- The Mutual Funds (Professional Fund) Regulations, 1998; and
- The Mutual Funds (Foreign Funds and Audit) (Exemptions) Directions, 1998.
The Mutual Funds (Professional Fund) Regulations, 1998
These regulations are designed to provide that certain existing Funds may be "grandfathered" into the Professional Fund category. A mutual fund will be designated as a professional fund if:
- It carried on business or was engaged in an activity as a mutual fund on January 2, 1998;
- The initial investments in respect of the majority of each of the investors in the fund were not less than US$100,000.00 or its equivalent; and
- The shares of the fund are, after 30th September, 1998, made available only to professional investors.
It seems reasonable to interpret this phrase as meaning that there will be no new issue or transfer of shares to non-professional investors but it would also seem that existing shareholders who are not 'professional investors' as defined by the Act would not be entitled to acquire any further shares in the fund without changing their status.
The Mutual Funds (Foreign Funds and Audit) (Exemptions) Directions, 1998
These directions provide that a mutual fund that is constituted outside the territory and which manages or administers its affairs in or from within the territory is exempted from the requirement to be registered under section 8, or recognised under section 18(1), of the Act. The new provision is designed to exempt non-BVI incorporated mutual funds which have appointed a BVI company to be its manager or administrator. While the fund will not have to be recognised or registered, the manager or administrator will have to be licensed.