BRITISH VIRGIN ISLANDS

The Mutual Funds Act, 1996

No. 6 of 1996

Compiled September 1997

by Foreign Tax Law, Inc.

PO Box 2189

Ormond Beach, Florida 32175-2189 USA

tel. (904) 253-5785

fax (904) 257-3003

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Website: http://www.foreignlaw.com

I Assent

59d. David Mackilligin

Governor

20th June, 1996

An Act to provide for the regulation, authorisation and Control of mutual funds and their managers and administrators carrying on business in or from within the Virgin Islands and for related matters.

Gazetted, 19th August 1996

ENACTED by the Legislature of the Virgin Islands as follows:

PRELIMINARY (Mutual Funds Act)

s1. Short Title and Commencement (Mutual Funds Act)

s2. Interpretation (Mutual Funds Act)

PART I. ADMINISTRATION (Mutual Funds Act)

s3. Appointments (Mutual Funds Act)

s4. Delegation of power (Mutual Funds Act)

s5. Annual Report (Mutual Funds Act)

s6. Records of the Registrar (Mutual Funds Act)

s7. Mutual Funds Advisory Committee (Mutual Funds Act)

PART II. PUBLIC FUNDS (Mutual Funds Act)

S8. Registration (Mutual Funds Act)

s9. Application for registration (Mutual Funds Act)

s10. Application for consent to be registered (Mutual Funds Act)

s11. Power to grant registration (Mutual Funds Act)

s12. Registration Procedure (Mutual Funds Act)

s13. Accounting records and financial statements (Mutual Funds Act)

s15. Certificate of compliance (Mutual Funds Act)

s16. Investors rights (Mutual Funds Act)

s17. Limitation of action and amount recoverable (Mutual Funds Act)

PART III. PRIVATE FUNDS (Mutual Funds Act)

s18. Recognition (Mutual Funds Act)

s19. Application for recognition (Mutual Funds Act)

s20. Power to grant recognition (Mutual Funds Act)

s21. Recognition Procedure (Mutual Funds Act)

PART IV. MANAGER AND ADMINISTRATORS

S22. Lincensing (Mutual Funds Act)

s23. Application for a license (Mutual Funds Act)

s24. Power to Grant Licenses (Mutual Funds Act)

s25. Licensing procedure (Mutual Funds Act)

PART V. GENERAL (Mutual Funds Act)

S26. Notices to accompany applications (Mutual Funds Act)

S27. Form and conditions of Certificates of Licences (Mutual Funds Act)

s28. Annual Fees (Mutual Funds Act)

s29. Cancellation of Certificates or Licences (Mutual Funds Act)

s30. Cancellation Procedure (Mutual Funds Act)

s31. Appeal of Cancellations (Mutual Funds Act)

s32. Appeal by Existing Entities (Mutual Funds Act)

s33. Appeal Procedure (Mutual Funds Act)

s34. Grant or cancellation to be published (Mutual Funds Act)

s35. Power to Grant Exemptions (Mutual Funds Act)

s36. Access to Information and Records (Mutual Funds Act)

s37. Immunity and actions by the Registrar (Mutual Funds Act)

s38. Confidentiality (Mutual Funds Act)

s39. Exemption from certain enactments (Mutual Funds Act)

s40. Offences and penalties (Mutual Funds Act)

s41. Power to the Minister to vary the Schedule (Mutual Funds Act)

s42. Regulations (Mutual Funds Act)

S43. Transitional (Mutual Funds Act)

SCHEDULE 1. APPLICATION FOR REGISTRATION OF A PUBLIC FUND (Mutual Funds Act)

SCHEDULE 2. FEES (Mutual Funds Act)

PART I. FEE FOR ISSUING A CERTIFICATE OF COMPLIANCE (Schedule 2. Mutual Funds Act)

PART II. APPLICATION FEES (Schedule 2. Mutual Funds Act)

PART III. ANNUAL FEES (Mutual Funds Act)

PRELIMINARY (Mutual Funds Act)

s1. Short Title and Commencement (Mutual Funds Act)

This Act may be cited as the Mutual Funds Act, 1996 and shall come into force on such date as the Governor may appoint by proclamation published in the Gazette.

s2. Interpretation (Mutual Funds Act)

(1) In this Act, unless the context otherwise requires:

“administrator” means a person who:

(a) for valuable consideration provides a mutual fund with administrative services and facilities alone or together with accounting services; or

(b) is entitled to provide to mutual funds (by whatever name called) such services and facilities as provided in paragraph (a) under the laws of a recognised Country or Jurisdiction;

“auditor” means a person who is entitled to practice as public accountant and to perform audits under the laws of the Territory or of a recognised Country or Jurisdiction;

“company” means a body corporate, wherever incorporated or constituted;

“existing entity” means

(a) a public fund,

(b) a private fund, or

(c) a manager or administrator,

which was carrying its business in or from within the Territory immediately before the coming into force of this Act;

“financial year”, in relation to a mutual fund, means the period not exceeding fifty-three weeks at the end of which the balance of the fund’s accounts is struck or, if no such balance is struck or a period of more than fifty-three weeks is employed for that purpose, then calendar year;

“Governor” means the Governor in Council;

“investor” means a person who owns or holds shares (as herein defined) issued by a mutual fund;

“manager” means a person who,

(a) for valuable consideration, provides a mutual fund with management services alone or together with investment advice or administrative services; or

(b) is entitled to provide to mutual funds (by whatever name called) such services or advice as provided in paragraph (a) under the laws of a recognised country or jurisdiction;

“Minister” means the minister responsible for the administration of this Act;

“mutual fund” or “fund” means a company incorporated, a partnership formed or a unit trust organised, under the laws of the Territory or of any other country or jurisdiction which

(a) collects and pools funds for the purpose of collective investment in accordance with the principle of risk spreading, and

(b) issues shares (as herein defined) that entitle the holder to receive on demand or within a specified period after demand an amount computed by reference to the value of a proportionate interest in the whole or in a part of the net assets of the company, the partnership or the unit trust, as the case may be,

and includes an umbrella fund whose shares are split into a number of different class funds or sub-funds;

“officer” includes:

(a) a director, alternate director, the president, a vice-president, the secretary, the treasurer, and any other person designated as an officer of a company by by-law, by resolution of the directors or by any other instrument;

(b) a general partner of a partnership; and

(c) a trustee of a unit trust;

“partnership” means a contractual relation which subsists between persons carrying on a business in common with a view of profit and includes a partnership formed under the laws of the Territory or of any other country or jurisdiction notwithstanding any statutory definition thereof to the contrary;

“person” includes an individual natural person, a mutual fund, any company, partnership, unit trust or trustee;

“private fund” means a mutual fund that:

(a) the shares issued by it are not offered to the general public and are owned or held by:

(i) not more than fifty investors where the first time investment of each of such investors is not less than $25,000 in the United States currency or the equivalent in any other currency; or

(ii) any number of investors where the first time investment of each of such investors is not less than $250,000 in the United States currency or the equivalent in any other currency; or

(b) is designated as private fund by regulations;

“promoter” means a person acting alone or in conjunction with others directly or indirectly who takes the initiative in forming or organising the business of a mutual fund, but does not include an underwriter who receives underwriting commission without taking any part in the founding or organising of the mutual fund business;

“prospectus” means any prospectus or amended prospectus, notice, circular, advertisement, information memorandum or other invitation offering to the public for subscription or purchase any shares issued by a mutual fund;

“public fund” means a mutual fund which, by means of publishing or distributing a prospectus or by any other means, offers any shares it issues for subscription or purchase to any interested member of the general public;

“recognised Country or Jurisdiction” means any Country or Jurisdiction recognised by the Minister under subsection (3)

“Registrar” means the Registrar of Mutual Funds or Deputy Registrar of Mutual Funds appointed under this Act or such other person as may be performing the duties of the Registrar under this Act;

“regulations or the regulations” means regulations made under this Act;

“security” means any document or instrument constituting evidence of title to or interest in the capital assets, property, profits, earnings or royalties of any person, as herein defined, and includes:

(a) bonds, debentures, notes, mortgages and other evidence of indebtedness;

(b) any share, stock, document or instrument commonly known as a security; and

(c) any document or instrument constituting evidence of an option, subscription or other interest in a security or constituting evidence of an interest in an association of legatees or heirs;

“share” means share in the share capital of a mutual fund company and includes an interest in a mutual fund partnership and a unit in a mutual fund unit trust;

“underwriter” means a person who:

(a) as principal, agrees to purchase shares issued by mutual funds with a view to offering them to the public; or

(b) as agent for a mutual fund, offers for sale or sells to the public shares issued by the mutual fund;

“unit trust” means a contractual arrangement creating a trust under the laws of the Territory or of any other country or jurisdiction in which unit holders participating in the arrangement are the beneficiaries of the trust.

(2) In this Act:

(a) every company incorporated and every partnership formed or unit trust organised under the laws of the Territory for the purpose of carrying on business as a mutual fund, a manager or administrator shall, if carrying on business anywhere outside the Territory, be deemed to be carrying on business from within the Territory; and

(b) the expression “carrying on business from within the Territory” includes carrying on business outside the Territory from a place of business or a registered office within the Territory.

(3) The Minister may recognise any Country or Jurisdiction for the purposes or this Act and shall cause a notice of such recognition to be published in the Gazette.

PART I. ADMINISTRATION (Mutual Funds Act)

s3. Appointments (Mutual Funds Act)

(1) There shall be appointed:

(a) a Registrar of Mutual Funds and Deputy Registrar of Mutual Funds both of whom shall be public officers; and

(b) any other public officers as may be necessary to administer this Act.

(2)The Registrar has:

(a) the duty to supervise mutual funds and managers and administrators in accordance with this Act; and

(b) in and for the discharge of that duty, the powers conferred upon him by this Act.

(3) The Registrar may, upon request by any person to whom this Act applies and the payment of the fee set out in Part I of Schedule 2 or such other amount as may be prescribed by regulations, issue to such person a certificate of compliance in such form as the Registrar thinks fit.

(4) The Registrar, the Deputy Registrar or any employee of the office of the Registrar shall not, knowingly, have any financial interest in any person registered, recognised or licensed under this Act.

s4. Delegation of power (Mutual Funds Act)

(1) The Governor and the Minister may in writing delegate any of their respective powers conferred upon them by this Act to the Registrar and thereupon this Act shall be read as if those powers were originally conferred upon the Registrar.

(2) The Registrar may delegate any of his powers or duties under this Act to the Deputy Registrar and thereupon this Act shall be read as if those powers or duties were originally conferred or imposed upon the Deputy Registrar.

s5. Annual Report (Mutual Funds Act)

(1) The Registrar shall, on or before the 30th day of April in each year, prepare and deliver to the Minister a report consisting of:

(a) a summary of the nature and number of:

(i) filings made under this Act;

(ii) registrations, recognitions and licences granted under this Act;

(iii) enforcement proceedings or disciplinary measures taken under this Act; and

(b) a general commentary on the law relating to the mutual funds industry and on the practice and development of that law.

(2) On receiving the report delivered to him pursuant to subsection (1), the Minister shall lay the report before the Legislative Council.

s6. Records of the Registrar (Mutual Funds Act)

(1) The Registrar shall keep separate registers for all:

(a) registered public funds;

(b) recognised private funds; and

(c) licensed managers and administrators.

(2) The registers required under subsection (1) shall show:

(a) the information required under section 26 (a), (b) and (c) with respect to each registered public fund, recognised private fund and licensed manager or administrator;

(b) the date of registration, recognition or licence, as the case may be; and

(c) the status of such registration, recognition or licence if cancelled and the date thereof.

(3) Registers kept by the Registrar shall be in such form as he may determine and, subject to section 38, shall be open to public inspection during ordinary office hours on payment of an inspection fee of five dollars or such other amount as may be prescribed by regulations.

s7. Mutual Funds Advisory Committee (Mutual Funds Act)

(1) There shall be a Committee called the Mutual Funds Advisory Committee which shall consist of not more than five persons appointed by the Minister from among members of the private sector who are known to him to have adequate knowledge of and experience in the mutual funds industry.

(2) The Minister shall appoint a senior public officer who shall be the Chairman of the Mutual Funds Advisory Committee and the Registrar of Mutual Funds shall be an ex-officio member thereof.

(3) The Mutual Funds Advisory Committee shall:

(a) advise the Minister on any matter referred to it by him relating to the mutual funds industry;

(b)on its own motion report and make recommendations to the Minister on any matter relating to mutual funds as it sees fit; and

(c) have power to establish:

(i) its own working rules and procedures; and

(ii) as many sub-committees as it thinks necessary.

PART II. PUBLIC FUNDS (Mutual Funds Act)

S8. Registration (Mutual Funds Act)

No public fund shall carry on any business or arrange or administer its affairs in or from within the Territory unless it is registered under this Act.

s9. Application for registration (Mutual Funds Act)

(1) A public fund may apply to the Governor for registration to carry on business in or from within the Territory.

(2) An application shall be:

(a) made in the form and contain the information as set out in Schedule 1; and

(b) accompanied by:

(i) a statement setting out the nature and scope of the business to be carried on by the applicant in or from within the Territory, including the name of any other country or jurisdiction where the applicant is carrying on or intends to carry on business;

(ii) the application fee set out in Part II of Schedule 2 or such other amount as may be prescribed by regulations;

(iii) the instrument by which the applicant is constituted or such other proof as may be satisfactory to the Governor that the applicant is lawfully constituted under the laws of the Territory or of any other country or jurisdiction;

(iv) the notices required under section 26; and

(v) such other documents or information as the Governor may reasonably require for the purpose of determining the application.

s10. Application for consent to be registered (Mutual Funds Act)

(1) The promoters of a public fund that is proposed to be formed, may apply to the Governor for his consent to register such proposed public fund upon being lawfully constituted under the laws of the Territory or of any other country or jurisdiction and upon complying with the requirements of this Act.

(2) An application for consent under subsection (1) shall be:

(a) in the form of a letter setting out the particulars of the proposed public fund; and

(b) accompanied by the application fee set out in Part II of Schedule 2 or such other amount as may be

prescribed by regulations.

(3) The consent of the Governor shall be:

(a) in such form as the Governor may direct; and

(b) valid for a period of three months from the date it is granted subject to there being no change, that the Governor considers material, in any of the particulars contained in the application for consent.

(4) The promoters of a proposed public fund may, upon the expiry of the three months period referred to in subsection (3) (b) apply for the renewal of the Governor’s consent subject to:

(a) supplying such documents or information as the Governor may require; and

(b) the payment of the application fee required under subsection (2)(b).

s11. Power to grant registration (Mutual Funds Act)

(1) The Governor may, in his discretion, grant or refuse to grant :

(a) registration under section 9; or

(b) his consent under section 10.

(2) Notwithstanding subsection (1), the Governor shall refuse to grant registration or his consent, as the case may be, if he determines that it is not in the public interest that such registration or consent should be granted.

(3) Except as provided in section 32, where the Governor, in the exercise of his powers under subsection (1) (a) , makes a decision refusing to grant registration, he shall not be bound to assign any reasons for his decision which shall not be subject to appeal or review in any court.

s12. Registration Procedure (Mutual Funds Act)

(1) Where the Governor grants registration pursuant to section 9 he shall direct the Registrar accordingly and the Registrar shall:

(a) register the public fund in the register maintained by him for the purpose under section 6; and

(b) issue a certificate to the registered public fund as directed by the Governor showing the date of registration.

(2) Where the Governor grants his consent under section 10, the promoters of the proposed public fund shall, within the three months period referred to in section 10 (3)(b) from the date of granting such consent or the renewal thereof, deliver to the Registrar:

(a) the consent of the Governor;

(b) satisfactory proof that the proposed public fund is lawfully constituted in the Territory or elsewhere;

(c) the application fee required under section 9 (2) (b) (ii); and

(d) the notices referred to in section 9 (2) (b) (iv).

(3) If the Registrar is satisfied that the proposed public fund has complied with the requirements of subsection (2), he shall register the public fund and issue to it a certificate of registration in accordance with the procedure set out in subsection (1).

(4) The Registrar shall refuse to register the proposed public fund if he determines that:

(a) its registration has not received the consent of the Governor pursuant to section 10; or

(b) it has not complied with any of the requirements of subsection (2).

(5) Any person aggrieved by a decision of the Registrar under subsection (4) may appeal to the Governor whose decision shall be final.

s13. Accounting records and financial statements (Mutual Funds Act)

(1) Every registered public fund shall:

(a) maintain adequate accounting records and prepare financial statements in respect of each financial year in accordance with generally accepted accounting principles applicable in the Territory or in any other recognised Country or Jurisdiction; and

(b) keep such accounting records and financial statements available for examination by the Registrar or any person authorised under his hand at:

(i) its place of business in the Territory; or

(ii) such other place as its officers may see fit, provided that copies of such records and statements or such other documents or information as the Registrar may consider adequate are kept at its place of business in the Territory.

(2) The financial statements required under subsection (1) shall be:

(a) audited by an auditor acceptable to the Registrar (in this Act called “the approved auditor”) in accordance with generally accepted auditing standards applicable in the Territory or in any other recognised Country or Jurisdiction;

(b) accompanied by the report of the approved auditor thereon; and

(c) provided to or made available for examination by all investors of the registered public fund.

s14. Duty to publish and file a prospectus (Mutual Funds Act)

(1) No registered public fund shall in or outside the Territory offer its shares to the public unless prior to such offer it publishes in writing a prospectus signed by or on behalf of its officers who approved the contents of the prospectus or authorised its publishing, and files a copy thereof with the Registrar.

(2) Every prospectus shall:

(a) provide, full, true and plain disclosure of:

(i) the market price or value of any shares being offered thereby;

(ii) particulars of the business and finances of the fund offering such shares; and

(iii) all facts that significantly affect or would reasonably be expected to have a significant effect on the disclosures required in sub-paragraphs (i) and

(b) contain a summary statement of investors’ rights as provided in section 16; and

(c) be accompanied by or contain reference to the availability of the financial statements for the last financial year of the fund and the auditor’s report thereon if the fund has completed a financial year in operation.

(3) The Registrar shall not accept for filing a copy of a prospectus unless it is accompanied by a certificate from an attorney certifying that it complies with the requirements of subsection (2).

(4) If all or any part of the prospectus is not in the English language, the Registrar may require that an English translation of the prospectus or that part of the prospectus, verified in a manner satisfactory to him, be filed along with the prospectus.

(5) Where in a prospectus any of the disclosures required under subsection (2) (a) ceases to be accurate, the registered public fund shall publish an amendment thereto giving accurate disclosures and provide a copy thereof to each of its investors and to the Registrar.

s15. Certificate of compliance (Mutual Funds Act)

Every registered public fund, wherever it is constituted, which carries on business outside the Territory under the laws of another country or jurisdiction, shall every year, within three months of the end of its financial year, file with the Registrar a certificate of compliance from the competent authority that is responsible for the regulation and supervision of the conduct of its business in that other country or jurisdiction.

s16. Investors’ rights (Mutual Funds Act)

(1) If a registered public fund publishes a prospectus or any amendment thereto that contains misrepresentation relating to any of the disclosures required under section 14 (2) (a) , a person who purchased any shares pursuant to such prospectus or amendment thereto is deemed to have relied upon the misrepresentation and shall have the rights provided in subsection (2).

(2) A person referred to in subsection (1) may elect to exercise a right of action:

(a) for the rescission of the purchase, or

(b) for damages,

jointly and severally against the fund and every person who, while aware of the misrepresentation, signed the prospectus or amendment thereto and consented to its publishing and filing or caused it to be signed or published and filed.

(3) For the purposes of this section, “misrepresentation” means:

(a) an untrue or misleading statement of any of the disclosures required under section 14 (2) (a) ; or

(b) an omission to disclose any of such disclosures.

(4) No person is liable under this section if he proves that the purchaser purchased the shares offered by the prospectus or amendment thereto with knowledge of the misrepresentation.

(5)The right of action for rescission or for damages conferred by subsection (2) is in addition to and without derogation from any other right the plaintiff may have at law.

s17. Limitation of action and amount recoverable (Mutual Funds Act)

(1) Notwithstanding any provision of law to the contrary, any action pursuant to section 16 (2) may not be commenced after:

(a) 180 days from the day that the plaintiff first had knowledge of the misrepresentation, or

(b) one year from the date of the purchase transaction that gave rise to the cause of action,

whichever is earlier.

(2) In any action under section 16 (2) , the amount recoverable shall not exceed the price at which the shares were purchased or subscribed, including any fees or other charges paid by the plaintiff.

PART III. PRIVATE FUNDS (Mutual Funds Act)

s18. Recognition (Mutual Funds Act)

No private fund shall, in or from within the Territory, carry on business or manage or administer its affairs unless it is recognised under this Act.

s19. Application for recognition (Mutual Funds Act)

(1) A private fund that is constituted under the laws of the Territory is entitled to be recognised under this Act if, upon the coming into force of this Act, it provides proof satisfactory to the Minister that it is:

(a) a private fund within the meaning of this Act; and

(b) lawfully constituted under the laws of the Territory.

(2) A private fund that is constituted outside the Territory may apply for recognition under this Act by sending to the Minister a letter setting out the nature and scope of its business which shall be accompanied by:

(a) the application fee set out in Part II of Schedule 2 or such other amount as may be prescribed by regulations;

(b) the notices required under section 26; and

(c) proof satisfactory to the Minister that the applicant is:

(i) a private fund within the meaning of this Act; and

(ii) lawfully constituted under the laws of another country or jurisdiction.

s20. Power to grant recognition (Mutual Funds Act)

(1) The Minister may, in his discretion, grant or refuse to grant recognition under section 19 (2).

(2) Where the Minister refuses to grant recognition under section 19 (2), the provisions of section 11 (3) shall apply mutatis mutandis.

(3) The Minister shall not refuse to grant recognition under section 19 (1) unless the applicant fails to comply with the requirements of that section.

(4) Where the Minister refuses to grant recognition under section 19 (1), he shall give the applicant notice in writing of his decision and the reasons therefor and the applicant may appeal such decision pursuant to section 33.

s21. Recognition Procedure (Mutual Funds Act)

Where the Minister grants recognition to a private fund, he shall direct the Registrar accordingly and the Registrar shall:

(a) enter the particulars relating to the private fund in the register maintained by him for the purpose under section 6; and

(b) issue a certificate of recognition to the private fund as directed by the Minister showing the date of recognition.

PART IV. MANAGER AND ADMINISTRATORS

S22. Lincensing (Mutual Funds Act)

(1) No person shall, in or from within the Territory, carry on business as manager or administrator of mutual funds unless that person is licensed for the purpose under this Act.

(2) Subsection (1) does not apply to a person who:

(a) is not ordinarily resident or domiciled in the Territory;

(b) is a qualified and authorised manager or administrator of mutual funds (by whatever name called) under the laws of a recognised Country or Jurisdiction; and

(c) has received written permission from the Minister to carry on business as manager or administrator of mutual funds in or from within the Territory.

s23. Application for a license (Mutual Funds Act)

(1) A person who wishes to do so may make an application to the Minister to carry on business in or from within the Territory as:

(a) manager;

(b) administrator; or

(c) both manager and administrator of mutual funds.

(2) An application shall be:

(a) made in such manner as the Minister may direct; and

(b) accompanied by:

(i) the application fee set out in Part II of Schedule 2 or such other amount as may be prescribed by regulations;

(ii) a statement of the financial and human resources and administrative facilities available to the applicant for the competent and efficient conduct of its business; and

(iii) such other documents or information as the Minister may reasonably require for the purpose of considering the application.

s24. Power to Grant Licenses (Mutual Funds Act)

(1) The Minister may, in his discretion, grant or refuse to grant a licence to any applicant.

(2) The Minister shall not grant a licence unless he is satisfied that the applicant:

(a) is a fit and proper person to be engaged in the business of managing or administering the affairs of mutual funds; and

(b) has or has available to him adequate knowledge, expertise, resources and facilities necessary for the proper management or administration of mutual funds.

(3) Notwithstanding subsections (1) and (2), the Minister shall refuse to grant a licence if he determines that it is not in the public interest that a licence should be granted.

(4) Where the Minister refuses to grant a licence to an applicant, the provisions of section 11 (3) shall apply mutatis mutandis.

s25. Licensing procedure (Mutual Funds Act)

Where the Minister grants a licence to an applicant, he shall direct the Registrar accordingly and the Registrar shall:

(a) enter the particulars of the applicant in the register maintained by him for the purpose under section 6; and

(b) issue a licence to the applicant as directed by the Minister showing the date on which the licence is granted.

PART V. GENERAL (Mutual Funds Act)

S26. Notices to accompany applications (Mutual Funds Act)

(1) In addition to any other requirement under this Act, every application for registration, recognition or a licence made under this Act shall be accompanied by a notice of:

(a) the address of the applicant’s place of business and its address for service in the Territory;

(b) the name and address of a person resident in the Territory who is authorised to represent the applicant and to accept service on its behalf; and

(c) the address of any place or places of business that the applicant may have outside the Territory.

(2) If any information contained in any of the notices required to accompany the application pursuant to subsection (1) is altered at any time thereafter, the applicant, upon being a registered public fund, a recognised private fund or a licensed manager or administrator, as the case may be, shall give in writing to the Registrar particulars of the alteration within twenty-one days after the alteration is made.

S27. Form and conditions of Certificates of Licences (Mutual Funds Act)

(1) A certificate or a licence may be granted subject to terms, conditions, restrictions or limitations as the Governor or the Minister, as the case may be, sees fit to specify therein.

(2) A certificate or a licence shall:

(a) be in such form as may be directed by the Governor or the Minister, as the case may be;

(b) be admitted in all courts as prima facie evidence of the facts stated therein; and

(c) remain in force until it is cancelled.

s28. Annual Fees (Mutual Funds Act)

(1) Where:

(a) a public fund is granted registration,

(b) a private fund is granted recognition, or

(c) a person is granted a licence,

there shall be payable for the year in which such registration, recognition or licence is granted the fee set out in paragraph (A) of Part III of Schedule 2, or such other amounts as may prescribed by regulations.

(2) On or before the 31st day of March every year following the year in which registration, recognition or licence is granted there shall be payable the annual fee set out in paragraph (B) of Part III of Schedule 2 or such other amounts as may prescribed by regulations.

(3) An unpaid annual fee may be sued for by the Government by action as a civil debt and the Government may require, and the court may order, the payment of a penalty in an amount equal to the amount of the fee for late payment of the fee.

s29. Cancellation of Certificates or Licences (Mutual Funds Act)

The Governor, in the case of a registered public fund, and the Minister, in the case of a recognised private fund or a licensed manager or administrator, may, subject to sections 30 and 31, cancel a certificate or a licence, as the case may be:

(a) at the request of the holder thereof; or

(b) where the holder thereof:

(i) has ceased to carry on business in or from within the Territory;

(ii) has contravened any provision of this Act, the regulations or any term, condition, restriction or limitation attached to the holder’s certificate or licence, as the case may be;

(iii) has been convicted of an offence under this Act or of a criminal offence in any country or jurisdiction;

(iv) has knowingly and wilfully supplied false, misleading or inaccurate information or failed to disclose information required for the purposes of any provision of this Act or the regulations;

(v) is carrying on business in a manner detrimental to the interests of mutual funds investors or to the public interest; or

(vi) is declared bankrupt or is being wound-up or otherwise dissolved.

s30. Cancellation Procedure (Mutual Funds Act)

(1) Before cancelling a certificate or a licence under paragraph (b) of section 29, the Governor or the Minister, as the case may be, shall:

(a) give the holder thereof notice in writing of the grounds on which he intends to do so;

(b) afford the holder an opportunity to make written representations to him within a period of thirty days after receipt of the notice; and

(c) take any such representations into consideration.

(2) Where in the exercise of his powers under section 29 (b):

(a) the Governor decides to cancel a certificate, or

(b) the Minister decides to cancel a certificate or a licence, as the case may be,

he shall give notice in writing to the holder thereof of such cancellation and the reasons therefor.

s31. Appeal of Cancellations (Mutual Funds Act)

The holder of a certificate or a licence aggrieved by the decision cancelling such certificate or licence may appeal such decision in accordance with section 33.

s32. Appeal by Existing Entities (Mutual Funds Act)

Notwithstanding any provision in this Act, where:

(a) the Governor, in the exercise of his powers under section 11 (1)(a), refuses to grant registration, or

(b) the Minister, in the exercise of his powers:

(i) under section 20 (1) refuses to grant recognition, or

(ii) under section 24 (1) refuses to grant a licence,

to an existing entity, he shall give such existing entity a notice in writing of his decision and the reasons therefor and the existing entity may appeal such decision in accordance with section 33.

s33. Appeal Procedure (Mutual Funds Act)

(1) An appeal under sections 20 (4), 31 or 32 shall be by:

(a) way of summons to a Judge in Chambers; and

(b) serving the Governor or the Minister, as the case may be, with a notice of appeal within twenty-one days or such longer period as the judge may allow, after receipt of the notice required under sections 20 (4), 30 (2) or 32, as the case may be.

(2)The bringing of an appeal under section 31 suspends the decision appealed against pending the determination or abandonment of the appeal.

s34. Grant or cancellation to be published (Mutual Funds Act)

The Registrar shall publish in the Gazette, in such form as he thinks fit, notice of every grant or cancellation of a certificate or a licence under this Act.

s35. Power to Grant Exemptions (Mutual Funds Act)

(1) Upon the recommendation of the Registrar, the Governor may, if he is satisfied that to do so would not be prejudicial to the public interest, direct that all or any of the provisions of this Act or the regulations shall:

(a) not apply, or

(b) apply subject to such modifications as he may specify in the direction,

to any person or any class of persons.

(2) A direction under this section may be:

(a) subject to any conditions as the Governor may see fit to specify therein; and

(b) revoked at any time at the discretion of the Governor.

(3) Notwithstanding any provision or rule of law, a direction under this section is not a statutory instrument having legislative effect.

s36. Access to Information and Records (Mutual Funds Act)

For the purpose of discharging his duties under this Act and the regulations and subject to section 38, the Registrar or any person acting under his authority, may, at all reasonable times, in writing, direct any person to whom this Act applies to:

(a) furnish information, or

(b) provide access to any records, books, or other documents,

relating to the business of that person being carried on under this Act which, in the opinion of the Registrar, are necessary to enable him to ascertain compliance with the provisions of this Act or the regulations.

s37. Immunity and actions by the Registrar (Mutual Funds Act)

(1) No liability shall be incurred by and no suit, action or proceeding shall be brought against the Crown, any agent thereof, the Registrar or any person acting under his authority for any act done or omitted to be done in good faith:

(a) in the performance or intended performance of any function or duty, or

(b) in the exercise or intended exercise of any power,

under this Act or the regulations.

(2) The Registrar may bring actions and institute proceedings in his name of office for the enforcement of any provision of this Act or the regulations, or for the recovery of fees or other sums of money payable under this Act or the regulations.

s38. Confidentiality (Mutual Funds Act)

Notwithstanding section 6:

(a) any information, material or document -furnished to or filed with the Registrar by any recognised private fund is privileged and shall not be disclosed to any person except

(i) the Governor, the Minister, the Attorney General or a public officer authorised by the Governor or the Minister; or

(ii) on the order of a court of competent jurisdiction for the purpose of criminal proceedings;

(b) the Governor may direct that any specified information, material or document furnished to or filed with the Registrar by any registered public fund shall be held in confidence and shall not be disclosed to any person so long as the Governor is of the opinion that to do so is in the public interest.

s39. Exemption from certain enactments (Mutual Funds Act)

(1) Notwithstanding any statutory provision or rule of law to the contrary:

(a) a public fund that is registered or a private fund that is recognised under this Act, and

(b) an investor in any such registered public fund or recognised private fund who is not ordinarily resident or domiciled in the Territory,

are in all respects exempt from any and all of the provisions of the Income Tax Act, the Stamps Act, and the Registration and Records Act.

(2) Notwithstanding the provisions of Part IX (section 235A) of the Companies Act, a company that is incorporated outside the Territory which establishes a place of business within the Territory to carry on business in accordance with the provisions of this Act as:

(a) a registered public fund,

(b) a recognised private fund, or

(c) a licensed manager or administrator,

is exempt from the provisions of that Part IX (section 235A) of the Companies Act.

s40. Offences and penalties (Mutual Funds Act)

(1) A person who:

(a) wilfully makes a misrepresentation in any document required to be filed, furnished or delivered under this Act or the regulations,

(b) wilfully makes any statement or gives any information required for the purposes of this Act or the regulations that he knows to be false or misleading,

(c) knowingly fails to disclose any fact or information required to be disclosed for the purposes of this Act or the regulations, or

(d) being in charge of or having possession of or control over any information, records, books or other documents referred to in section 36, refuses or wilfully neglects to comply with any lawful direction given under that section,

commits an offence under this Act and is liable on summary conviction to a fine of not less than $5,000 and not more than $50,000 or to imprisonment for a period not exceeding two years or both such fine and imprisonment.

(2) Any person who, without reasonable cause, contravenes a provision of this Act or the regulations for which no penalty is provided commits an offence against this Act and is liable on summary conviction:

(a) in the case of a body corporate or unincorporated, a fine of not more than $50,000; and

(b) in the case of an individual, to a fine of not more than $5,000 or to imprisonment for a period not exceeding one month or to both such fine and imprisonment.

(3) A prosecution for an offence under this Act may be commenced within five years from the date of the commission of the offence but not thereafter.

s41. Power to the Minister to vary the Schedule (Mutual Funds Act)

The Minister may by Notice published in the Gazette,

(a) vary the form of Schedule 1 provided such variation does not, in any material respect, change the substance of the Schedule; or

(b) subject to the affirmative resolution procedure of the Legislative Council modify, delete, repeal or replace any Schedule to this Act in whole or in part.

s42. Regulations (Mutual Funds Act)

The Governor may make regulations:

(a) prescribing fees payable under this Act;

(b) prescribing forms for use under this Act;

(c) prescribing criteria with respect to exemptions authorised by this Act;

(d) prohibiting the use of any names or any words or expressions in a name with respect to mutual funds;

(e) designating mutual funds or a class or classes thereof as private mutual funds;

(f) authorising the Registrar to require that any document, statement, report, certificate, release, agreement, or other information be filed with, furnished or delivered to him;

(g) defining, for the purposes oz this Act, terms or expressions used in this Act that are not defined in this Act;

(h) prescribing any matter required to be or which may be prescribed under this Act;

(i) authorising the Registrar to issue directives and policy guidelines for the purposes of this Act or regulations; and

(j) generally for the better administration of this Act and for carrying the intent and purpose of its provisions into effect.

S43. Transitional (Mutual Funds Act)

Any person who, at the date of the coming into force of this Act, is carrying on any business or engaged in any activity relating in any respect, directly or indirectly to mutual funds in or from within the Territory, shall within three months or such longer period as may be granted by the Governor from such date of coming into force comply with the provisions of this Act.

SCHEDULE 1. APPLICATION FOR REGISTRATION OF A PUBLIC FUND (Mutual Funds Act)

(Section 9 (2) (a))

1. Applicant: state name and address of the fund

2. Constitution: (a) state the legal form of the fund:

(i) company

(ii) partnership

(iii) unit trust

(b) state the name of the country or Jurisdiction where the fund is constituted

(c) state the title of the law under which the fund is constituted

3. Officers: (a) state name, address, place of birth and citizenship of each officer of the fund:

(i) directors;

(ii) general partners; or

(iii) trustees

(b) state educational and professional qualifications of each officer

(c) give details of business, occupation or employment of each officer

4. References: give two personal references, a bank reference and a police clearance certificate for each officer

5. Functionaries: state names, addresses and business activities of each of the fund’s:

(a) managers;

(b) administrators;

(c) investment advisers; and

(d) custodians.

6. Prior registration: state if the fund is now or has been registered, licensed, recognised or authorised under any law or regulations relating to mutual funds, collective investment schemes/funds or securities in any country or jurisdiction.

7. Refusal or Disciplinary Measure: Has the fund, any of its officers, managers, administrators, investment advisers or custodians been the subject of:

(a) refusal of an application for registration, licence, recognition or authorisation, or

(b) suspension, cancellation or revocation of registration, licence, recognition or authorisation by any authority in any country or jurisdiction?

give details and reasons

8. Civil Proceedings: Has a judgment been rendered or any suit, action or proceedings pending against any officer of the fund or of any of its functionaries listed in question 5 above, in civil proceedings in any court or tribunal in any country or jurisdiction which has been or is based in whole or in part on fraud, theft, deceit, misrepresentation or similar conduct?

give details

9. Offences: Has any officer of the fund or of any of its functionaries listed in question 5 above been or is being charged, indicted or convicted in any country or jurisdiction for any offence in any criminal or civil proceedings relating to fraud or theft arising out of dealing in mutual funds, collective investment schemes/funds or securities?

10. Bankruptcy: Has an officer of the fund or of any of its functionaries listed in question 5 above been:

(a) declared bankrupt or been party to bankruptcy or insolvency proceedings,

(b) subject to proceedings relating to winding-up, dissolution or creditors’ arrangement, or

(c) subject to proceedings relating to receivership or Creditors compromise,

in any country or jurisdiction?

AFFIDAVIT

I, ……………………………. in my capacity as (Director, general partner or trustee) acting for and on behalf of the applicant public mutual fund,

Do depose and say that I have read and understood the questions in this application form and hereby certify under Oath that the foregoing answers and statements are true, correct and complete to the best of my knowledge, information and belief.

Sworn before me ………………… Name and

Commissioner of Oaths Signature

of Deponent

at the city of ……………………….

this ………. day ……. 19….

SCHEDULE 2. FEES (Mutual Funds Act)

PART I. FEE FOR ISSUING A CERTIFICATE OF COMPLIANCE (Schedule 2. Mutual Funds Act)

(Section 3 (3) (b))

The fee for issuing a Certificate of Compliance pursuant to section 3(3)(b)is $25.00

PART II. APPLICATION FEES (Schedule 2. Mutual Funds Act)

(Sections – 9(2)(b)(ii), 10(2) (b), 19(2) (a), 23(2) (a) (i))

The fee for:

(a) an application for registration under section 9 (2) (b) (ii) is $500.00

(b) an application for consent to be registered under section 10 (2) (b)is $100.00

(c) an application for recognition under section 19 (2) (a) is $350.00

(d) an application for a licence under section 23 (2) (b) (i) is $250.00

PART III. ANNUAL FEES (Mutual Funds Act)

(Section 28 (1) and (2))

(A) Fee payable for the year in which registration, recognition or licence is granted pursuant to section 28 (1)

(1) where registration, recognition or licence is granted on or before the 30th day of June in any year, the fee payable for that year is:

(a) $500.00 by a registered public fund;

(b) $350.00 by a recognised private fund;

(c) $500.00 by a person licensed as manager or administrator; and

(d) $1000.00 by a person licensed as both manager and administrator.

(2) Where registration, recognition or licence is granted on or after the 1st day of July in any year, the fee payable for that year is:

(a) $250.00 by a registered public fund;

(b) $175.00 by a recognised private fund;

(c) $250.00 by a person licensed as manager or administrator; and

(d) $500.00 by a person licensed as both manager and administrator.

(B) The annual fee payable pursuant to section 28 (2) is:

(a) $500.00 by a registered public fund;

(b) $350.00 by a recognised private fund;

(c) $500.00 by a person licensed as manager or administrator; and

(d) $1000.00 by a person licensed as both manager and administrator.

Passed by the Legislative Council this 6th day of June, 1996.

Sgd. Reeial George

Deputy Speaker

Sgd. Hugh A. Hodge Clerk of the Legislative Council.