all necessary information and/or

documents relevant to proving that the licensing obligations arefulfilled, as these obligations relate to the sporting, infrastructure,personnel and administrative, legal and financial criteria set outunder Chapters 6, 7, 8, 9 and 10 respectively;

e) that the licensor is provided with information on the reportingentity/entities in respect of which sporting, infrastructure,personnel and administrative, legal and financial information arerequired to be provided (cf. 4.3.1.5, 4.3.1.6 and 4.3.1.7 below). Inturn, the licensor must assess whether, in respect of each licenceapplicant, the selected reporting entity/entities is appropriate for

club licensing purposes.4.3.1.5 If the licence applicant is a company, it must provide a written

contract of assignment with a registered member that must beapproved by the national association and/or its affiliated league andmust include the following minimum content:-

a) The company shall comply with the applicable statutes,regulations and decisions of FIFA, AFC, the national associationand the league as amended from time to time. This system ofrules shall constitute an integral part of the contract ofassignment. This company shall also comply with decisions made

by the said football bodies.




b) The company must not further assign the rights to participate tothe competition on national or international level.

c) The right of this company to participate in the competitionoperations shall cease to apply if the assigning club’s membership

of the association ceases.d) If the company is put into bankruptcy or enters into liquidation

the right to apply for a licence in the international and/ornational competition shall revert to the registered member. Forthe sake of clarity should the licence already be granted to thecompany, then it cannot be transferred from the company to theregistered member (cf. 4.4.1.8.); only the right to apply for alicence in the following season shall revert to the registeredmember.

e) The national association shall be reserved the right to approve the

name under which the company participates in the nationalcompetitions.

f) The company shall, on request of the competent national orinternational arbitration tribunal, provide views and information,as well as documents on matters regarding the company’sparticipation in the national and/or international competition.

g) Confirmation (e.g. share register) of the fact that the registeredmember has the majority of the voting rights of the company.The company may not be owned directly or indirectly by anyone who also has a decisive influence over another registered memberor company entitled to participate at the same level in theassociation leagues system.

h) The contract of assignment and any amendment to it shall beapproved by the appropriate body of the national association to become valid.

4.3.1.6 If the licence applicant is a company it must provide the licensor withthe financial information of the company and the registered member(e.g. consolidated financial statements as if they were a singlecompany).

4.3.1.7

If the licence applicant has control on any subsidiary , thenconsolidated financial statements shall be prepared and submitted tothe licensor as if the entities included in the consolidation (“thegroup ”) were a single company.




4.3.1.8 If the licence applicant is controlled by a parent, which may becontrolled by another parent or which may have control over anyother subsidiary or may exercise significant influence over any otherassociate , any transaction with the parent of the licence applicant orany parent or subsidiary or associate of such parent must be disclosed

in the notes to the financial statements to draw attention to thepossibility that its financial position and profit or loss may have beenaffected by the existence of related parties and by transactions andoutstanding balances with such parties.

4.3.1.9 In addition to the above-mentioned mandatory provisions, AFCrecommends the following guidelines for national associations todefine the licence applicant. In accordance with these guidelines, thelicence applicant should:-

a) be based legally in the territory of the national association and

play its home matches only in that territory. The nationalassociation may define exceptions, subject to the approval of FIFAand AFC;

b) have the right to use the name and the brands of the club andnot change the name of the club for advertising/promotionalpurposes;

c) accept no clauses in contracts with television, sponsors or othercommercial partners which could restrict the club in its freedomof decision or affect its management.

4.4 LICENCE

4.4.1 PRINCIPLE

4.4.1.1 Licences must be issued according to the provisions of the accredited National Club Licensing Regulations.

4.4.1.2 The licensor must issue an invitation to the football clubs concernedto apply for a licence punctually and in writing. The club applying fora licence (i.e. licence applicant) must submit a written application tothe licensor. In this application, the club must, in particular, declare

that it will fulfil the obligations of the licensing system.

4.4.1.3 Only clubs which fulfil the criteria set out in the accredited NationalClub Licensing Regulations at the deadlines defined by AFC and which have qualified on the basis of their sporting results, may begranted with a licence by the national association to enter the AFCclub competitions of the coming season.

4.4.1.4 A licence expires without prior notice:-

a) at the end of the season for which it was issued for; or

b) on the dissolution of the division in question.

4.4.1.5 A licence may be withdrawn during a season by the national decisionmaking bodies if:-




a) for any reason a licensee becomes insolvent and enters intoliquidation during the season, as determined by the applicablenational law (where a licensee becomes insolvent but entersadministration during the season, for so long as the purpose ofthe administration is to rescue the club and its business, the

licence should not be withdrawn);

b) any of the conditions for the issuing of a licence are no longersatisfied; or

c) the licensee violates any of its obligations under the NationalClub Licensing Regulations.

4.4.1.6 As soon as a licence withdrawal is envisaged the national associationmust inform AFC.

4.4.1.7 If a club has its licence withdrawn, a decision concerning theelimination of the club from the current AFC competition in questionmust be made by the AFC Judicial Bodies.

4.4.1.8 A licence cannot be transferred.

4.4.1.9 AFC reserves the right to sanction a club or eliminate a club from thefuture AFC club competitions based on the applicable AFC clubcompetition regulations and AFC Disciplinary Code.

4.5 ADMISSION TO AFC CLUB COMPETITIONS

4.5.1 PRINCIPLE4.5.1.1 The licence applicant must further fulfill all the requirements

according to the relevant AFC club competition regulations to beadmitted to the AFC club competition.

4.5.1.2 The admission process falls under the sole jurisdiction of AFC and itscompetent bodies (Competitions Committee, etc.).

4.5.1.3 The competent bodies of AFC make the final decision regarding theadmission of a club to participate in any AFC club competition.

4.5.1.4 Such decisions are subject to all the statutes-based jurisdiction of

AFC including the Court of Arbitration for Sport in Lausanne asordinary court of arbitration (Art 61 ff AFC Statutes).




4.6 EXTRAORDINARY APPLICATION OF THE CLUB LICENSING SYSTEM FOR

ENTERING AFC CLUB COMPETITIONS

4.6.1 PRINCIPLE

4.6.1.1 If a club qualifies for an AFC competition based on its sportingresults, but has not undergone at all a national licensing process orhas undergone a licensing process which is lower/not equivalent tothe one applicable for top division clubs because it belongs to adivision other than the top division, the national association of theclub concerned may - on behalf of such a club - request theextraordinary application of the club licensing system.

4.6.1.2 In practice, such a club could for example be the winner or therunner-up of the main domestic cup or league cup playing in adivision other than the top division.

4.6.1.3

Based on such an extraordinary application, AFC may grant specialpermission to enter the corresponding AFC club competition, whichonly applies to that specific applicant and for the season in question.

4.6.2 PROCEDURE

4.6.2.1 The AFC General Secretary defines the minimum criteria for theextraordinary procedure and communicates these criteria to thenational associations by February 28 of the year preceding the seasonto be licensed at the latest.

4.6.2.2 The concerned national association must notify AFC of the possibility

of such extraordinary application in writing, by September 30 at thelatest, stating the name(s) of the club(s) concerned.

4.6.2.3 The AFC Administration may then decide the minimum criteria forthe club(s) concerned by taking into account the requirements of theapplicable national club licensing regulations, as well as the status ofthe club(s) in question. The AFC Administration defines as well thenecessary deadlines and forward these to the concerned nationalassociation.

4.6.2.4 The national association in question is responsible for submitting the

criteria, as soon as these are communicated by the AFCAdministration, to the club(s) concerned for the assessment for theextraordinary procedure at national level. It also has to takeimmediate actions with the club(s) for the preparation of thatprocedure.

4.6.2.5 The club(s) concerned must provide the necessary documentary proofto the national association. The licensor will assess the club(s) againstthe fixed minimum standards and forward the followingdocumentation in English to AFC within the given deadline:-

a) a written request to apply for special permission to enter the

corresponding AFC club competition;




b) a recommendation by the licensor based on its executedassessment (incl. the dates and names of the persons havingassessed the club(s));

c) all documentary evidence provided by the club(s) and the licensor;

d)

any further document requested by AFC during the extraordinaryprocedure.

4.6.2.6 The AFC Administration bases his decision on the receiveddocumentation and grants special permission to enter AFC clubcompetitions if all the set criteria are fulfilled and if the club(s)ultimately qualifies on the basis of its sporting results. The decision will be communicated to the national association, which has toforward it to its concerned club(s).

4.6.2.7 If a concerned club is sportingly eliminated during this extraordinaryprocedure, the national association has to notify the AFCadministration immediately, and has to decide if this procedure shallimmediately be terminated, without further decision. Such aterminated procedure cannot be restarted at a later stage.

4.6.2.8 With regard to an appeal of such a decision, reference is to be madeto points 22.2.7.7 and 2.2.7.8 ff.

4.6.2.9 AFC reserves the right to execute spot-checks (cf. 2.3.)




5 CORE PROCESS

5.1 INTRODUCTION

This chapter defines the assessment process (hereafter core process) of the clublicensing system.

5.1.1 PRINCIPLE

5.1.1.1 In its national club licensing regulations, the licensor defines the coreprocess for the verification of the criteria described in this regulations(sporting criteria, infrastructure criteria, personnel and administrativecriteria, legal criteria and financial criteria) and thus to control theissuance of a licence to a licence applicant.

5.1.1.2

The core process shall start at the deadline defined by the licensorand shall end with the submission of the list of licensing decisions tothe AFC Administration within the deadline communicated by AFC.

5.1.1.3 The core process is aimed at:-

a) helping the licensor in establishing an appropriate and efficientlicensing process according to its needs and organisation;

b) agreeing on the main requirements that the licensor has tocomply with to issue the licence, necessary for entering AFC clubcompetitions;

c)

ensuring that the decision on the granting of a club licence ismade by an independent body (FIB and/or AB cf. 3.2.);

d) ensuring that the decision-making bodies receive adequatesupport from the licensing administration of the licensor.

5.1.1.4 The core process must, as a minimum, include the followinginformation (an example is provided in Appendix II) and be supported by a timetable (AFC recommends that the deadlines are fixed at the beginning of the season and be communicated to the licenceapplicants via circular letter):-

a)

Submission of the licensing documentation to the licenceapplicants;

b) Deadlines for submission and submission of the licensingdocumentation to the licensor in order to prove compliance withthe licensing criteria;

c) The procedure with regard to the assessment of thedocumentation by the licensing administration (e.g. personsinvolved, inspections, site visits, etc.; cf. 3.2.2 and 3.2.3);

d) Submission of the written representation letter to the licensor (cf.

10.10.1);




e) Assessment by the decision-making bodies in accordance to theprocedure with regard to the decision making (cf. 3.2.7.);

f) Submission of the list of licensing decisions to the AFCAdministration.

5.1.1.5

The licensor must submit to AFC the list of licensed clubs within thedeadline communicated by AFC. Communication of this deadline tothe national associations is done by November 31 of the yearpreceding the season to be licensed at the latest.

5.1.1.6 The licensor shall ensure equal treatment between all licenceapplicants during the core process.




6 SPORTING CRITERIA

6.1 INTRODUCTION

For the future of football it is absolutely necessary to have a broad basis of footballersavailable who have the necessary skills and motivation to become professional players.Therefore, it is important to foster youth development programmes and to attract intofootball more and better-educated boys and girls who not only play the game but arealso supporters.

6.2 OBJECTIVES

The objectives of the sporting criteria are that licence applicants:-

•

invest in quality-driven youth development programmes;

• support football education and encourage non-football education of their youthplayers;

• foster medical care of their youth players;

• apply fair play on and off the pitch (including a common understanding ofrefereeing matters among all those involved in a match such as referees, players,coaches and officials).

6.3 BENEFITS FOR CLUBS

The first and main advantage of the sporting criteria is to “produce” football talents forthe club’s first squad every year. They also normally fit more easily and quickly into thefirst team squad since they have partly trained with them, know their tactics and speakthe same language. They lack only experience.

In light of the FIFA transfer system, clubs which have trained players under 23 and whoare then transferred internationally receive financial compensation. Clubs will thusreceive a return on their investment if they train young players. Programmes for

improving relations and respect between coaches, officials, players and referees supportthe idea of fair play on and off the pitch. The image of the players and clubs willimprove and on the other hand fines for disciplinary sanctions could be reduced.




6.4 CRITERIA

6.4.1 “A” CRITERIA

No. Grade Description

S.01 A APPROVED YOUTH DEVELOPMENT PROGRAMME

The licence applicant must have a written youth developmentprogramme approved by the licensor. This education programmemust include at least the following:-

a) Objectives and youth development philosophy;

b) Organisation of youth sector (organisational chart; bodiesinvolved, relation to licence applicant, youth teams etc.);

c) Personnel (technical, medical and administrative etc.) and

required minimum qualifications;d) Infrastructure available for youth sector (training and match

facilities, others);

e) Financial resources (available budget, contribution bylicence applicant, players or local community etc.);

f) Football education programme for the different age groups(playing skills, technical, tactical and physical);

g) Education programme on the “Laws of the game”;

h) Medical support for youth players (incl. medical checks);

i) Review and feedback process to evaluate the results and theachievements of the set objectives;

j) Validity of the programme (at least 3 years but maximum 7 years).

The youth development programme must further show thecommitment and support of the licence applicant for mandatoryand complementary school education of youth players throughthe introduction of the following mandatory provisions:-

a)

the licence applicant ensures that every youth playerinvolved in its youth development programme has thepossibility to follow the mandatory school educationaccording to national law;

b) the licence applicant ensures that every youth playerinvolved in this youth development programme is notprevented from continuing his non-football education(complimentary school education or profession).





S.02 A YOUTH TEAMS

The licence applicant must at least have the following youthteams within its legal entity or affiliated to its legal entity:-

a)

at least two youth teams within the age range of 15 to 21;

b) at least one youth team within the age range of 10 to 14;

c) at least one team below the age of 10.

The youth teams in the above age ranges litera a) and litera b)must take part in official competitions or programmes recognised by the national association and played on national, regional orlocal level. Each youth player of those teams must be registeredeither on national and/or on regional level.

There is no obligation for the youth teams in children football(litera c above) to take part in official competitions. For theseteams suitable events should be organised (mini-tournaments, youth gatherings on local level etc.) in order to provide fun andgive them the opportunity to gain experience playing with otherchildren teams. No mandatory registration of these players isrequired.


S.03 A MEDICAL CARE OF PLAYERS

The licence applicant must ensure that all its players eligible toplay for its first squad undergo a yearly medical examination,including a cardiovascular screening.


S.04 A WRITTEN CONTRACT WITH PROFESSIONAL PLAYERS

All licence applicants’ professional players must have a writtencontract with the licence applicant in accordance with therelevant provisions of the FIFA Regulations for the Status andTransfer of Players and shall incorporate all key provisionsrequired by the national law and FIFA, AFC and NationalAssociation’s instructions.




6.4.2 “B” CRITERIA


S.05 B REFEREEING MATTERS AND LAWS OF THE GAME

The licence applicant must prove that at least the captain or hisreplacement, the head coach or the assistant coach of the firstsquad have attended a session or an event for refereeing mattersprovided by the national association or with its collaborationduring the year prior to the season to be licensed. The criterion isfulfilled if those persons have attended the session or event.

6.4.3 “C” CRITERIA


S.06 C RACIAL EQUALITY PRACTICE

It is recommended that the licence applicant establishes a policyto tackle racism in football.




7 INFRASTRUCTURE CRITERIA

7.1 INTRODUCTION

Several regulations, guidelines and directives refer to criteria with regard to the stadiumand to the related safety and security (Laws of the Game, AFC competition regulations,AFC Stadia Regulations, FIFA book for Football Stadiums – Technical Recommendationsand Requirements.

Based on these experiences, AFC decided to streamline the infrastructure approach forAFC competitions by creating a specific “AFC Stadia Regulation ”, which includes allminimum standards as “must-requirements” in one single document. Specific to theAFC Club Competitions, reference is made to the “AFC Stadia Regulation for AFCChampions League / AFC Cup”.

Because the infrastructure criteria should be seen as long-term investments, severalrecommendations have been introduced which must be taken into consideration if astadium is to be built or renovated in the short term (one to three years). Theserecommendations will probably be essential requirements for stadiums one day.

Therefore, it would be appreciated if the recommendations were either alreadyincorporated into the stadium planning or stadium adaptations began right away inorder to improve quality standards on a voluntary basis.

The national law also needs to be taken into consideration when establishing the

stadium and security requirements.

7.2 OBJECTIVES

The objectives of the following infrastructure criteria are that:-

• licence applicants have an “approved” stadium available for playing AFC clubcompetitions matches which provide spectators and media and pressrepresentatives with well equipped, well appointed and safe and comfortablestadia;

•

licence applicants have suitable training facilities for their players to help themimprove their technical skills.


It is appreciated that nowadays people only follow events that are attractive,entertaining and are worth spending a certain amount of money on. A match betweentwo football teams is no longer enough to bring people into a football stadium to watch a match live.




Therefore, each club, together with the stadium owner and the local community, shouldtry to provide a stadium that is attractive to visit, safe and secure, easily accessible bycar (including parking facilities) and/or public transport, has comfortable seats with aclose view of the pitch, clean hospitality facilities and shops, is equipped with hygienicand spacious toilets for both sexes, provides communication installations (loudspeakers

and a video screen) and, has also seats and toilets for disabled spectators.

Higher quality standards and better facilities create more business opportunities andtherefore more income for the owner and/or the club, which helps to financeinvestments in stadium facilities. Finally, the comfort of a stadium is an importantelement in terms of having a large crowd to support the teams on the pitch.

7.4 CRITERIA



I.01 A APPROVED STADIUMS FOR AFC CLUB COMPETITINS

The licence applicant must have a stadium available to play AFCclub competitions. The licence applicant either:-

a) owns the stadium, or

b) can provide a written contract with the owner(s) of thestadium or with owners of different stadia it will use. This

contract must guarantee the use of the stadium for the AFChome matches for the coming season, for which the licenceapplicant qualifies in sporting terms.

The stadia must also meet the requirement expressly referred to by specific regulations governing the use of a stadia in a clubcompetition to be played under the auspices of AFC.

The stadium must be approved by the national association. Furthermore it must be based within the territory of the nationalassociation.


I.02 A STADIUM – CERTIFICATION (cf. Art. 1, AFC Stadia Regulations

for ACL/AFC Cup)

The stadium must be certified.

The certification is defined according to national/local law and

must include provisions related to safety and an evacuation plan.If such law does not exist, the licensor shall establish the contentof the stadium certificate and the procedure in close cooperation




with the appropriate body/bodies (e.g. local security authorities,the local hospital, fire brigade, police, etc.).The certificate must provide at least the following information:-

a) Safety status of the stadium structure and measures for

improvement. b) Compliance statement regarding the safety/security

regulations of the competent civil authority (reference I.06).

c) Approval of the entire stadium capacity (individual seats,terraces and total number).

d) Safety and security strategy. This must cover all aspects ofthe organisation of a football match, such as ticketingdistribution system, screening of spectators, segregationstrategy, crowd dispersal strategy, medical service, measurestaken in case of fire, loss of power supply, or any otheremergency.

The certificate issued by the appropriate body must not be olderthan two years at the beginning of the new AFC clubcompetition season (1st qualification match).

I.03 A STADIUM – CONTROL ROOM (cf. Art. 38 of the AFC Stadia

Regulations for ACL/AFC Cup)

Each stadium must have a control room which ensures an overall view of the inside of the stadium in accordance with theprovisions of the applicable law or according to the requirementsof the licensor, in consultation with the appropriate civil body(e.g. local police).

The provisions shall specify at least:-

a) the definition of the size of the control room,

b) its configuration

c) its furnishings

d)

and the technical equipment (e.g. central telephoneSwitchboard) of the control room.

I.04 A STADIUM – SPECTATOR AREAS (cf. Art. 29 of the AFC Stadia

Regulations for ACL/AFC Cup)

Each stand within the stadium must be capable of beingdivided into separate sectors according to the requirementsof the local security authorities or, if no such requirementsexist, those of the licensor.

I.05 A STADIUM – FIRST AID ROOMS (cf. Art. 36 of the AFC Stadia Regulations for ACL/AFC Cup)




Each stadium must be equipped with first-aid room(s) to care forspectators in need of medical assistance. This must be doneaccording to the local authority regulations, or the licensor fixesthe exact number, size and location of the first-aid room(s) inconsultation with the appropriate civil body (e.g. local authorities

for security and health,).

In general terms, the licensor may take account of the followingrecommendations:-

a) The first-aid rooms must be located in a position whichallows easy access from both inside and outside the stadiumto spectators and emergency vehicles.

b) Have doors and passageways leading to them which are wide enough to allow access for a stretcher or a wheelchair.

c)

Have bright lighting, good ventilation, heating, airconditioning, electric sockets, hot and cold water, drinking water and toilet facilities for men and women.

d) Have walls and floors (non-slip) constructed of smooth andeasy to clean material.

e) Have a glass cabinet for medicine.

f) Have storage space for stretchers, blankets, pillows andfirst-aid materials.

g) Have a telephone allowing internal and external

communication.

h) Be clearly signposted throughout the inside and outside ofthe stadium.

I.06 A STADIUM – SAFETY

In accordance with the national law, the following provisionsmay build an integrated part of the stadium certificate. If nosuch law exists, the licensor defines at least the followingprovisions:-

a)

All parts of the stadium and its stands, including entrances,exits, stairways, doors, passages, roofs, all public and privateareas and rooms, etc. must comply with the safety standards(reference I.04).

b) All public passageways and stairways in the spectator areasmust be painted in a bright colour (e.g. yellow), as must allgates leading from the spectator areas into the playing area,and all exit doors and gates leading out of the stadium.

c) Clubs must establish procedures so that all publicpassageways, corridors, stairs, doors, gates, etc. are kept freeof any obstructions that could impede the free flow of




spectators during an event.

d) All exit doors and gates in the stadium, and all gatesleading from the spectator areas into the playing area, mustopen outwards away from the spectators, and must remain

unlocked while spectators are in the stadium. Each andevery such

e) door and gate must be attended at all times by a speciallyappointed steward, to guard against abuse and ensureimmediate escape routes in the event of any emergencyevacuation. In order to prevent illegal entry or intrusion,these doors and gates may be fitted with a locking device, which may be operated simply

f) and quickly by anyone from within. Under no circumstancesmust they be locked with a key during the time that

spectators are in the stadium.

g) In order to protect those on the field or in other parts of thestadium from lightning strikes, the stadium should beequipped with the appropriate safety devices.

h) It is essential that event holders and stadium safety/securityauthorities are capable of communicating with spectatorsinside and outside the stadium by means of a sufficientlypowerful and reliable public address system (loudspeakers)and/or by a scoreboard and/or a video screen.

I.07 A STADIUM – APPROVED EVACUATION PLAN

The appropriate body (e.g. safety and security authority,competent civil authority or other qualified and approved firms,etc.) approves the evacuation plan which ensures that the wholestadium can be emptied in a case of emergency accordingto the applicable national law.

If such law does not exist, the licensor establishes the content ofthe evacuation plan, including an evacuation time and theapproval body, in close co-operation with the appropriate civil body (e.g. local security authorities, the local hospital, fire brigade, police, etc.).

I.08 A TRAINING FACILITIES – AVAILABILITY

The licence applicant must have training facilities availablethroughout the year. The licence applicant either:-

a) owns the training facilities; or

b) can provide a written contract with the owner(s) of thetraining facilities This contract must guarantee the use of

the training facilities for the coming season, for which thelicence applicant qualifies in sporting terms, for all teams




which participate in a championship approved by thenational/regional association (cf. I.03).



I.09 B TRAINING FACILITIES FOR YOUTH PROGRAMME – APPROVED

INFRASTRUCTURE

The licence applicant must have available training facilities whichcomply with the requirements set by the licensor taking intoaccount the approved youth development programme (cf. 6).

As a minimum, the licensor must define the minimum number

and size of:-a) outdoor training facilities;

b) indoor training facilities;

c) the dressing rooms;

d) the medical room(s).


I.10 B STADIUM – GROUND RULES

Each stadium must issue stadium ground rules and affix them tothe stadium in such a way that the spectators can read them.These rules must provide information on at least the following:-

• admission rights;

• abandonment or postponement of events;

• description of prohibitions and penalties, such as entering

• the field of play, throwing objects, use of foul or abusive

• language, racist behaviour, etc.;

• restrictions with regard to alcohol, fireworks, banners, etc.;

• seating rules;

• causes for ejection from the ground;

• risk analysis specific to the stadium.

I.11 B STADIUM – SANITARY FACILITIES

Each stand must provide sufficient toilet facilities for both sexesin accordance with the local authority regulations or thelicensor’s Requirements. These amenities must include washingfacilities with at least cold water and a plentiful supply of towels




and/or hand dryers.

They must be bright, clean and hygienic and a procedure should be established to maintain that condition throughout each event.AFC recommends for every 1,000 spectators, a minimum of:-

- Five toilets with seats for men;

- Eight urinals; and

- Five toilets with seats for women.

I.12 B STADIUM – COVERED SEATS

The licensor shall determine the minimum number of individualseats which must be covered.

AFC recommends that one third of the individual seat capacitybe covered especially the grandstand and the press box .



I.13 C STADIUM – SIGNPOSTING AND DIRECTIONS

All public direction signs inside and outside the stadium must be

presented in internationally understandable pictographiclanguage.

Clear, comprehensive signposting must be provided at thestadium approaches and around, and throughout the stadium topoint the way to the different sectors.

Tickets must clearly identify the location of the seats for whichthey have been issued. Information on the tickets must correlate with the signpost information provided, both inside and outsidethe stadium.

Colour coding of tickets will assist the entry process, andretained ticket stubs must contain information which will guidespectators once they are inside. Large-scale wall maps must beprovided for the guidance of spectators.

I.14 C STADIUM – SPECTATOR WITH DISABILITIES

The licensor shall set up requirements to accommodatedisabled spectators and accompanying persons safely andcomfortably.




8 PERSONNEL AND ADMINISTRATIVE CRITERIA

8.1 INTRODUCTION

Nowadays a football club is not only a sports club but is also in contact with otherparties. The members, the supporters, the media, the sponsors, the suppliers, thecommercial partners, the local community and, in some cases already, the shareholdersof the football club are more and more involved and interested in the development andresults of a football club.

Therefore, professional support should be sought from specialists from variouseconomic fields and industries (e.g. marketing, finance, entertainment, media, etc.).They can share their knowledge and experience with today’s football clubs, to bettersatisfy the needs and demands of those participants and stakeholders of football whomust be treated as clients.

Football clubs already operate in a competitive environment on the sporting side butthey are increasingly becoming involved in an economic competition. Clubs have tostrengthen the profitability in the long term.

Football clubs should look for new and different sources of revenue in addition to theexisting ones (TV, gate receipts, sponsors) in order to be more independent of theincome from the sporting success of the club and to have greater possibilities offunctioning as a financially successful entity.

In this respect, football clubs need advice from other professionals, experienced, welleducated and innovative people who can bring different skills and know-how into theclub and help to satisfy the additional needs and demands of today’s football.

8.2 OBJECTIVES

The objectives of the personnel and administrative criteria are that:-

• licence applicants are managed in a professional way;

• licence applicants have available well-educated, qualified and skilled specialists

with a certain know-how and experience;

• the players of the first and other teams are trained by qualified coaches andsupported by the necessary medical staff.


Professional, well-educated and experienced staff is of key importance to run a footballclub in an efficient and effective manner. Being professional at all levels and in allfunctions does not mean that licence applicants have to recruit only full-time staff.




The focus is on the professional manner in which the persons appointed perform theirduties. Each criterion in this chapter is really important for the smooth and successfulrunning of the club, and every club could or should be able to afford these functions infinancial terms.

The professionalism will also be improved if clubs are defining clear profiles for thesefunctions, which include the main activities, the main responsibilities (technical,financial and decision power, if applicable) and the requirements for the job (education, working experience, technical know-how, IT-skills, human competences, language skillsand others incl. football know-how).

It is up to the decision-making body of the licence applicant to look for people, whomeet the set requirements and to engage those candidates that comply with the definedprofile (e.g. full-time, part-time, volunteer).

Qualified coaches are the basis for high quality of education within the football teams.In order to achieve this objective, licence applicants need the support of the nationalassociation to establish a coach education programme. To improve the football skills of your youth teams as well as your first team squad in all aspects (technically, tacticallyand physically), trained and qualified coaches are needed. Each youth player whodreams of becoming a professional footballer is entitled to the best qualified coachesfrom the youngest age. Other skills (e.g. psychological training, media training, socialskills, language skills, etc.) are necessary and must be achieved through specific trainingorganised by the national association with a view to issuing a licence for coaches. Thisis not only desirable but is a must.

In collaboration with the national associations, AFC has implemented the AFC Coach Education system throughout Asia which standardizes the delivery and quality of coacheducation. The AFC Pro-, AFC A- and AFC B- and AFC C- certificates / licenses offer“free movement of coaches” within AFC member associations.

Additional administrative support from specialists in safety and security matters willthen ensure that matches are organised as safe events.

8.4 CRITERIA



P.01 A CLUB SECRETARIAT

The licence applicant must have available office space to run itsadministration.

The required surface of the office(s) and the required technicalminimum infrastructure including phone, fax and email must be

available.




The licence applicant must have appointed the appropriatenumber of skilled secretarial staff according to its needs to runits daily business. It must also ensure that its office is open tocommunicate with the licensor and the public.


P.02 A GENERAL MANAGER

The licence applicant must have appointed a General Manager being responsible for running its daily business (operativematters).

The appointment must have been done by the appropriate body(e.g. Executive Board) of the licence applicant.


P.03 A FINANCE OFFICER

The licence applicant must have appointed a Finance Officer being responsible for its financial matters who can be either aperson working in the club’s administration or an externalpartner mandated by the club through a written contract.

The Finance Officer must hold as a minimum one of the

following qualifications:-a) a diploma of certified public accountant; or

b) a diploma of qualified auditor; or

c) a “recognition of competence” issued by the licensor basedon its financial background and a practical experience infinancial matters of at least 3 years’.

The appointment must have been done by the appropriate bodyof the licence applicant.


P.04 A SECURITY OFFICER

The licence applicant must have appointed a Security Officer being responsible for safety and security matters.

The Security Officer must hold as a minimum one of thefollowing qualifications:-

a) a certificate as policeman or security person according tonational law, or;




b) a safety and security diploma based on a specific courseissued by the national association or by a state recognisedorganisation, or;

c) a “recognition of competence” approved by the national

association, which is based on the participation in specificsafety and security course of the national association and atleast one year experience in such matters.



P.05 A MEDIA OFFICER

The licence applicant must have appointed a Media Officer beingresponsible for media matters.

The Media Officer must hold as a minimum one of the followingqualifications:-

a) diploma in journalism education;

b) concluded a media officer education course provided by thenational association or an organisation recognised by thenational association;

c)

a “recognition of competence” approved by the nationalassociation, which requires at least one year experience insuch matters.



P.06 A MEDICAL DOCTOR

The licence applicant must have appointed at least one doctor being responsible for the medical support and advice for the firstsquad as well as for doping prevention policy. He must ensuremedical support during matches and training.

The Medical Doctor must possess medical qualifications [MD/ MBBS degree from Medical University/ Medical College(minimum 5 year program)] and must be duly registered with the Mdical Board / Medical Council in the Member Country as wellas with the national association or league.






P.07 A PHYSIOTHERAPIST

The licence applicant must have appointed at least onephysiotherapist being responsible for medical treatment and

massages for the first squad during the trainings and matches.

The physiotherapist must possess a Degree in Physiotherapy from University / College ( 3 year degree program).

The physiotherapist must be recognised and certified by theappropriate national health authorities and/or registered withphysiotherapy board/ council in member country.

The physiotherapist must be duly registered with nationalassociation or league.

The appointment is done by the appropriate body of the licenceapplicant.


P.08 A HEAD COACH OF FIRST SQUAD

The licence applicant must have appointed a Head Coach beingresponsible for football matters of the first squad.

The Head Coach must:-

a) hold at least a valid AFC ‘A’ Certificate or any valid foreigncoaching diploma which is equivalent to this one andrecognized by AFC as such (Alternative 1 according to tablein the Manual; the licensor must define which alternativeapplies by taking into account the status of implementationof the AFC Coach Education programme); or

b) already have started the required education course,recognized by the national association, allowing him to

achieve the required diploma as defined under a) above. Thesimple inscription to such an education course is notdeemed to be in compliance with the criterion (Alternative 2according to the table in the Manual); or

c) hold a “recognition of competence” issued by AFC. A“recognition of competence” is provided by AFC in cases where the Head Coach of the first squad does not meet therequired certificate as defined under a) and b) above but has been a head coach at professional level or national team inthe last five years preceding his application/appointment as

head coach.




The Head coach must be duly registered with the nationalassociation or league. The appointment of the head coach musthave been done by the appropriate body of the licence applicant.


P.09 A ASSISTANT COACH OF FIRST SQUAD

The licence applicant must have appointed an assistant coachassisting the head coach in all football matters of the first squad.

The assistant coach must:-

a) hold at least a valid AFC ‘B’ Certificate or any valid foreigncoaching diploma which is equivalent to this one andrecognized by AFC as such (Alternative 1, or 2 according to

table in the Manual; the licensor must define whichalternative applies by taking into account the status ofimplementation of the AFC Coach Education programme

b) already have started the required education course,recognized by the national association, allowing him toachieve the required diploma as defined under a) above. Thesimple inscription to such an education course is notdeemed to be in compliance with the criterion (Alternative 3according to the table in the Manual);

The assistant coach must be duly registered with nationalassociation or league. The appointment must have been done bythe appropriate body of the licence applicant.


P.10 A HEAD OF YOUTH DEVELOPMENT PROGRAMME

The licence applicant must have appointed a head of the youthdevelopment programme being responsible for running the daily business and the technical aspects of the youth sector.

The Head of the youth development programme must:-

a) hold at least a valid AFC ‘A’ Certificate or any valid foreigncoaching diploma which is equivalent to this one andrecognized by AFC as such (Alternative 1 or 2 according totable in the Manual; the licensor must define whichalternative applies by taking into account the status ofimplementation of the AFC Coach Education programme);

b) already have started the required education course,

recognized by the national association, allowing him toachieve the required diploma as defined under a) above. Thesimple inscription to such an education course is not




deemed to be in compliance with the criterion (Alternative 3according to the table in the Manual);

The Head of the youth development must be duly registered withthe national association or league. The appointment of the Head

of the youth development must have been done by theappropriate body of the licence applicant.


P.11 A YOUTH COACHES

The licence applicant must have appointed at least one coachresponsible for all football matters for each mandatory youthteam (cf. S.02).

The youth coach must hold the minimum qualification asdefined by the licensor.

He must be duly registered with national association or league.The appointment must have been done by the appropriate bodyof the licence applicant.


P.12 A SAFETY AND SECURITY ORGANISATION - STEWARDINGThe licence applicant must have established a safety and securityorganisation for home matches through the engagement ofstewards. For this purpose, it must:-

a) employ the stewards; or

b) conclude a written contract with the stadium ownerproviding the stewards; or

c) conclude a written contract with an external securitycompany providing stewards.

The licence applicant must provide appropriately qualifiedstewards (internal or external).



P.13 B RIGHTS AND DUTIES

The rights and duties of the licence applicant’s staff membersdefined in P.01 to P.12 must be defined in writing





P.14 B DUTY TO NOTIFY SIGNIFICANT CHANGES

Any event occurring after the submission of the licensingdocumentation to the licensor representing a significant change

compared to the information previously submitted and related tocriteria P.01 to P.12, must be notified to the licensor within thefixed deadline (see AFC comment in the Manual).

The compliance with this criterion shall be assessed by thelicensor in respect of the next licensing cycle.


P.15 B DUTY OF REPLACEMENT DURING THE LICENSING SEASON

If a function defined in criteria P.01 to P.11 becomes vacantduring the licensing season due to a reason beyond the controlof the licence applicant (illness, accident, etc.) then the licenceapplicant must ensure that such function is taken over by:-

a) a person who holds the necessary qualification and fulfillingthe criterion (in which case the replacement may be for anindefinite period of time);

b) a person who does not hold the necessary qualification anddoes not fulfill the criterion (in which case the replacement

is only temporarily and cannot last longer than until theend of the licensing season).

If a function in criteria P.01 to P.12 becomes vacant due to adecision of the licence applicant (e.g. release of head coach) thenthe licence applicant must ensure that such function is takenover by:-

a) a person who holds the necessary qualification and fulfillingthe criterion (in which case the replacement may be for anindefinite period of time);

The replacement must be notified to the national association within 7 working days.

The compliance with this criterion shall be assessed by thelicensor in respect of the next licensing cycle.




9 LEGAL CRITERIA

9.1 INTRODUCTION

This chapter defines the minimum legal criteria for licence applicants.

9.2 CRITERIA



L.01 A DECLARATION IN RESPECT OF THE PARTICIPATION IN AFC

CLUB COMPETITIONS

The licence applicant must submit a legally valid declarationconfirming the following:-

a) it recognises as legally binding the statutes, rules andregulations and decisions of FIFA, AFC, the nationalassociation and, if they exist, of the national league;

b) it recognizes the exclusive jurisdiction of CAS (the Court ofArbitration for Sport in Lausanne) for any dispute ofinternational dimension and in particular involving FIFAand/or AFC;

c)

it recognizes the prohibition on recourse to ordinary courtsunder the FIFA and AFC Statutes;

d) at national level, it will play in competitions that arerecognised and endorsed by the national association (e.g.national championship, national cup);

e) at continental level, it will participate in competitionsrecognised and endorsed by AFC. To avoid any doubt, thisprovision does not relate to friendly matches;

f) it undertakes to abide by and observe the provisions andconditions of the National Club Licensing Regulations;

g) all submitted documents are complete and correct;

h) it authorises the competent club licensing authority toexamine documents and seek information and, in the eventof any appeal procedure, to seek information from anyrelevant public authority or private body according tonational law;

i) it acknowledges that AFC reserves the right to execute spot-checks at national level reviewing the assessment process andthe decision making;

j) it acknowledges that FIFA reserves the right to execute spot-checks at national level to review the assessment process and




the decision making in case AFC fails to implement andexecute a sport check procedure at national level.

k) it will inform the licensor about any significant change, eventor condition of major economic importance and subsequent

event occurred after the submission of the licensingdocumentation (cf.P.14, F.05 and F.07) within the fixeddeadlines (cf. P.14 see AFC comments);

This declaration must be executed by an authorised signatory nomore than three months prior to the corresponding deadline forits submission to the licensor.


L.02 A OTHER DOCUMENTS AND CONFIRMATIONS FROM THE LICENCE APPLICANT

The licence applicant must submit the following documents:-

a) Copy of the licence applicant’s current company articles(e.g. company act);

b) An extract from a public register (e.g. trade register)containing information on the license applicant (such asname, address, legal form, list of authorized signatories andtype of required signature)

These documents must be executed by an authorised signatoryno more than three months prior to the corresponding deadlinefor their submission to the licensor.


L.03 A OWNERSHIP AND CONTROL OF CLUBS

The licence applicant must submit a legally valid declarationoutlining the ownership structure and control mechanism of the

club.

No natural or legal person involved in the management,administration and/or sporting performance of the club, eitherdirectly or indirectly:-

a) holds or deals in the securities or shares of any other clubparticipating in the same competition;

b) holds a majority of the shareholders’ voting rights of anyother club participating in the same competition;

c)

has the right to appoint or remove a majority of themembers of the administrative, management or supervisory




body of any other club participating in the samecompetition;

d) is a shareholder and alone controls a majority of theshareholders’ voting rights of any other club participating in

the same competition pursuant to an agreement enteredinto with other shareholders of the club in question;

e) is a member of any other club participating in the samecompetition;

f) is involved in any capacity whatsoever in the management,administration and/or sporting performance of any otherclub participating in the same competition;

g) has any power whatsoever over the management,

h) administration and/or sporting performance of any other

club participating in the same club competition.

This declaration must be executed by an authorized signatory nomore than three months prior to the corresponding deadline forits submission to the licensor (cf. F.01).


No. Grade Description L.04 B DISCIPLINARY PROCEDURE WITHIN THE CLUB

The licence applicant must submit a legally valid Disciplinaryregulation of the club which shall comply with the national lawand FIFA, AFC and National Association statutes, rules andregulations under which the infringement of club rules,regulations and decisions shall be prosecuted and sanctions shall be applied in accordance with a legally established proceedingand by competent body of the club.



L.05 C CODE OF CONDUCT FOR PLAYERS AND OFFICIALS

It is recommended that the licence applicant establishes a legally valid code of conduct for players and officials which is incompliance with the national law and FIFA, AFC and NationalAssociation Statutes, Rules and Regulations.





L.06 C LEGAL OFFICER

It is recommended that the licence applicant appoint a legalperson (full time or part time) who is responsible to handle all

legal matters in the licence applicant’s activities.

The legal advisor shall have the necessary legal qualifications.




10 FINANCIAL CRITERIA

10.1 INTRODUCTION

The preparation and presentation of financial statements by entities differs fromcountry to country due to a variety of social, economic and legal circumstances and dueto different countries having in mind different users of financial statements whensetting national requirements.

AFC recognises that the implementation of the financial criteria in the nationalregulations presents a challenging task for many member associations and clubs.

10.2 OBJECTIVES

The financial criteria aim principally to:-

• Improve the economic and financial capability of the clubs;

• Increase clubs’ transparency and credibility;

• Place the necessary importance on the protection of creditors;

• Safeguard the continuity of international competitions for one season; and

• Monitor financial fair play in AFC club competitions.

10.3 BENEFITS

Implementation of the financial criteria will help deliver both short and long termimprovements for clubs, the licensors and for the football family in general. For the

football family in general, the financial criteria should help to:-

• Safeguard the continuity and integrity of competitions;

• Increase the transparency and credibility of clubs’ financial operations and,thereby, of European football generally;

• Improve confidence in the probity of the football industry;

• Create a more attractive market for the game’s commercial partners and

investors; and• Provide the basis for fair competition, because competition is not just about the

teams on-the-pitch.

For the licensors, the financial criteria should help to:-

• Improve their understanding of the financial position and prospects of theirmember clubs;

• Encourage clubs to settle liabilities to creditors on a timely basis;

• Enhance their ability to be proactive in assisting clubs with financial issues; and

•

Provide a starting point for club benchmarking, at a national level, for thoselicensors and clubs who want to develop this aspect.




For the clubs, the financial criteria should help to:-

• Improve standards and quality of financial management and planning activities;

• Enable better management decision-making;

•

Enhance clubs’ financial and business credibility with stakeholders;• Improve financial stability; and

• Enhance revenue generating ability and cost management.

10.4 CRITERIA


Every licensor has to ensure that, in respect of the clubs which qualify for AFC club

competitions, the following minimum criteria are met. For implementation within thenational club licensing regulations, the licensor may develop additional criteria,information requirements and assessment procedures.


F.01 A ANNUAL FINANCIAL STATEMENTS - AUDITED

Regardless of the legal structure of the licence applicant, annualfinancial statements based on the local legislation forincorporated companies shall be prepared and audited byindependent auditors.

10.4.1.1 BALANCE SHEET

The minimum requirements for the content in respect of balancesheet items at the statutory closing date (and comparativefigures in respect of the prior statutory closing date) are stated below.

Current assetsa) cash and cash equivalents ;

b)

accounts receivable from player transfers;c) accounts receivable from group entities and related parties(3);d) accounts receivable - other;e) inventories;

Non current assetsf) tangible fixed assets(1);g) intangible assets – players(1);h) intangible assets – others(1);i) investments(2);

Current liabilities




j) bank overdrafts and loans;k) accounts payable relating to player transfers;l) accounts payable to group entities and related parties(3);m) accounts payable - other;n) tax liabilities;

o)

short term provisions(4);

Non current liabilitiesp) bank and other loansq) other long term liabilities;r) tax liabilities;s) long term provisions(4);

Net assets/liabilitiest) net assets/liabilities;

Equityu) treasury shares; v) issued capital and reserves.(5)

Management may consider that line items (i) to (xxii) are bestpresented on the face of the balance sheet and the additionalinformation (described below) in notes.

The minimum information requirements in respect of certain balance sheet items shall also include the following:-

(1) In respect of each of tangible fixed assets and intangibleassets, a reconciliation of the carrying amount at the beginning and end of the period, showing additions,disposals, revaluations, impairment, depreciation/amortisation and any other changes.

(2) Investments shall include investments in subsidiaries, jointlycontrolled entities and associates. In respect of investmentsin subsidiaries, jointly controlled entities and associates, as aminimum, the following information must be disclosed for

each investment:-i. The name;

ii. Country of incorporation or residence;

iii. Type of business/operations of the entity;

iv. Proportion of ownership interest;

v. If different, proportion of voting power held; and

vi. A description of the method used to account for theinvestments.

(3) Sub-classification of the total balance receivable to disclose




separately amounts receivable from group entities andamounts receivable from other related parties ; and, sub-classification of the total balance payable to discloseseparately amounts payable to group entities and amountspayable to other related parties.

(4) For each class of provision, disclose the carrying amount atthe beginning and end of the period, the amount utilisedand any amount released, or credited, in the period.

(5) Sub-classification of the total balance of issued capital andreserves to disclose separately share capital, share premium,other reserves and retained earnings.

10.4.1.2 PROFIT AND LOSS ACCOUNT

The minimum requirements for the content in respect of profitand loss account (sometimes referred to as an income statement)items for the financial year (and comparative figures in respect ofthe prior financial year) are stated below.

Revenuea) gate receipts; b) sponsorship and advertising;c) broadcasting rights;d) commercial;e) other operating income;

Expensesf) cost of sales/materials;g) employee benefits expense;h) depreciation and amortisation (1);i) impairment of fixed assets (2); j) other operating expenses;

Otherk) profit/loss on disposal of assets(3)

l)

finance costs;m) tax expense;n) profit or loss after taxation.

The minimum information requirements in respect of certainprofit and loss account items also include the following:-

(1) Separate disclosure required of depreciation of tangiblefixed assets, amortization of player registration costs andamortisation of other intangible assets.

(2) Separate disclosure required of impairment of player

registration costs and impairment of other tangible orintangible fixed assets.




(3) Separate disclosure required of profit or loss from disposalof player registrations and profit or loss from disposal ofother tangible or intangible fixed assets.

10.4.1.3 CASH FLOW STATEMENT

A cash flow statement, when used in conjunction with the rest ofthe financial statements, provides information that enables usersto evaluate the changes in net assets/liabilities of an entity, itsfinancial structure (including its liquidity and solvency) and itsability to manage the amounts and timing of cash flows in orderto adapt to changing circumstances and opportunities.

The cash flow statement shall report cash flows for the financial year (and comparatives for the prior financial year) classified

separately by operating, investing and financing activities, in amanner which management consider most appropriate.

The components of cash and cash equivalents shall be disclosedand there shall be presented a reconciliation of the amounts inthe cash flow statement with the equivalent items reported in the balance sheet.

10.4.1.4 NOTES TO THE FINANCIAL STATEMENTS

Notes to the annual financial statements shall be presented in a

systematic manner. Each item on the face of the balance sheet,profit and loss account and cash flow statement shall be cross-referenced to any related information in the notes. The minimumrequirements for disclosure in notes are as follows:-

a) Accounting policies

The basis of preparation of the financial statements and asummary of the significant accounting policies used.

b) Controlling party

When the reporting entity is controlled by another party,there must be disclosure of the related party relationship andthe name of that party and, if different, that of the ultimatecontrolling party. If the controlling party or ultimatecontrolling party of the reporting entity is not known, thatfact shall be disclosed. This information shall be disclosedirrespective of whether any transactions have taken place between the controlling parties and the reporting entity.

c) Related party transactions

If there have been transactions between related parties duringthe period, the reporting entity shall disclose the nature of




the related party relationship, as well as information aboutthe transactions during the period and outstanding balancesat the period end, necessary for an understanding of thepotential effect of the relationship on the financialstatements. At a minimum, disclosures must include:-

i. the amount of the transactions;

ii. the amount of outstanding balances and:

• their terms and conditions, including whether they aresecured, and the nature of the consideration to beprovided in settlement; and

• details of any guarantees given or received;

iii. provisions for doubtful debts related to the amount ofoutstanding balances; and

iv.

the expense recognised during the period in respect of bad or doubtful debts due from related parties.

d) Pledged assets and assets under reservation of title

Disclose the existence and amounts of restrictions on title,and property, plant and equipment pledged as security forliabilities or guarantees.

e) Contingent liabilities

Unless the possibility of any outflow in settlement is remote,the reporting entity shall disclose for each class of contingentliability at the statutory closing date a brief description of thenature of the contingent liability and, where practicable:-

i. an estimate of its financial effect;

ii. an indication of the uncertainties relating to the amountor timing of any

iii. outflow; and

iv. the possibility of any reimbursement.

f) Other disclosure

Any additional information or disclosure that is not presentedon the face of the balance sheet, profit and loss statement orcash flow statement, but is relevant to an understanding ofany of those statements and/or is required to meet theminimum financial information requirements.

F.02 A NO PAYABLES OVERDUE TOWARDS FOOTBALL CLUBS

ARISING FROM TRANSFER ACTIVITIES

The licence applicant must prove that it has no payables overdue(e.g. final and binding decisions of the FIFA Players’ StatusCommittee, the FIFA Dispute Resolution Chamber and the Court




of Arbitration for Sport) towards football clubs arising fromtransfer activities as at 31 December of the year preceding theseason to be licensed, unless by the following 31 March theyhave been fully settled, deferred by mutual agreement with thecreditor or are subject to a not obviously unfounded dispute

submitted to a competent authority.

F.03 A NO PAYABLES OVERDUE TOWARDS EMPLOYEES AND SOCIAL

/ TAX AUTHORITIES

The licence applicant must prove that, in respect of contractualand legal obligations with its current and former employees(including all professional players according to the applicable FIFA Regulations on Status and Transfer of Players, the generalmanager (P.02), the finance officer (P.03), the security officer(P.04), the doctor (P.05), the physiotherapist (P.06), the head

coach of first-team squad (P.08), the assistant coach of first-team squad (P.09), the head of youth development (P.10) andthe youth coaches (P.11); list exhaustive), it has no payablesoverdue towards employees and social/tax authorities as at 31 December of the year preceding the season to be licensed, unless by the following 31 March they have been fully settled, deferred by mutual agreement with the creditor or are subject to a notobviously unfounded dispute submitted to a competentauthority.

F.04 A WRITTEN REPRESENTATIONS PRIOR TO THE LICENSING DECISION

Within seven days prior to the start of the period in which thelicensing decision is to be made by the First Instance Body, thelicence applicant must make written representations to thelicensor.

The written representations shall state whether or not any eventsor conditions of major economic importance have occurred, thatmay have an adverse impact on the licence applicant’s financial

position since the balance sheet date of the preceding auditedannual financial statements.




11 FINAL PROVISIONS

11.1 APPENDICES

11.1.1.1 All appendices to the present regulations form an integral partthereof.

11.2 DISCIPLINARY PROCEDURES

11.2.1.1 Any breach of these regulations may be penalized by AFC inaccordance with the AFC Disciplinary Code.

11.3 IMPLEMENTING PROVISIONS

11.3.1.1 The AFC Administration shall take the decisions and adopt, in theform of directives, the detailed provisions necessary for implementingthese regulations.

11.4 MATTERS NOT PROVIDED FOR11.4.1.1 Matters not provided for in these regulations shall be decided by the

AFC Executive Committee, whose decisions are final.

11.5 RATIFICATION

11.5.1.1 These regulations were ratified by the AFC Executive Committee at itsmeeting on 26 March 2010 and came into force immediately.

For the AFC Executive Committee

President: General Secretary:

Mohamed Bin Hammam Alex Soosay

Kuala Lumpur, March 2010

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1) AFC Club Licensing Regulations

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