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No. of 1996

The Mutual Funds Act, 1996

Virgin Islands

I Assent

Governor, 1996

VIRGIN ISLANDS

NO. OF 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 , 1996]

ENACTED by the Legislature of the Virgin Islands as follows:

Preliminary

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

2. (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 twenty-five thousand dollars 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 two hundred and fifty thousand dollars 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 of this Act and shall cause a notice of such recognition to be published in the Gazette.