Investment Funds Act 2024 (No. 6 of 2024)

72. Regulations. 72 2024 INVESTMENT FUNDS ACT 6 2024 INVESTMENT FUNDS ACT 6 73 COMMONWEALTH OF DOMINICA ACT NO. 6 OF 2024. I assent SYLVANIE BURTON President 24th December, 2024 AN ACT TO PROVIDE FOR THE REGULATION OF INVESTMENT FUNDS AND THEIR ADMINIS- TRATORS, MANAGERS AND CUSTODIANS, OP- ERATING IN OR FROM WITHIN THE EAST- ERN CARIBBEAN CURRENCY UNION, AND FOR RELATED MATTERS. (Gazetted 3rd January, 2025.) BE IT ENACTED by the Parliament of Commonwealth of Dominica, as follows- PRELIMINARY

1 — (1) This Act may be cited as the - Short title and

1. (1) This Act may be cited as the - Short title and commencement. INVESTMENT FUNDS ACT, 2024. 74 2024 INVESTMENT FUNDS ACT 6 (2) This Act shall come into force on a date to be fixed by the Minister by Order published in the Gazette. Interpretation. 2. (1) In this Act “accredited investor” means a person in any of the following categories, at the time of the sale of securities to that person — (a) the Eastern Caribbean Central Bank; Chap. 73:01. (b) a bank licensed under the Banking Act, or li- censed and operating under a similar law in a jurisdiction outside of the Currency Union, whether acting for its own accounts or in a fiduciary capacity; (c) a licensed intermediary or securities firm operat- ing in a jurisdiction outsideof the CurrencyUnion, acting for its own account or in a fiduciary capacity; (d) an insurance company registered under the In- Chap.78:49. surance Act, or licensed and operating under a similar legislation in a jurisdiction outside of the Currency Union, whether acting for its own account or in a fiduciary capacity; (e) an investment fund licensed or registered under this Act or regulated and operating in a jurisdic- tion outside of the Currency Union; (f) an employee benefit plan if the investment deci- sion is made by a plan fiduciary, which is a bank or trust company licensed under the Banking Act, an insurance company 2024 INVESTMENT FUNDS ACT 6 75 registered under the Insurance Act, or a licensed securities firm, or if the employee benefit plan has total assets in excess of the prescribed amount; (g) a senior officer or general partner of the issuer of securities being offered or sold; (h) an individual whose individual net worth at the time of the purchase exceeds five hundred thou- sand dollars and individual annual income is in excess of two hundred thousand dollars in each of the two most recent years, and has a reasonable expectation of reaching the same income level in the current year; (i) an individual whose joint net worth with that individual’s spouse, at the time of the purchase exceeds one million dollars or whose joint income with that individual’s spouse is in excess of six hundred thousand dollars in each of the two most recent years, and has a reasonable expectation of reaching the same income level in the current year; (j) a person, other than an individual, with total assets in excess of five million dollars, not formed for the specific purpose of acquiring the securi- ties; (k) an entity in which all of the equity owners are accredited investors; (l) the government of a member country or a public authority established in a member country; (m) the government of a foreign jurisdiction or an agency of that government; 76 2024 INVESTMENT FUNDS ACT 6 (n) a person purchasing on behalf of an account that is managed on a fully discretionary basis by that person, if that person is registered or authorised to carry on business as an adviser managing securities on a discretionary basis under — (i) the laws of a member country, or (ii) foreign jurisdiction; (o) a person residing outside of the Currency Union who qualifies as an accredited investor, under similar securities law of that person’s country of residence, or an individual resident outside the Currency Union who meets the criteria specified in paragraph (h) or (i) and is otherwise lawfully entitled to purchase securities under similar secu- rities law applicable to the purchase; “affiliate” in relation to a relationship, means — (a) one entity is affiliated with another entity if one entity is the subsidiary of the other or both are subsidiaries of the same entity, or each entity is controlled by the same person; (b) if two entities are affiliated with the same entity at the same time, they are affiliated with each other; (c) an entity is the holding entity of another if that other entity is its subsidiary; and (d) a person that is not a body corporate or an individual is considered to be an affiliated person of another person, including a body corporate, if it is controlled by that other person, provided that 2024 INVESTMENT FUNDS ACT 6 77 a person is controlled by another person where — (i) in the case of a partnership, the second- mentioned person owns or holds more than fifty per cent of the voting interest in the partnership, and (ii) in the case of the first-mentioned person other than a body corporate, an individual, or a partnership, securities of the first-men- tioned person carrying fifty per cent or more of the voting rights in such person, are held or owned, by or for the benefit of the second- mentioned person; “Agreement” means the Agreement Establishing the Eastern Caribbean Regulatory Commission made on the 24th day of November, 2000 and any revision thereto, the text of which is in the Schedule of the Eastern Caribbean Secu- rities Regulatory Commission Agreement Act, 2024; “applicant” means a person who makes an application under this Act; “associate” in relation to a relationship with a person, means — (a) an entity of which that person beneficially owns or controls, directly or indirectly, either shares or securities currently convertible into shares, and carries ten per cent or more of the voting rights; (b) within a partnership, the partner of the person who acts on behalf of the partnership; (c) a trust or estate, in which that person has signifi- cant beneficial interest or in respect of which he serves as a trustee, legal representative or in a similar capacity; or 78 2024 INVESTMENT FUNDS ACT 6 (d) a relative of that person; “approved auditor” means an auditor approved by the Commission; “approved forms” means forms approved by the Commission and published under Rules; “authorisation” means licensing or registration by the Commission; “Commission” means the Eastern Caribbean Securities Regula- tory Commission established by Article 3 of the Agree- ment; “company” includes a business entity which is incorporated, registered or otherwise established under the laws of a member country or a foreign jurisdiction; “constitutive documents” — (a) means the principal documents governing the formation of the investment fund; (b) includes — (i) in the case of a unit trust, the trust deed, (ii) in the case of a company, the memorandum and articles of association, (iii) in the case of an investment condominium, the governing regulations, (iv) in the case of a partnership, the partnership agreement or articles of partnership, and (v) other material agreements; “Currency Union” means the Eastern Caribbean Currency Union and refers collectively to the countries of Anguilla, Antigua 2024 INVESTMENT FUNDS ACT 6 79 and Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, Saint Christopher and Nevis, Saint Lucia and Saint Vincent and the Grenadines which use the Eastern Caribbean currency as the official currency; “custodian” means a person to whom the property of the invest- ment fund is entrusted for safe keeping; “distribution” means — (a) a trade in a security of an issuer that has not been previouslyissued; (b) a trade, by or on behalf of an issuer, in a previously issued security of that issuer that has been re- deemed, purchased by or donated to that issuer; (c) a trade in a previously issued security of an issuer by a control block holder; (d) a trade within a prescribed class of trades; or (e) a trade described in an Order made by the Commission; “document” includes — (a) information recorded in any form; and (b) in relation to information recorded otherwise than in hard copy, references to its production include references to producing a copy of the information in hard form; “equity interest” means a share, a trust unit, a participation interest or a partnership interest that carries an entitlement to participate in the profits or gains of the issuer and that, except where the issuer is a closed–end fund, is redeem- able or re-purchasable at the option of the investor; 80 2024 INVESTMENT FUNDS ACT 6 “feeder fund” means an investment fund that conducts more than fifty-one per cent of its investing in a master fund directly or through an intermediary entity; “foreign investment fund” means an investment fund that is incorporated, constituted, formed or organized in a foreign jurisdiction; “foreign jurisdiction” means a jurisdiction outside of the Currency Union; “foreign regulatory authority” — (a) means an authority in a foreign jurisdiction that exercises regulatory, supervisory, enforcement or similar functions; and (b) includes — (i) authorities that regulate or supervise banks, insurance companies, or other prescribed in- stitutions, (ii) securities exchanges, (iii) self-regulatoryorganizations, (iv) law enforcement agencies, (v) government or regulatory agencies not men- tioned in subparagraphs (a) to (d),and (vi) any other prescribed authority in a member country of the Currency Union; “general partner” means — 2024 INVESTMENT FUNDS ACT 6 81 (a) in respect of a limited partnership registered under the Companies Act, a partner as defined in Chap.78:04 that law; (b) in respect of a partnership constituted under the laws of a foreign jurisdiction, a person who would be a partner of the partnership if the partnership were constituted under the laws of a member country; “generally accepted accounting principles” means the standards promulgated by the International Accounting Standards Board or as prescribed; “generally accepted auditing standards” means the International Standards on Auditing issued by the International Auditing and Assurance Standards Board or as prescribed; “independent” means a person which is not a subsidiary, affiliate or associate of another person and otherwise meets the prescribed conditions; “interim period” means — (a) a period commencing on the first day of the financial year and ending six months before the end of the financial year; or (b) such other period as the Commission determines; “investment fund” means — (a) a company which — (i) collects and pools investor funds for the purpose of collective investment, (ii) issues equity interests that entitle the holder to 82 2024 INVESTMENT FUNDS ACT 6 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 or other body, partner- ship or unit trust, as the case may be; and (b) a company or other body, partnership or unit trust prescribed as an investment fund for the pur- poses of securities laws, including a closed end fund; (c) includes a public investment fund, a private in- vestment fund, a professional investment fund, a self-managed investment fund or a foreign in- vestment fund; (d) does not include an issuer of a type or description that has been prescribed as not being an invest- ment fund; “investment fund administration” (a) means — (i) to administer the operations and administra- tive affairs of an investment fund, (ii) to provide the administrative services for an investment fund including the accounting, valuation or reporting services, (iii) to provide the principal office of an invest- ment fund, or (iv) the provision of investment advice or invest- ment management or trading execution serv- ices; 2024 INVESTMENT FUNDS ACT 6 83 (b) does not include — (i) the provision of a registered office to an investment fund where the usual corporate secretarial and related services are provided, (ii) in relation to an investment fund, the maintenance of any register of equity inter- ests or the registration and payment of fees; “investment fund administrator” means the person who, provides investment fund administration; “investment fund adviser” means a person not being an officer or employee of an investment fund who for valuable consid- eration, provides or is entitled to provide an investment fund with investment advice only, and who does not provide any investment management services to such investment fund; “investment fund licence” means a licence granted to a fund under section 8; “investment fund manager” means a person who — (a) controls or directs the assets of the investment fund; or (b) provides the investment fund with advice or information relating to investment opportunities; “investor” means a person who holds or owns an interest in — (a) an investment fund; (b) a security issued by an investment fund;or (c) a security in which an invested fund invests; 84 2024 INVESTMENT FUNDS ACT 6 “licensed investment fund administrator” means the holder of an investment fund administration licence; “licensee” means a person licensed under this Act; “master fund” means a company, partnership, unit trust or investment condominium that — (a) has as its investors other investment funds or feeder funds; (b) holds investments and conducts trading activities for the principal purpose of implementing the overall investment strategy of the feeder funds; and (c) has as its investors one or more feeder funds directly or through an intermediary entity estab- lished to invest in the master fund, and for the purposes of this Act such master fund is deemed to be an investment fund; “material change” in relation to an issuer — (a) means a change in the business, operations, as- sets or ownership of an issuer, the disclosure of which is considered important to a reasonable investor in making an investment decision; (b) includes a decision to implement a change made by the directors of the issuer or other persons acting in a similar capacity; “misrepresentation” means — (a) an untrue statement of a material fact or material change; (b) an omission to state a material fact or material 2024 INVESTMENT FUNDS ACT 6 85 change that is required to be stated or is neces- sary to prevent a statement that is made from being false or misleading in the circumstances in which it is made; or (c) in any other circumstance, a statement about something that a reasonable investor considers important — (i) in making a decision to trade a security,or (ii) in relation to a trading or advising relationship with a person, if the statement is untrue or omits information necessary to prevent that statement from being false or misleading in the circumstances; “member country” means a country that is a member of the Currency Union; “Monetary Council” means the Monetary Council established under Article 7 of the Eastern Caribbean Central Bank Agreement signed at Port-of-Spain on the 5th day of July 1983 the text of which is set out in the Schedule of the Eastern Caribbean Central Bank Act; Chap. 74:01 “offering document”, in relation to an investment fund — (a) means a document or series of documents on the basis of which — (i) equity interests in the investment fund are offered for sale, or (ii) persons are invited to subscribe for or pur- chase equity interests in the investment fund; (b) does not include — (i) any other notice, advertisement, letter or 86 2024 INVESTMENT FUNDS ACT 6 other communication used in connection with the offer for sale of any equity interest in the investment fund, or (ii) an invitation to a person to subscribe for or purchase any equityinterest in the investment fund if before the offer or invitation is ac- cepted or taken up the prospective investor is given the opportunity to consider an offering document containing the information under section 11; “operator” — (a) means the person responsible for the day-to-day oversight of the operations of the investment fund; (b) includes — (i) in relation to an investment fund that is a unit trust, the trustee of that trust, (ii) in relation to an investment fund that is a partnership, the general partner in that part- nership, or (iii) in relation to an investment fund that is a body corporate, the directors of that body corpo- rate; “own funds” — (a) means assets that are set aside to cover risks; 2024 INVESTMENT FUNDS ACT 6 87 (b) includes — (i) paid-up share capital, (ii) reserves, and (iii) undistributed profits; “partnership” — (a) means a contractual relationship which subsists between persons carrying on a business in com- mon with a view of making a profit; (b) includes a partnership formed under the laws of a member country or a foreignjurisdiction; “party related to an investment fund” means an investment fund administrator, operator, promoter, custodian, valuer, in- vestment fund manager, investment fund advisor; “participating government” means a government of a member country; “person” includes — (a) a company; (b) a partnership; (c) an association; (d) an organized or incorporated group of persons; (e) another legal entity; or (f) a personal or other legal representative of a 88 2024 INVESTMENT FUNDS ACT 6 person under paragraphs (a) to (e); “prescribed” means made by Regulations or Rules; “private investment fund” means a fund that — (a) is lawfully incorporated, constituted, formed or organized under the laws of a member country or under the laws of a foreign jurisdiction; (b) specifies in its constitutive documents that — (i) it is not authorised to have more than fifty investors, or (ii) an invitation to subscribe for, or purchase, fund interests issued by the fund shall be made on a private basis only; “professional investment fund” means an investment fund that is only offered to persons who are professional investors at the time of issue of the equity interest; “promoter”, in relation to an investment fund — (a) means a person who, whether within or outside the Currency Union — (i) is directly or indirectly responsible for the formation of an investment fund, (ii) causes the preparation or distribution of an offering document; (b) does not include a professional advisor or under- writer acting for or on behalf of a person under paragraph (a); “professional investor” means — 2024 INVESTMENT FUNDS ACT 6 89 (a) a bank or trust company licensed under the Banking Act, or any law relating to trusts of a member country or licensed under the laws of a foreign jurisdiction, whether acting in its indi- vidual or fiduciary capacity; (b) a licensed entity under the Securities Act, 2024 or under the laws of a foreign jurisdiction; (c) an insurance company licensed under the Insur- ance Act, of a member country or licensed under the laws of a foreign jurisdiction; (d) an investment fund licensed or registered under this Act or regulated under the laws of a foreign jurisdiction; (e) an individual whose individual net worth at the time of the purchase exceeds five hundred dollars or individual annual income has been in excess of two hundred thousand dollars in each of the two most recent years, and has reasonable expecta- tion of reaching the same income level in the current year; (f) an individual whose joint net worth with that individual’s spouse, at the time of the purchase exceeds one million dollars or whose joint income with that individual’s spouse has been in excess of six hundred thousand dollars in each of the two most recent years, and has a reasonable expec- tation of reaching the same income level in the current year; (g) a trust with total assets in excess of five million dollars; (h) an entity where all the equity owners satisfy one 90 2024 INVESTMENT FUNDS ACT 6 of the requirements under paragraphs (a) to (g); or (i) an entity with net assets in excess of five million dollars; “public investment fund” means an investment fund that distrib- utes its equity interests to the public in or from within the Currency Union; “record” means a method by which information may be stored; “recognised country” means a country recognised by the Commission under section 70; “register” means a register required to be maintained by the Commission under sections 8(2), 13(4) and 49; “registered foreign investment fund” means a foreign investment fund that is registered by the Commission under section15; “registered office” means — (a) in respect of a company formed under the Compa- nies Act, the registered office of the company; (b) in the case of an external company registered under the Companies Act,an office registered under that Act; (c) in the case of a partnership registered under the Companies Act, the registered office of that partnership; or (d) in the case of a trust, the place shown in the file maintained under any law relating to trusts as the address of the trustees of the trust; 2024 INVESTMENT FUNDS ACT 6 91 “regulated investment fund” means an investment fund that is authorised to carry on business in or from the Currency Union; “regulated person” includes a person authorised under this Act; “Regulations” means Regulations made under section 72; “Rules” means Rules made under section 71; “securities laws” has the meaning assigned under the Securities Act; “self-managed investment fund” means — (a) an investment fund that has not appointed an investment fund manager authorised in accord- ance with this Act; (b) the investment fund has been granted authorisa- tion to act as such by the Commission; “service-provider” means — (a) an investment fund manager; (b) an investment administrator; (c) a custodian; (d) in the case of a fund that is a unit trust, the trustee; (e) a broker-dealer acting for, or in relation to, a fund; or (f) a person undertaking prescribed functions with respect to the investment fund; 92 2024 INVESTMENT FUNDS ACT 6 “significant security holder”, in relation to a person, means a security holder that — (a) beneficially owns, directly or indirectly, or exer- cises control or direction over voting securities of the reporting issuer, or a combination of both, carrying more than ten percent of the votes attached to all voting securities of the reporting issuer outstanding; or (b) is able to affect materially the control of the person, whether alone or by actingin concert with another person; “trust deed” means the written instrument establishing a trust; “trustee”, in relation to a unit trust, means the person holding the property of the fund on trust for the investors; “unit trust” means a trust established by a trustee which, for valuable consideration, issues trust units in, or distributes profits or gains arising from the acquisition, holding, man- agement or disposal of investments of the trust. (2) Other expressions and terms not specifically defined under this Act, have the meaning assigned under the Securities Act, unless the contrary intention appears. PART I INVESTMENT FUNDS Division 1 Prohibitions and Exemptions of Investment Fund Prohibition of 3. (1) A person shall not carry on the business of an unlicensed and investment fund in or from within the Currency Union as a — unregistered investment funds. 2024 INVESTMENT FUNDS ACT 6 93 (a) public investment fund; (b) a self-managed investment fund; (c) private investment fund; (d) professional investment fund; or (e) foreign investment fund, unless the investment fund is licensed under sections 8 and 19 or registered under sections 13 and 16 by the Commission. (2) A person shall not act as a service-provider, or otherwise be concerned with the management or administration, of an investment fund that carries on business in or from within the Currency Union, unless the investment fund concerned is a licensed public investment fund, a licensed self-managed invest- ment fund, a registered professional investment fund, a registered private investment fund or a registered foreign investment fund. (3) For the purposes of this section — (a) an investment fund, whether incorporated, formed or organized within the Currency Union or in a foreign jurisdiction, is deemed to carry on busi- ness in the Currency Union, if — (i) it operates from a place of business in the Currency Union, (ii) it distributes its equity interests to a person within the Currency Union or in a foreign jurisdiction,or (iii) it solicits to persons within the Currency Union or in a foreign jurisdiction; 94 2024 INVESTMENT FUNDS ACT 6 (b) an investment fund that carries on business in a foreign jurisdiction, is deemed to carry on busi- ness from within the Currency Union, if it is — (i) a company incorporated under the laws of a member country, (ii) a partnership formed under the laws of a member country, or (iii) a unit trust established and governed by the trust laws of a member country and is man- aged from within the Currency Union. (4) A foreign investment fund does not carry on business in the Currency Union as an investment fund solely by reason of the appointment of a licensee as its fund administrator, fund manager, investment advisor or custodian. Prohibition against 4. (1) A person, including the investment fund, shall not, promotion of investment funds. whether in or from within the Currency Union, promote an investment fund unless — (a) the investment fund is — (i) a licensed public investment fund, (ii) a licensed self-managed investmentfund, (iii) a registered professional investment fund or private investment fund, or (iv) a registered foreign investment fund, and (v) the investment fund is promoted in accord- ance with this Act; or (b) the person or investment fund is exempted under section 5(1). 2024 INVESTMENT FUNDS ACT 6 95 (2) A person promotes an investment fund under subsec- tion (1) if he or she communicates, or causes an invitation or inducement to be communicated to any other person, or advises or procures any other person, to become an investor, or to offer to become an investor, in an investment fund. (3) A foreign investment fund does not promote the foreign investment fund if an individual subscribes for or pur- chases the interests of the foreign investment fund without solicitation made to that person by or on behalf of that foreign investment fund.

5 — (1) The Commission may, by Rules published in the General exemptions to

5. (1) The Commission may, by Rules published in the General exemptions to promotion. Gazette, exempt from the application of section 4(2) a communi- cation or an advice — (a) of a specified category or description;or (b) made or given in specified circumstances. (2) Rules made under subsection (1) may specify circum- stances in which section 4(1) or 4(2) does not apply with respect to certain specified categories or descriptions of investment funds or persons.

6 — (1) An investment fund may carry on business in or from Exemption period for

6. (1) An investment fund may carry on business in or from Exemption period for registration as a within the Currency Union, as a professional investment fund, for professional investment a continuous period not exceeding thirty days, without being fund. registered if the investment fund — (a) satisfies the criteria for a professional investment fund specified under section 13(2)(a), (c)and (d); and (b) complies with, and is managed and administered in accordance with, the requirements of this Act 96 2024 INVESTMENT FUNDS ACT 6 relating to professional investment funds, other than with respect to registration. (2) An investment fund that commences business shall submit an application to the Commission for registration as a professional investment fund within twenty-one days after the commencement of its business. (3) For the purposes of this Act, an investment fund that commences business under subsection (1) is deemed to have been registered as a professional investment fund for the period in which it carries on business. (4) During the period in which an investment fund carries on business under subsection (1) — (a) the investment fund, a partner of the investment fund or, where the investment fund is a unit trust, the trustee, does not commit an offence under section 3(1); and (b) a person does not commit an offence under section 3(2) by acting as the service-provider of or being concerned with the management or administration of the investment fund. Division 2 Public Investment Funds Licensing of investment 7. An application may be made in the prescribed manner to fund as public investment fund. the Commission for the licensing of an investment fund as a public investment fund — (a) in the case of an investment fund that is incorpo- rated as a company in a member country, by the company; or 2024 INVESTMENT FUNDS ACT 6 97 (b) in the case of a unit trust, by thetrustee.

8 — (1) The Commission may grant a licence on application for Grant of public

8. (1) The Commission may grant a licence on application for Grant of public investment fund licence. licensing under section 7, if it is satisfied that — (a) the fund is — (i) a company incorporated in a member coun- try, or (ii) a unit trust that is governed by the trust laws of a member country and has a trustee that is based in the Currency Union; (b) the investment fund satisfies the requirements of this Act; (c) the investment fund on licensing, complies with this Act; (d) the service-providers of the investment fund sat- isfy the fit and proper criteria of theCommission; (e) the investment fund has, or on licensing would have, an independent custodian; (f) the name of the investment fund is not undesirable or misleading; and (g) it is appropriate to do so in the public interest; and (h) the investment fund satisfies other prescribed requirements. (2) Where the Commission grants a licence under subsec- tion (1), it shall — (a) record the public investment fund in the Register of Public Investment Funds; and (b) issue a licence in the approved form to a public 98 2024 INVESTMENT FUNDS ACT 6 investment fund. (3) The Commission may grant a licence to a public investment fund subject to such conditions as it considers appro- priate. Prohibition on 9. (1) A public investment fund shall not, whether within or invitation to public to subscribe by public outside the Currency Union, make an invitation to the public to investment fund. subscribe for or purchase its fund interests, unless the invitation — (a) is contained in an approved prospectus; and (b) complies with the prescribed requirements. (2) For the purposes of subsection (1), an invitation to more than fifty persons, in the Currency Union or in a foreign jurisdiction, to subscribe for or purchase investment fund inter- ests, is an invitation to the public to subscribe for or purchase investment fund interests. (3) Subsection (1) does not apply to an invitation that is deemed not to be an invitation to the public under section 10. Circumstances in which 10. An invitation to a person to subscribe for or purchase invitation to subscribe not invitation to the investment fund interests is deemed not to constitute an invitation public. to the public if — (a) the invitation is made to, or is directed exclusively at — (i) an accredited investor, (ii) a person having a close connection with the issuer, or (iii) a participating government; 2024 INVESTMENT FUNDS ACT 6 99 (b) the minimum aggregate purchase price payable by a person for the fund interests acquired by him or her pursuant to the invitation — (i) must be paid before the investment fund interests are issued, and (ii) equals or exceeds the prescribed minimum or the equivalent in another currency; or (c) the invitation is made — (i) to a prescribed person, (ii) with respect to investment fund interests issued, or to be issued, by a person under paragraph (a), or (iii) in prescribed circumstances.

11 — (1) An offering document intended to be submitted to the Form and content of

11. (1) An offering document intended to be submitted to the Form and content of offering document. Commission for registration must — (a) be in writing, be dated and be signed by or on behalf of — (i) in the case of a company of the Currency Union, the board of the company, or (ii) in the case of a unit trust, the investment fund manager or the trustee of the trust; (b) provide full and accurate disclosure of all such information as investors reasonably require and expect to find for the purpose of making an informed investment decision; (c) be in the prescribed form, contain the prescribed information, statements, certifications and other prescribed material; and 100 2024 INVESTMENT FUNDS ACT 6 (d) be accompanied by the prescribeddocuments. (2) The Commission shall issue a receipt for an offering document within thirty days after the date of the filing of the prospectus that fulfills the prescribed requirements. (3) A distribution commences on the date that the receipt for the prospectus is issued. Division 3 Private Investment Fund and Professional Investment Fund Registration of private 12. An application may be made in the prescribed manner to investment fund and professional investment the Commission for the registration of an investment fund as a fund. private investment fund or as a professional investment fund — (a) in the case of an investment fund that is a company, by the investment fund; (b) in the case of a unit trust, by thetrustee; (c) in the case of an investment fund that is a partnership, by a partner; (d) in any other case, by the manager, or proposed manager of the investment fund. Grant of registration of a 13. (1) The Commission may register in the prescribed private investment fund manner an investment fund as a private investment fund or a or professional investment fund. professional investment fund if it is satisfied that — (a) the investment fund is lawfully incorporated, con- stituted, formed or organized under the laws of a member country or a foreign jurisdiction; (b) in the case of a private investment fund, the constitutive documents of the investment fund 2024 INVESTMENT FUNDS ACT 6 101 specify that — (i) the investment fund is not authorised to have more than fifty investors, or (ii) an invitation to subscribe for, or purchase investment fund interests issued by the in- vestment fund is made to not more than fifty investors; (c) in the case of a professional investment fund, the constitutive documents of the investment fund specify that — (i) the investment fund interests shall be issued only to professional investors, (ii) the initial investment of each investor in the investment fund, other than exempted inves- tors is not less than the prescribed sum; (d) the investment fund satisfies the prescribed crite- ria for registration of a private investment fund or professional investment fund; (e) the investment fund satisfies the requirements of this Act with respect to the application; (f) the investment fund, on being registered, com- plies with this Act; (g) it is appropriate in the public interest to register the investment fund as a private investment fund or professional investment fund. (2) For the purposes of subsection (1)(b)(ii), an invitation to subscribe for, or purchase, investment fund interests issued by a private investment fund includes an invitation which is made — (a) to specified persons and is not calculated to result 102 2024 INVESTMENT FUNDS ACT 6 in investment fund interests becoming available to other persons or to a large number of persons;or (b) as a result of a private or business connection between the person making the invitation and the investor. (3) For the purposes of subsection (2)(c), the minimum investment limit does not apply in respect of an investment made by a prescribed person as an exempted investor. (4) Where the Commission grants an application for registration under subsection (1), the Commission shall — (a) register the investment fund in the Register of Private Investment Funds or the Register of Professional Investment Funds, as appropriate; and (b) issue the investment fund with a certificate of registration in the approved form. (5) The registration of a private investment fund or professional investment fund is subject to such conditions as may be imposed by the Commission. Obligation to act in 14. (1) A registered private investment fund or professional accordance with investment fund shall not make an offer or invitation of its constitutive documents. investment fund interests, issue any investment fund interests or carry on business in any manner that results in the investment fund— (a) in the case of a private investment fund (i) having more than fifty investors, or (ii) making an invitation to subscribe for, or pur- chase, its in1vestment fund interests other- wise than on a private basis; or 2024 INVESTMENT FUNDS ACT 6 103 (b) in the case of a professional investment fund, issuing investment fund interests — (i) to a person who is not a professional investor, or (ii) where the initial investment, in respect of a professional investor who is not an exempted investor, is less than the prescribed sum. (2) Without limiting the generality of subsection (1), a person shall not be accepted as an investor in a private investment fund or professional investment fund unless that person has provided — (a) in the case of a professional investment fund, written confirmation that he or she is a profes- sional investor; and (b) in the case of a private investment fund or professional investment fund, a written acknowl- edgment that he or she has received, understood and accepted the prescribed investment warning. Division 4 Registration of a Foreign Investment Fund

15 — An application may be made in the prescribed manner to Registration of a foreign

15. An application may be made in the prescribed manner to Registration of a foreign investment fund. the Commission by a foreign investment fund or by its manager, for the investment fund to be a registered foreign investment fund.

16 — The Commission may register in the prescribed manner Grant of registration of a

16. The Commission may register in the prescribed manner Grant of registration of a foreign investment fund. an investment fund as a foreign investment fund if the Commis- sion is satisfied that — (a) the investment fund complies with the require- ments of this Act in respect of the application and, on registration, complies with the requirements of this Act in relation to registered foreign invest- ment funds; 104 2024 INVESTMENT FUNDS ACT 6 (b) the investment fund is subject to an authorisation and supervisoryregime in the jurisdiction in which it is constituted that, in the opinion of the Commis- sion, provides to investors in the Currency Union protection at least equivalent to the protection provided under this Act for investors of public investment funds; and (c) the investment fund is being operated and man- aged in compliance with the authorisation and supervisory regime to which it is subject. Investment Fund 17. The Regulations may make provisions with respect to the Regulations may provide for registration of foreign registration of foreign investment funds, including as to — investment funds. (a) the submission to the Commission and the publi- cation of the prescribed particulars as regards registered foreign investment funds; (b) the notifications to be providedto the Commission with respect to registered foreign investment funds, including as to the amendment of the constituting instruments of a registered foreign investment fund and changes of the service- providers of a registered foreign investment fund; (c) the maintenance in the Currency Union of depos- its and property by and with respect to registered foreign investment funds. Division 5 Self-Managed Investment Fund Licensing of a self- 18. An application may be made in the prescribed manner to managed investment fund. the Commission for the licensing of an investment fund as a self- managed investment fund. 2024 INVESTMENT FUNDS ACT 6 105

19 — (1) The Commission may grant a licence on an application Grant of licence for a self

19. (1) The Commission may grant a licence on an application Grant of licence for a self- managed investment for licensing under section 18 if the Commission is satisfied that fund. the investment fund — (a) is a company incorporated under the laws of a member country or under the laws of a recog- nised country and registered in a member country as an external company under the Companies Chap 78:04 Act; (b) has a board of directors, a majority of whom are independent of the investment fund, the service- providers of the investment fund and parties related to the investment fund; (c) maintains at all times minimum shareholders’ equity of one million Eastern Caribbean Dollars, other than in redeemable securities, or satisfies such capital requirements as the Commission determines; (d) employs one individual who is licensed as a principal, one individual licensed as a compliance officer and one individual licensed as a repre- sentative in accordance with this Act, each with a minimum of three years investment fund-re- lated work experience; (e) establishes and maintains risk management sys- tems and controls to enable it to identify, assess, mitigate, control and monitor risks in relation to the investment fund; (f) has adequate human resources with the neces- sary qualifications, expertise and experience to manage the investment fund and carry out its obligations under this Act; 106 2024 INVESTMENT FUNDS ACT 6 (g) has adequate and appropriate systems, proce- dures and processes to undertake the activities necessary to manage the investment fund in a proper and efficient manner; (h) has appropriate policies and procedures to — (i) identify, mitigate and manage any conflicts of interest between the investment fund and any party related to the investment fund, (ii) ensure best execution of trades for the invest- ment fund, and (iii) prevent churning; (iv) meets such other requirements as the Com- mission determines. (2) The constitutive documents of a self-managed fund licensed under subsection (1) shall contain provisions allowingthe unitholders of the investment fund to require the investment fund to appoint a separate company as investment fund manager and such power shall be exercisable by a resolution passed by at least a majority of the votes cast, in person or by proxy, at a meeting of the unitholders of the investment fund called and held to consider the resolution. (3) A self-managed investment fund shall perform all duties and meet all the other requirements for the investment fund imposed on operators and investment fund managers by this Act. (4) The initial requirements for licensing of a self-man- aged fund shall continue to be satisfied by the person throughout the period of license under this Act. 2024 INVESTMENT FUNDS ACT 6 107 PART II SERVICE-PROVIDERS Division 1 Authorisation of Investment Fund Service-Providers

20 — (1) Subject to this Part, a person shall not carry on Prohibition by service

20. (1) Subject to this Part, a person shall not carry on Prohibition by service- provider. business as a service-provider to an investment fund in or from within the Currency Union unless authorisation has been granted by the Commission. (2) A service-provider authorised by a foreign regulatory authority shall apply in the prescribed manner for registration to carry on business as a service-provider to an authorised invest- ment fund. (3) A service-provider not authorised by a foreign regu- latory authority shall apply in the prescribed manner for licensing to carry on business as a service-provider to an authorised investment fund. Division 2 Operators

21 — (1) An operator of an investment fund shall ensure that Restriction on operator

21. (1) An operator of an investment fund shall ensure that Restriction on operator. the investment fund does not carry on or attempt to carry on business as an investment fund contrary to this Act. (2) A person shall not act as an operator of an investment fund unless, subject to section 19(2) and (3), it is authorized under this Act. Division 3 Investment Fund Manager

22 — (1) Subject to subsection (3), an investment fund shall Appointment of

22. (1) Subject to subsection (3), an investment fund shall Appointment of investment fund manager. appoint an investment fund manager prior to commencement of operations as a regulated investment fund. (2) An investment fund manager appointed under s ub- section (1) shall provideor is entitled toprovidean investment fund 108 2024 INVESTMENT FUNDS ACT 6 with investment management services and such services may include providing investment advice for valuable consideration. (3) The Commission may exempt an investment fund from the requirements of this Division where — (a) the investors are affiliates of the investment fund, where each affiliate is not an investment fund;or (b) it is a feeder fund that invests one hundred per cent of its assets in a master fund. (4) An investment fund exempt from appointing an invest- ment fund manager under subsection (3) shall meet the prescribed requirements. Restriction on 23. (1) A person shall not act as an investment fund manager investment fund manager. of an investment fund unless, subject to section 20 (2) and (3), he or she is authorised under this Act. (2) Subject to subsection (3), a person shall apply in the prescribed manner to the Commission for an authorisation to operate as an investment fund manager. (3) The Commission may authorise a person as an investment fund manager where that investment fund manager — (a) intends to manage a professional investment fund; (b) intends to manage a public investmentfund; (c) intends to manage an investment fund in a ju- risdiction, whose equity interests are offered to professional investors; or (d) is licensed or registered in a recognised country;or (e) meets any other prescribed requirements. 2024 INVESTMENT FUNDS ACT 6 109

24 — (1) The Commission may grant authorisation to an Grant of authorisation

24. (1) The Commission may grant authorisation to an Grant of authorisation investment fund manager under this Part where — to an investment fund manager. (a) the Commission is satisfied that the applicant meets the conditions of this Part; (b) the applicant has the prescribed capital, own funds and professional indemnity insurance un- der section 34; (c) the persons who effectively conduct the business of the applicant are of good repute and are experienced in relation to the investment strate- gies pursued by the investment funds to be man- aged by the applicant, and the conduct of the business of the applicant is decided by at least two persons meeting such conditions; (d) the shareholders or members of the applicant that are significant securityholder, takinginto account the need to ensure the sound and prudent man- agement of the applicant; and (e) the principal office and the registered office of the applicant are located in the Currency Union; and (f) the applicant meets any other prescribed require- ments. (2) The names of the persons under subsection (1)(c) shall be communicated to the Commission prior to the grant of authorisa- tion and the names of every person succeeding the person in office shall be communicated to the Commission.

25 — (1) An investment fund manager shall — General duties of an

25.(1) An investment fund manager shall — General duties of an investment fund manager. (a) act honestly and fairly, with due skill, care and diligence in conducting its activities; 110 2024 INVESTMENT FUNDS ACT 6 (b) act in the best interests of each investment fund and the investors of each investment fund it manages and for the integrity of the market; (c) have and employ effectively the resources and procedures that are necessary for the proper performance of its business activities; (d) take all reasonable steps to avoid conflicts of interest and, when they cannot be avoided, to identify, manage, monitor and, where applicable, disclose those conflicts of interest in order to prevent them from adversely affecting the inter- ests of each investment fund and its investors and to ensure that each investment fund it manages is fairly treated; (e) comply with all regulatory requirements applica- ble to the conduct of its business activities so as to promote the best interests of each investment fund and the investors of each investment fund it manages and the integrity of the market; and (f) treat all investment fund investors fairly and ensure that no investor in an investment fund shall obtain preferential treatment, unless such prefer- ential treatment is disclosed in the relevant con- stitutive documents of the investment fund; and (g) comply with other prescribed requirements. (2) Where an investment fund is exempted from appoint- ing a custodian under section 37(3) the investment fund manager shall ensure it complies with other prescribedrequirements. 2024 INVESTMENT FUNDS ACT 6 111

26 — (1) An investment fund manager which is an authorised Minimum capital and

26. (1) An investment fund manager which is an authorised Minimum capital and professional indemnity investment fund manager, shall meet the prescribed initial and on- insurance requirements. going capital requirements in Eastern Caribbean Dollars or the equivalent in a currency that is acceptable to the Commission. (2) An investment fund manager shall — (a) have own funds or additional own funds which are appropriate to cover potential liability risks arising from professional negligence; or (b) hold a professional indemnity insurance against liability arising from professional negligence which is appropriate to the risks covered.

27 — (1) Subject to subsection (3), an investment fund manager Chief Executive Officer of

27. (1) Subject to subsection (3), an investment fund manager Chief Executive Officer of an investment fund shall appoint in the prescribed manner an individual as a Chief manager. Executive Officer. (2) An investment fund manager shall not appoint an individual as a Chief Executive Officer under subsection (1) unless it is satisfied that the individual is fit and proper and has satisfied the prescribed requirements. (3) A person shall not act as a Chief Executive Officer unless approved by the Commission. (4) The Commission may, by notice in writing to the Chief Executive Officer, attach any necessary conditions to the ap- proval under subsection (3).

28 — (1) Subject to subsection (3), an investment fund manager Compliance officer of an

28. (1) Subject to subsection (3), an investment fund manager Compliance officer of an investment fund manager. shall appoint in the prescribed manner a person as a Compliance Officer, subject to prescribed conditions. (2) A Compliance Officer is responsible for ensuring that an investment fund manager complies with the applicable laws. (3) An investment fund manager shall not appoint a 112 2024 INVESTMENT FUNDS ACT 6 person as Compliance Officer under subsection (1) unless it is satisfied that the person is fit and proper and has satisfied the prescribed requirements. (4) A person shall not act as a Compliance Officer unless approved by the Commission. (5) The Commission may, by notice in writing to the Compliance Officer attach any necessary conditions to the approval under subsection (4). Division 4 Investment Fund Administrator Appointment of 29. (1) Subject to subsection (2), an investment fund shall investment fund administrator. appoint in the prescribed manner an investment fund administra- tor. (2) The Commission may exempt an investment fund from subsection (1). Restriction on an 30. A person shall not act as an investment fund administrator investment fund administrator. unless, subject to section 20(2) and (3), it is authorised. Name of investment fund 31. Unless exempted or authorised by the Commission, a administrator restricted. person other than an authorised investment fund administrator shall not — (a) carry on or attempt to carry on investment fund administration business in or from within the Currency Union with the words “fund adminis- trator” in its name or title; (b) represent in any way that it is carrying on business in or from within the Currency Union as an investment fund administrator. 2024 INVESTMENT FUNDS ACT 6 113

32 — The Commission may grant authorisation to an invest- Grant of authorisation to

32. The Commission may grant authorisation to an invest- Grant of authorisation to an investment fund ment fund administrator if it is satisfied that the applicant — administrator. (a) is a company incorporated or registered under the Companies Act, or International Business Companies Act, of a member country; (b) has sufficient expertise to administer investment funds; (c) is of sound reputation; (d) administers investment funds in a proper manner; (e) has directors, officers, and senior management and significant securityholders who meets the fit and proper requirements as prescribed by the Commission; (f) has a principal office in a member country; (g) complies with the prescribed requirements.

33 — An investment fund administrator shall— Obligations of an

33. An investment fund administrator shall— Obligations of an investment fund (a) provide the principal office for an investment fund administrator. that it administers in or from within the Currency Union; (b) pay the prescribed fees for each investment fund for which it provides a principal office in the Currency Union; (c) ensure that each party related to an investment fund is fit and proper as prescribedbytheCommis- sion; (d) make such reports to the Commission regarding the investment funds for which it acts as the 114 2024 INVESTMENT FUNDS ACT 6 investment fund administrator, as the Commis- sion requires; (e) comply with other prescribed requirements. Requirements for 34. (1) An investment fund administrator which is an author- minimum capital and professional indemnity ised investment fund administrator shall — insurance. (a) meet the prescribed initial and on-going capital requirements in Eastern Caribbean Dollars or the equivalent in a currency that is acceptable to the Commission; (b) hold a professional indemnity insurance against liabilityarisingfromprofessionalnegligencewhich is appropriate to the risks covered. (2) Where the investment fund administrator fails to comply with subsection (1) the Commission shall — (a) request other financial guarantees, acceptable to the Commission, to be supplied by the investment fund administrator within ninety days; or (b) where the investment fund administrator is un- able to provide the guarantees under paragraph (a), revoke the authorisation. Chief Executive Officer of 35. (1) Subject to subsection (3), an investment fund admin- an investment fund administrator. istrator shall appoint in the prescribed manner an individual as a Chief Executive Officer. (2) An investment fund administrator shall not appoint an individual as a Chief Executive Officer under subsection (1) unless it is satisfied that the individual is fit and proper and has satisfied the requirementsas prescribed by the Commission. (3) A person shall not act as the Chief Executive Officer unless approved by the Commission. 2024 INVESTMENT FUNDS ACT 6 115 (4) The Commission may, by notice in writing to the Chief Executive Officer, attach any necessary conditions to the ap- proval under subsection (3).

36 — (1) Subject to subsection (4), an investment fund admin- Compliance officer of an

36. (1) Subject to subsection (4), an investment fund admin- Compliance officer of an investment fund istrator shall appoint in the prescribed manner a person as a administrator. Compliance Officer, subject to such conditions that the Commis- sion specifies. (2) A Compliance Officer is responsible for ensuring that an investment fund administrator complies with all applicable laws. (3) An investment fund administrator shall not appoint a person as Compliance Officer under subsection (1) unless it is satisfied that the person is fit and proper and has satisfied the requirements as prescribed by the Commission. (4) A person shall not act as a Compliance Officer unless approved by the Commission. (5) The Commission may, by notice in writing to the Compliance Officer, attach any necessary conditions to the approval under subsection (4). Division 5 Custodian

37 — (1) A regulated investment fund shall appoint in the Appointment of

37. (1) A regulated investment fund shall appoint in the Appointment of custodian. prescribed manner one or more persons as custodian of the assets of the investment fund. (2) A custodian shall not act on behalf of an investment fund unless it is — (a) authorised under this Act; and (b) established and operating in accordance with the laws of a member country or of a foreign jurisdiction. 116 2024 INVESTMENT FUNDS ACT 6 (3) Notwithstanding subsection (1), the Commission may exempt an authorised investment fund from the requirement to appoint a custodian where — (a) the investment fund’s only investors are affiliates of the investment fund if none of those investors is itself an investment fund; or (b) the assets of an investment fund are of a type that does not require the assets to be held incustody. (4) An investment fund exempt from appointing a custo- dian under subsection (3) shall meet the other prescribed require- ments. (5) A custodian must satisfy the prescribed requirements. Restriction on a 38. A person shall not act as a custodian of an investment custodian. fund unless, subject to section 20 (2) and (3), it is authorised by the Commission. Independence of 39. An investment fund shall have a custodian that is custodian. independent of the investment fund administrator, the investment fund manager and the operator of the fund unless the fund is exempted by the Commission under section 37(3). Segregation of 40. (1) A custodian that holds assets on behalf of an investment fund assets– custodian appointed. investment fund, including cheques and other similar instruments, shall hold the assets separate and apart from its own property or that any other person, and in trust for the investment fund. (2) A custodian that holds cash on behalf of an investment fund shall hold the cash separate and apart from the property of the custodian and any other person in a designated trust account with a financialinstitution licensedunder the BankingAct, or other licensed deposit-taking institution in a recognised country. (3) A custodian may allow a licensed marketplace or clearing facilityto hold or control cash belonging to an investment 2024 INVESTMENT FUNDS ACT 6 117 fund for the purpose of — (a) a transaction for the investment fund with or through that marketplace or clearing facility; or (b) meeting the obligation of the investment fund to provide collateral for a transaction, provided that the investment fund is notified that the cash may be so held or controlled.

41 — (1) Where an investment fund is exempt from appointing Segregation of

41. (1) Where an investment fund is exempt from appointing Segregation of investment fund a custodian, any assets held on behalf of the investment fund, by assets – exempt a party related to the fund, including cheques and similar instru- from appointment of custodian. ments, shall be held separate and apart from its own property and that of any other person, and in trust for the investment fund. (2) A party related to an investment fund that holds cash on behalf of the investment fund must hold the cash separate and apart from the property of the party related to the fund in a designated trust account with a bank holding a licence under the Banking Act,or other licensed deposit-taking institution in a recognised country. (3) A party related to an investment fund may allow a licensed marketplace or clearing facility to hold or control cash belonging to an investment fund for the purpose of — (a) a transaction for the investment fund with or through that marketplace or clearing facility; or (b) meeting the obligation of the investment fund to provide collateral for a transaction, provided that the investment fund is notified that the cash may be so held or controlled. PART III GENERAL REGULATORY MATTERS

42 — (1) An application to the Commission for authorization, shall Application for

42. (1) An application to the Commission for authorization, shall Application for authorization. 118 2024 INVESTMENT FUNDS ACT 6 be made in the prescribed manner and shall be accompanied by — (a) the prescribed information; and (b) the prescribed fee. (2) An authorisation is effective unless— (a) it is revoked by the Commission; (b) it expires; (c) the conditions for continuing the authorisation of the investment fund have not been satisfied;or (d) the Commission accepts a surrender of an au- thorisation of a regulated person under this Act. Misrepresentation. 43. (1) A person who applies for an authorization of an investment fund or service-provider shall not supply the Commis- sion with information that he or she knows or reasonably knows is false or misleading. (2) Where a regulated investment fund becomes aware that a service-provider has provided it with false or misleading information, it shall immediatelynotifythe Commission in writing Restriction on 44. The Commission shall not authorise an investment fund authorisation to investment fund. until the applicant has satisfied the Commission that — (a) each promoter, operator, investment fund advi- sor, investment fund manager, investment fund administrator, auditor, custodian, is fit and proper;and (b) the business of the investment fund and any offering of equity interests in it will be carried out, in accordance with this Act, and any other appli- cable laws. 2024 INVESTMENT FUNDS ACT 6 119

45 — (1) The Commission may grant authorization to an Grant or refusal of

45. (1) The Commission may grant authorization to an Grant or refusal of authorization to an investment fund or service-provider who applies in the prescribed investment fund or manner and on payment of the prescribed fee. service- provider. (2) Where the Commission grants an authorization under subsection (1), the Commission shall issue — (a) in the case of licensing, a licence in the prescribed form; (b) in the case of registration, a certificate of registra- tion in the prescribed form. (3) The Commission shall not grant authorization to an investment fund or service-provider where — (a) the investment fund or sevice provider has not satisfied this Act; (b) for reasons of public interest, the Commission determines that the investment fund or service- provider must not be licensed or registered; or (c) the name of the investment fund or service- provider is — (i) identical to that of any other investment fund or service-provider that is licensed or regis- tered under this Act or which so nearly resembles the name of an investment fund or service-provider licensed or registered under this Act so as to be likely to deceive or cause confusion in the investment funds or service- provider industry, (ii) likely to suggest, falsely, the patronage of or connection with some person or authority, whether within or outside the Currency Un- 120 2024 INVESTMENT FUNDS ACT 6 ion or elsewhere, or (iii) likely to suggest falsely, that the investment fund has a special status in relation to or derived from the respective Governments of the member countries. (4) Where the Commission refuses to grant an application under subsection (3), the Commission shall serve a notice of its decision, in writing, on the applicant. Imposition, variation or 46. (1) The Commission may, if it thinks fit, by notice in revocation of terms and conditions of writing served on the regulated person or party related to an authorisation. investment fund, impose, vary or revoke a condition of an authorisation. (2) An investment fund may request in writing that the Commission waive, vary or revoke any condition attached to its authorisation. Renewal or reinstatement 47. (1) The Commission may renew or reinstate authorisa- of authorisation. tion if the applicant — (a) is considered by the Commission to be fit an proper for renewal or reinstatement; (b) complies with the prescribed requirements;and (c) pays the prescribed fee. (2) A regulated person shall renew its authorisation as applicable, on an annual basis by submitting an application for renewal to the Commission on or by the 1st day of April of each year. (3) An application for renewal or reinstatement of au- thorisation of an investment fund shall be made in the prescribed form and must be accompanied by the prescribed authorisation renewal or reinstatement fee. 2024 INVESTMENT FUNDS ACT 6 121 (4) The Commission shall refuse to renew or reinstate an authorisation where the renewal or reinstatement is not in the public interest.

48 — (1) An investment fund or service-provider shall notify Voluntary surrender of

48. (1) An investment fund or service-provider shall notify Voluntary surrender of licence by investment the Commission in the prescribed manner, of its intention to fund or service-provider. surrender the authorisation granted by the Commission, at least fourteen days prior to the effective date of the surrender. (2) The Commission may, on receiving notification by an investment fund or service-provider under subsection (1) — (a) accept, subject to such terms and conditions as it may impose, the voluntary surrender of the li- cence or certificate of registration of the invest- ment fund if the Commission is satisfied that the surrender of the licence or certificate of registra- tion would not be prejudicial to the public interest; or (b) suspend the authorisation or impose anycondition or restriction on the authorisation that the Com- mission considers appropriate. (3) On the effective date of the surrender, where the Commission has accepted the voluntary surrender of a licence or certificate of registration, the investment fund or service-provider shall — (a) surrender to the Commission the original licence or certificate of registration issued as evidence of its being authorised in the Currency Union; or (b) in the event the original licence or certificate of registration is lost, submit to the Commission an affidavit attesting to the fact of such loss. (4) The Commission shall within fourteen days of accept- ance of the voluntary surrender of an authorisation by an invest- ment fund or service-provider under subsection (2)(a), cause a 122 2024 INVESTMENT FUNDS ACT 6 public notice to be issued, that the investment fund or service- provider is no longer authorised in the Currency Union, by publication in — (a) in the Official Gazette of each member country; (b) publishingin a newspaper of general circulation in each member country; and (c) on the website of the Commission. Commission to maintain 49. (1) The Commission shall maintain an up-to-date register register. to show details of investment funds and service-providers that are authorised or exempted under thisAct. (2) The register under subsection (1) must contain in- formation to include — (a) the name of the regulated person; (b) the contact information for all parties related to an investment fund; (c) any conditions, under which the authorisation is granted; (d) any other prescribedinformation. (3) A person may, on payment of the prescribed fee, inspect and make copies of or take extracts from theregister. Offence. 50. (1) A person who carries on business requiring authori- sation under Part I or II without holding an authorisation, or other than in accordance with the authorisation, commits an offence and is liable on summary conviction — (a) in the case of an individual, to a fine not exceeding five hundred thousand dollars or to imprisonment 2024 INVESTMENT FUNDS ACT 6 123 for a term not exceeding two years or to both; (b) in the case of a company, to a fine of up to one million dollars. (2) Where the offence is a continuing offence, the individual or company is liable to a further fine not exceeding ten per cent of the maximum fine under subsection (1) for every day that the offence continues after conviction.

51 — (1) Unless exempted by the Commission, a person other Restricted names

51. (1) Unless exempted by the Commission, a person other Restricted names. than a regulated investment fund, shall not carry on or attempt to carry on business as an investment fund with the words “fund” or “investment fund” in its name. (2) Where the Commission considers that an investment fund is carrying on business in a name that the Commission refuses under section 21(1)(c), the Commission may direct the investment fund to change its name to a name approved by the Commission.

52 — (1) A regulated investment fund or service-provider may Transfer to another

52. (1) A regulated investment fund or service-provider may Transfer to another jurisdiction. transfer the business of an investment fund or service-provider from the Currency Union to a foreign jurisdiction and shall notify the Commission of such transfer in the prescribed form within fourteen days of the issue of the licence or notification of approval of registration with the foreign jurisdiction. (2) Where notification is given under subsection (1) the regulated investment fund or service-provider shall at the same time — (a) surrender to the Commission the original licence or certificate of registration issued as evidence of being licensed or registered in the Currency Union; or (b) in the event the original licence or certificate of registration is lost, submit to the Commission an 124 2024 INVESTMENT FUNDS ACT 6 affidavit attesting to the fact of such loss. (3) The Commission shall, on being satisfied that this section has been met, issue a public notice that the regulated investment fund or service-provider is no longer authorised in the Currency Union by publication — (a) in the Official Gazette in each member country of the Currency Union; (b) in a newspaper of general circulation in each member country; and (c) on the website of the Commission. Transfer from another 53. (1) An investment fund or service-provider that intends jurisdiction. to transfer the business of the investment fund or service-provider to the Currency Union from a foreign jurisdiction shall notify the Commission of such transfer, in the prescribed form and shall make an application to the Commission for an authorisation not later than twenty-one days prior to the transfer of the business of the investment fund or service-provider to the Currency Union. (2) An investment fund under subsection (1) shall submit to the Commission, the following information in support of an application under subsection (1) — (a) the name of the investment fund or service- provider; (b) the name of investment fund administrator; (c) the name of the investment fundmanager; (d) the address of the registered office or principal office in the Currency Union; (e) the name and address of the operators; 2024 INVESTMENT FUNDS ACT 6 125 (f) the current offering document; (g) evidence that the investment fund or service- provider has complied with the laws of the foreign jurisdiction from which it is transferring; and (h) any other prescribedinformation. (3) An investment fund or service-provider transferring to the Currency Union shall provide evidence of the surrender of the licence in the foreign jurisdiction. (4) The Commission may on the written application in the prescribed manner of the investment fund or service-provider transferring to the Currency Union, extend the period within which the investment fund or service-provider must obtain an investment fund authorisation under this Act.

54 — (1) An investment fund or service-provider that has not Voluntary suspension of

54. (1) An investment fund or service-provider that has not Voluntary suspension of investment fund activity commenced operations within one year of authorisation, or that or service-provider. ceases trading and liquidates and distributes its assets without formally liquidating its structure, shall inform the Commission of the voluntary suspension of its activity. (2) An investment fund or service-provider shall inform the Commission, in writing, within fourteen days of suspending its activity. (3) On being notified that an investment fund or service- provider has suspended its activity under subsection (1), the Commission shall suspend the authorisation of the investment fund or service-provider and cause a public notice to be issued, that the licence or certificate of registration of the investment fund or service-provider has been suspended, by publication — (a) in the Official Gazette in each member country; (b) in a newspaper of general circulation in each member country; or 126 2024 INVESTMENT FUNDS ACT 6 (c) on the website of the Commission. (4) Where an authorisation of an investment fund or service- provider is suspended under subsection (3), the invest- ment fund or service-provider may resume operation within one year from the date of suspension failing which the Commission may revoke the licence or certificate of registration of the suspended investment fund or service- provider. (5) Where an authorisation of an investment fund or service- provider is suspended under subsection (3), the invest- ment fund or service-provider that intends to resume operation shall apply to the Commission to have the suspension of the authorisation lifted, and such application shall be made in the prescribed manner, and the investment fund or service-provider shall pay the prescribed fee. (6) The Commission may on the written application of the investment fundor service-providerextend the periodofsuspension of an authorisation by a period not exceeding eighteen months. (7) On being satisfied that the investment fund or service- provider is in compliance with this Act, the Commission shall lift the suspension of the authorisation of the investment fund or service-provider imposed under subsection (3) and issue a public notice that the investment fund or service-provider has been re- launched, to be published — (a) in the Official Gazette in each member country; (b) in a newspaper of general circulation in each member country; and (c) on the website of the Commission. 2024 INVESTMENT FUNDS ACT 6 127 PART IV ADMINISTRATIVE AND FINANCIAL MATTERS

55 — (1)A service-provider shall not undertake to provide Due diligence by

55. (1)A service-provider shall not undertake to provide Due diligence by authorised service- services to an investment fund unless the service-provider has provider. satisfied itself that it may carry out its tasks and responsibilities to that fund in accordance with the securities laws and all other legislation applicable to that fund. (2) Subsection (1) is a condition of each service-provider authorisation.

56 — (1) A service-provider shall not appoint or charge a third- Delegation of tasks

56. (1) A service-provider shall not appoint or charge a third- Delegation of tasks. party service-provider to assist it with the provision of services for which a service-provider authorization has been granted, unless — (a) the prior written approval of the Commission has been obtained for the appointment or change;or (b) the third-party provider complies with such con- ditions imposed by the Commission; and (c) the prescribed fee has been paid; or (d) the Commission has exempted the service-pro- vider from the obligation to obtain the approval of the Commission. (2) Notwithstanding subsection (1)(a), the Commission may exempt a service-provider from the requirement to obtain written approval for an appointment or change of a third party service- provider. (3) A service-provider with a valid service-provider authorisation may delegate tasks to a third-party service-provider except its responsibilities. 128 2024 INVESTMENT FUNDS ACT 6 Service-provider to give 57. Where a service-provider knows or has reason to believe notice of certain matters. that an investment fund for which it provides services, or an operator, auditor, or a promoter of such investment fund — (a) is, or is likely to become unable to meet its obligations as each falls due; (b) is carrying on business otherwise than in accord- ance with this Act or any other law; or (c) is carrying on business in a manner that is or is likely to be prejudicial to investors or creditors of theinvestment fund, the service-provider shall immediately give the Commission written notice of its knowledge or belief giving its reason for that knowledge or belief. Auditor to be appointed 58. (1) Each regulated person shall appoint in the prescribed manner an approved auditor who shall conduct an audit of the annual financial statements of the regulated person. (2) The audit of the financial statements of a regulated person shall be performed in accordance with generally accepted auditing standards and the auditor shall provide the Commission with the prescribed reports on the financial affairs of the regulated person within the prescribed period. (3) The Commission may impose all or any of the following duties on the auditor of a regulated person— (a) a duty to submit to the Commission such addi- tional information in relation to the audit as the Commission considers necessary; (b) a duty to enlarge or extend the scope of the audit of the business and affairs of the person author- ised under this Act; 2024 INVESTMENT FUNDS ACT 6 129 (c) a duty to carry out any other examination or establish any procedure in any particular case; (d) a dutyto submit a report to the Commission on any matters under paragraphs (b) and (c); and (e) additional duties assigned by the Commission. (4) Each regulated person shall remunerate the auditor in respect of the discharge of such additional duty or duties as the Commission imposes under subsection (2).

59 — Where, during the performance of his or her duties as auditor Obligations of auditors

59.Where, during the performance of his or her duties as auditor Obligations of auditors. for a regulated person under this Act, an approved auditor — (a)becomes aware of any matter which in his or her opinion adversely affects the financial position of the entity being audited to a material extent; or (b) discovers evidence of a contravention of this Act, the auditor shall as soon as is practicable, and in any event within seven days, report the matter in writing to the Commis- sion and the regulated person.

60 — (1) The Commission may at any time instruct a regulated Instructions to audit

60. (1) The Commission may at any time instruct a regulated Instructions to audit accounts. person — (a) to have its accounts audited; and (b) to submit the audited financial statements to the Commission, within such time as the Commission specifies. (2) The audited financial statements under subsection (1) must be prepared in accordance with international auditing stand- ards and must be at the expense of the regulated person.

61 — (1) Within the prescribed periods, a regulated person shall Reporting to the

61. (1) Within the prescribed periods, a regulated person shall Reporting to the Commission. deliver to the Commission — 130 2024 INVESTMENT FUNDS ACT 6 (a) annual financial statements in respect of the regulated person’s financial year along with the report of the auditor; (b) interim financial statements and other informa- tion as may be prescribed; and (c) all other reports, information or documents that the Commission considers necessary. (2) A public investment fund shall disseminate to the public any report filed with the Commission under subsection (1) within the prescribed period. (3) The audit of the financial statements of a regulated person shall be performed in accordance with generally accepted auditing accounting principles and the auditor shall provide the Commission with the prescribed reports on the financial affairs of the regulated person within the prescribed period. Compliance with 62. A regulated person shall use reasonable efforts to ensure directions. compliance with any direction given by the Commission in accordance with this Act. Approval by the 63. A regulated person shall not appoint or change a director, Commission. operator, chief executive officer or a person holding an equivalent position as the case may be, or any other person for whom initial approval by the Commission was required, unless — (a) the prior written approval of the Commission has been obtained, for the appointment or change;or (b) the Commission has exempted the regulated per- son from the obligation to obtain the approval of the Commission; and (c) the prescribed fee has been paid. 2024 INVESTMENT FUNDS ACT 6 131

64 — A regulated person must satisfy the requirements im- Initial requirements must

64. A regulated person must satisfy the requirements im- Initial requirements must be maintained. posed under this Act for the period of the validity of the authori- sation.

65 — (1) The Commission shall administer this Act. Commission to

65. (1) The Commission shall administer this Act. Commission to administer this Act. (2) The Commission shall — (a) maintain a general review of investment fund business in the Currency Union and submit an annual report to the Monetary Council; (b) be responsible for supervision and enforcement in respect of persons to whomthis Act applies;and (c) conduct an investigation of a person where the Commission reasonably believes that the person is or has been in breach of this Act. (3) Where the Commission considers it necessary or expedient, the Commission may — (a) conduct onsite or offsiteinspections; (b) examine prescribed regular returns, auditors’ re- ports or ad hoc reports requested by the Commis- sion; (c) engage in such other activity as the Commission may determine, to regulate the affairs or business of any regulated person for the purpose of a general review or for the purpose of satis- fying itself that this Act and Regulations made under this Act are being complied with. (4) The Commission may charge a prescribed fee for an inspection conducted under this Part. 132 2024 INVESTMENT FUNDS ACT 6 (5) On application, the Commission may grant an exemp- tion regarding the payment of costs where the Commission considers it appropriate. (6) In carrying out its responsibilities, the Commission may, in addition to any powers granted under this Act, exercise any of the powers and responsibilities granted to it under Parts IV, V, VI, VII, VIII, IX, XI, XII, XIII and XIV of the Securities Act, 2024 and the Eastern Caribbean Securities Regulatory Commis- sion Agreement Act, 2024. (7) If the Commission considers it not prejudicial to the public interest to do so, the Commission may exempt an invest- ment fund, service-provider or party related to an investment fund from Parts I, II, III, IV and V. (8) Exemptions granted under subsection (1) shall be published by the Commission in the Gazette and on itswebsite. PART V MISCELLANEOUS General offence. 66. (1) A person who contravenes this Act, for which a penalty is not otherwise provided for in this Act, commits an offence and is liable on conviction on indictment to a fine not exceeding one million dollars or to imprisonment for a term not exceeding ten years or to both. (2) Notwithstanding subsection (1), where an offence is committed by a company, a director or a senior officer of that company who knowingly authorised, permitted or acquiesced in the commission of the offence, he or she also commits an offence andis liable on convictionon indictment toa finenot exceedingone million dollars or to imprisonment for a term not exceeding ten years or to both. Filing and delivery of 67. (1) Unless otherwise required by the Commission, a documents. document required to be filed with or delivered to the Commission 2024 INVESTMENT FUNDS ACT 6 133 under this Act, must be filed or delivered by post or electronic means to the address of the Commission, unless the Commission otherwise requires. (2) A document filed with or delivered to the Commission under subsection (1) is deemed to be filed or delivered on the day of its actual receipt by post or electronic means at the address of the Commission.

68 — A document filed or delivered under section 67, also Publication of

68. A document filed or delivered under section 67, also Publication of requires submission to the public, and such document will be made documents. available to members of the public, via the electronic filing portal of the Commission.

69 — A regulated investment fund, investment fund manager, Winding up, dissolution

69. A regulated investment fund, investment fund manager, Winding up, dissolution or investment fund administrator shall inform the Commission of and termination. its intent to wind up, dissolve or terminate within thirty days or such other time period as may be prescribed by the Commission before the formal winding up, dissolution or other termination procedure has commenced.

70 — The Commission may, by Notice published in the Gazette, Recognised country

70. The Commission may, by Notice published in the Gazette, Recognised country. recognise a country for the purposes of thisAct.

71 — (1) The Commission may make Rules to give effect to the Rules

71. (1) The Commission may make Rules to give effect to the Rules. functions of the Commission under this Act. (2) Without limiting the generality of subsection (1), the Commission may make Rules to prescribe— (a) the fee for filing or delivering a document, the making of an application, taking of an action or a request; (b) the late fee if a person files or delivers a document after the date on which the filing or document is required; (c) the additional fee if a person is late in paying an 134 2024 INVESTMENT FUNDS ACT 6 annual renewal fee; (d) an exemption from the authorisation require- ments; (e) the forms required under this Act. (3) Rules made under this section shall be published in the Gazette. Regulations. 72. (1) The Minister may, on the recommendation of the Commission, make Regulations that are necessary or expedient for carrying out the purposes of this Act. (2) Without limiting the generality of subsection (1), the Minister may, on the recommendation of the Commission, make Regulations to prescribe — (a) the criteria for fit and proper; (b) the procedure for applications made under this Act; (c) the process for change in service-providers; (d) outsourcing of functions of a service-provider; (e) business conduct and conflict of interest; (f) supervision compliance and risk management systems of service-providers; (g) independence of service-providers; (h) the appointment of an operator, investment fund manager, investment fund administrator and custodian; 2024 INVESTMENT FUNDS ACT 6 135 (i) the penalties to be imposed for violation of the Regulations that does not exceed one hundred thousand dollars; (j) any other matter required for giving effect to this Act. Passed in the House of Assembly this 16th day of December, 2024. DANIEL JAMES Clerk of the House of Assembly. . DOMINICA Printed by the Government Printer at the Government Printery, Roseau (Price $13.80 cents )

Investment Funds Act 2024 (No. 6 of 2024)

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