Categories of Mutual Funds

Categories of Mutual Funds under the MFO are:

  • Registered Mutual Funds are constituted under TCI law and may only issue equity interests to investors who meet prescribed qualifications or the equity interests of which are listed on a stock exchange recognised by the TCI.
  • Recognised Mutual Funds are constituted outside the TCI and the equity interests of which are listed on a stock exchange recognised by the TCI.
  • licenced Mutual Funds do not qualify as registered or recognised but are otherwise approved.
  • Exempt Mutual Funds include funds in which the equity interests are held by not more than fifteen investors who may appoint or remove the fund administrator by majority vote, and funds that are only authorised to issue equity interests to qualifying professional investors provided that the fund is administered from within the Islands. Qualifying professional investors are defined in the Mutual Funds Regulations 2001. An application for agreement and such other information must be submitted in order for the Commission to agree that the mutual fund is an exempt mutual fund.

The Mutual Fund Ordinance 1998 provides for the licensing of Mutual Fund Administrators and Restricted Mutual Funds Administrators.

It is an offense for a person to conduct mutual fund administration in or from within the Islands without a licence issued under the MFO and similarly for an operator to cause a mutual fund to carry on business or attempt to carry on business in or from within the Islands unless such fund is registered, recognised, licenced or agreed to be an exempt mutual fund.

A person who commits an offence in either instance is liable for a fine of $100,000.00.