Mutual Funds Act


Published: 2000

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CAP. 268, MUTUAL FUNDS ACT BELIZE

MUTUAL FUNDS ACT

CHAPTER 268

REVISED EDITION 2000

SHOWING THE LAW AS AT 31ST DECEMBER, 2000

This is a revised edition of the law, prepared by the Law Revision Commissioner

under the authority of the Law Revision Act, Chapter 3 of the Laws of Belize,

Revised Edition 1980 - 1990.

This edition contains a consolidation of the following laws- Page

ARRANGEMENT OF SECTIONS 3

MUTUAL FUNDS ACT 7

Amendments in force as at 31st December, 2000.

BELIZE

MUTUAL FUNDS ACT

CHAPTER 268

REVISED EDITION 2000

SHOWING THE LAW AS AT 31ST DECEMBER, 2000

This is a revised edition of the law, prepared by the Law Revision Commissioner

under the authority of the Law Revision Act, Chapter 3 of the Laws of Belize,

Revised Edition 1980 - 1990.

This edition contains a consolidation of the following laws- Page

ARRANGEMENT OF SECTIONS 3

MUTUAL FUNDS ACT 7

Amendments in force as at 31st December, 2000.

THE SUBSTANTIVE LAWS OF BELIZE REVISED EDITION 2000

Printed by the Government Printer,

No. 1 Power Lane,

Belmopan, by the authority of

the Government of Belize.

Mutual Funds [CAP. 268

[ ]

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CHAPTER 268

MUTUAL FUNDS

ARRANGEMENT OF SECTIONS

PART I

Preliminary

1. Short title and commencement.

2. Interpretation.

PART II

Administration

3. Appointments.

4. Delegation of power.

5. Annual report.

6. Records of Registrar.

7. Mutual Funds Advisory Committee.

PART III

Public Funds

8. Registration.

9. Application for registration.

10. Application for consent to be registered.

11. Power to grant consent.

12. Registration procedure.

13. Accounting records and financial statements.

14. Duty to publish and file a prospectus.

15. Certificate of compliance.

16. Investors’ rights.

17. Limitation of action and amount recoverable.

PART IV

Private and Professional Funds

18. Recognition.

19. Application for recognition.

20. Power to grant recognition.

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21. Registrar to register recognized private and professional funds.

PART V

Managers and Administrators

22. Licensing.

23. Application for a licence.

24. Power to grant a licence.

25. Licensing procedure.

PART VI

General

26. Notices to applications.

27. Form and conditions of certificates and licences.

28. Annual fees.

29. Cancellation, etc., of certificates or licences.

30. Cancellation procedure.

31. Right of appeal.

32. Appeal by existing entities.

33. Appeal procedure.

34. Grant or cancellation to be published.

35. Power to grant exemptions.

36. Access to information and records.

37. Immunity of action by Registrar.

38. Confidentiality.

39. Funds exempt from income and business tax, stamp duties, etc.

40. Offences and penalties.

41. Minister’s power to vary Schedules.

42. Regulations.

43. Transitional provision.

FIRST SCHEDULE

SECOND SCHEDULE

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CHAPTER 268

MUTUAL FUNDS

[3rd May, 1999]

PART I

Preliminary

1.-(1) This Act may be cited as the Mutual Funds Act.

(2) This Act shall come into force on a day to be appointed by the

Minister by Order 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 alone or together with accounting

services; or

(b) is entitled to provide to mutual funds (by whatever name

called) such services as provided in paragraph (a) under

the laws of a recognized country or jurisdiction;

“auditor” means a person who is entitled to practice as a public accountant

and to perform audits under the laws of Belize or that of a recognized

country or jurisdiction;

“Code of Practice” or “Code” means the code of practice prescribed by

regulations;

Short title and

commencement.

12 of 1999.

Commencement

[1. 7. 1999]

S.I. 72 of 1999.

Interpretation.

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

“constitutional documents” means:

(a) in the case of a company, the memorandum and articles

of association or such other instrument of incorpora-

tion; or

(b) in the case of a partnership, the agreement by which the

partnership is formed and governed; or

(c) in the case of a unit trust, the trust deed by which the

unit trust is organised or governed;

“Court” means the Supreme Court of Belize;

“custodian” means the person who holds the property of the mutual fund in

safe keeping;

“Deputy Registrar” means such person authorised under the Act to act as

Deputy Registrar or delegated by the Registrar to do all such things as the

Registrar can do;

“Exchange Control Regulations Act” means the Exchange Control Regula-

tions Act and any statutory modifications thereto;

“existing entity” means:-

(a) a public fund;

(b) a private or professional fund; or

(c) a manager or administrator,

CAP. 52.

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which was carrying on its business in or from within Belize immediately

before the coming into force of this Act;

“financial year”, in relation to a mutual fund,means, subject to subsection (2)

(c) of this section, the period not exceeding fifty-three weeks at the end of

which the balance of the mutual 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 a calendar year;

“Income and Business Tax Act” means the Income and Business Tax Act and

any statutory modifications thereto;

“investor” means a person who owns or holds shares (as herein defined)

issued by a mutual fund;

“Judge in Chambers” means a Judge of the Supreme Court of Belize sitting in

Chambers;

“manager” means a person, not being an officer or an employee of a mutual

fund which has delegated management functions to a person licensed under

this Act, 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

CAP. 55.

formed, a unit trust organised or other similar body formed or organised

under the laws of Belize or that of any other country or jurisdiction which:

(a) collects and pools funds for the purpose of collective

investment; 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, but excludes any arrangements which are

designated by regulations;

“officer” includes:

(a) a director, alternate director, the president, a vice-

president, and any other person designated as an

officer of a company by by-laws, 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 relationship which subsists between

persons carrying on a business in common with a view of profit and includes

a partnership formed under the laws of Belize or of any other country or

jurisdiction notwithstanding any statutory definition thereof to the contrary;

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“person” includes an individual natural person, a mutual fund, any company,

partnership, unit trust or trustee, or other similar entity;

“private fund” means a mutual fund which:

(a) has less than fifty investors and the constitutional

documents of which prohibit the offering of its shares to

the general public; or

(b) is designated as a private fund by regulations;

“professional fund” means a mutual fund which:

(a) is offered only to professional investors and the initial

investment in which, in respect of each investor, is not

less than one hundred thousand in the United States of

America currency or its equivalent in any other currency;

and

(b) is designated as a professional fund by regulations;

“professional investor” means a person:

(a) whose ordinary business involves the acquisition or

disposal of property of the same kind as the property, or

a substantial part of the property of the fund; or

(b) who has signed a declaration that he has net worth in

excess of one million dollars in the United States of

America currency or its equivalent in any other currency

and that he consents to being treated as a professional

investor;

“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 similar document the purpose of

which is to make an offer to the general public or any section thereof for

subscription or purchase of any shares issued by a mutual fund;

“public fund” means a mutual fund which:

(a) offers any shares it issues for subscription or purchase

to any member of the general public or any section

thereof; and

(b) is not a private fund or a professional fund; and

(c) is registered as a public fund under this Act;

“recognised country or jurisdiction” means any country or jurisdiction

recognised by the Minister under subsection (3) of this section;

“Registrar” means the Registrar of Mutual Funds appointed under this Act;

“regulations” or “the regulations” means regulations enacted 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 any other

evidence of indebtedness;

(b) any share, stock, document or instrument commonly

known as a security; and

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(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, or other similar entity;

“Stamp Duties Act” means the Stamp Duties Act and any statutory modi-

fications thereto;

“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 an arrangement creating a trust under the laws of Belize 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, every partnership formed,

every unit trust organised, or other similar entity existing

under the laws of Belize for the purpose of carrying on

business as a mutual fund, a manager or administrator,

shall, if carrying on business anywhere outside Belize, be

deemed to be carrying on business from within Belize;

(b) the expression “carrying on business from within Belize”

CAP. 64.

includes carrying on business outside of Belize from a

place of business or a registered office within Belize;

(c) the definition of the financial year may be such longer

period as may be agreed with the Registrar; and

(d) the minimum investment limit referred to in paragraph

(a) of the definition of “professional fund” shall not

apply in respect of an investment made by the manager

or administrator of the professional fund.

(3) The Minister may recognise any country or jurisdiction for the

purposes of this Act and shall cause an Order of such recognition to be

published in the Gazette.

PART II

Administration

3.-(1) There shall be appointed a Registrar of Mutual Funds, who shall be

appointed by the Minister responsible for the administration of this Act.

(2) The Registrar has:

(a) the duty to supervise mutual funds, managers and ad-

ministrators in accordance with this Act;

(b) in and for the discharge of that duty, the powers con-

ferred upon him by this Act;

(c) the power to prescribe such forms as he considers

necessary for the purposes of this Act or the

regulations; and

Appointments.

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(d) the authority to issue directives and policy guidelines for

the purposes of this Act or the regulations.

(3) The Registrar may, upon request by any person to whom this Act

applies and the payment of the fee set out in Part I of the Second Schedule

or such other amount as may be prescribed by regulations, issue to such

person a certificate of compliance in such form as the Registrar thinks fit.

4.-(1) The Minister may in writing delegate any powers conferred upon him

by this Act to the Registrar and thereupon this Act shall be read as if those

powers were originally conferred upon the Registrar.

(2) The Registrar may delegate any of his powers or duties under this

Act to a Deputy Registrar and thereupon this Act shall be read as if those

powers or duties were originally conferred or imposed upon that person.

5.-(1) The Registrar shall, on or before the 30th day of March in each year,

prepare and deliver to the Minister a report consisting of:

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

(i) filings made under this Act;

(ii) registrations, recognitions and licences granted

under this Act;

(iii) enforcement proceedings or disciplinary

measures taken under this Act;

(b) a general commentary on the law relating to the mutual

funds industry and on the practice and development of

that law.

Part I,

Second

Schedule.

Delegation of

power.

Annual report.

(2) On receiving the report delivered to him pursuant to subsection

(1) of this section, the Minister shall lay the report before the House of

Representatives.

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

(a) registered public funds;

(b) recognised private and professional funds; and

(c) licensed managers and administrators.

(2) The registers required under subsection (1) of this section shall

show:

(a) the information required under section 26 (1) (a), (b)

and (c) with respect to each registered public fund,

recognised private and professional fund and licensed

manager or administrator;

(b) the date of registration, recognition or licence, as the

case may be; and

(c) the status of such registration, recognition or licence if

cancelled and the date thereof.

(3) Registers kept by the Registrar shall be in such form as he may

determine and, subject to section 38, shall be open to public inspection

during ordinary office hours on payment of an inspection fee of ten dollars

or such other amount as may be prescribed by regulations.

7.-(1) There shall be a Committee called the Mutual Funds Advisory

Com-mittee which shall consist of not more than five persons appointed by

the Minister from among members of the private sector who are known to

Records of

Registrar.

Mutual Funds

Advisory

Committee.

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have adequate knowledge and experience in the mutual funds industry.

(2) The Minister shall be the Chairman of the Mutual Funds

Advisory Committee and the Registrar shall be an ex-officio member

thereof.

(3) The Mutual Funds Advisory Committee shall: -

(a) advise the Minister on any matter referred to it by the

Minister in relation to the mutual funds industry;

(b) on its own motion, report and make recommendations

to the Minister on any matter relating to mutual funds as

it sees fit; and

(c) have the power to establish its own working rules and

procedures.

PART III

Public Funds

8. No public fund shall carry on its business or manage or administer its

affairs in or from within Belize unless it is registered under this Act.

9.-(1) A public fund may apply to the Registrar for registration to carry on

business in or from within Belize.

(2) An application shall be: -

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

in First Schedule; and

(b) accompanied by:

Registration.

Application for

registration.

First Schedule.

(i) the consent of the Minister to apply for

registration;

(ii) a statement setting out the nature and scope of

the business to be carried on by the applicant in

or from within Belize, including the name of any

other country or jurisdiction where the applicant

is carrying on or intends to carry on business;

(iii) the application fee set out in Part II of the

Second Schedule or such other amount as may

be prescribed by regulations;

(iv) the instrument by which the applicant is con-

stituted or such other proof as may be satis-

factory to the Registrar that the applicant is

lawfully constituted under the laws of Belize or

of any other country or jurisdiction;

(v) the notices required under section 26; and

(vi) such other documents or information as the

Registrar may reasonably require for the

purpose of processing the application for

registration.

10.-(1) The promoters of a public fund which is proposed to be formed

may apply to the Minister for his consent to register such proposed public

fund upon being lawfully constituted under the laws of Belize or of any other

country or jurisdiction and upon complying with the requirements of this

Act.

(2) An application under subsection (1) of this section shall be:

Part II

Second Schedule.

Application for

consent to be

registered.

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(a) in the form of a letter setting out the particulars of the

proposed public fund; and

(b) accompanied by a copy of the instrument by which the

public fund will be constituted and the application fee set

out in Part II of the Second Schedule or such other

amount as may be prescribed by regulations.

(3) The consent of the Minister shall be:

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

(b) valid for a period of three months from the date it is

granted subject to there being no change, which the

Minister considers material, in any of the particulars

contained in the application for consent.

(4) The promoters of a proposed public fund may, upon the expiry

of the three month period referred to in subsection (3) (b), apply for the

renewal of the Minister’s consent subject to:

(a) supplying such documents or information as the Minister

may require; and

(b) the payment of a renewal fee which shall be the same

amount as the application fee under Part II of the

Second Schedule.

11.-(1) The Minister may, in his discretion, grant or refuse to grant his

consent under section 10.

(2) Notwithstanding subsection (1) of this section, the Minister shall

refuse to grant his consent, as the case may be, if:

Part II

Second Schedule.

Part II

Second Schedule.

Power to grant

consent.

(a) the proposed public fund has a name which is un-

desirable or misleading;

(b) the proposed public fund does not have a custodian

who is functionally independent of the manager or

administrator; or

(c) he determines that it is not in the public interest that

such consent should be granted.

(3) Except as provided in section 32, where the Minister, in the

exercise of his powers under subsection (1) of this section, makes a deci-

sion refusing to grant consent, he shall not be bound to assign any reasons

for his decision, which decision shall not be subject to appeal or review in

any court.

12.-(1) Where the Minister grants consent pursuant to section 10, he shall

direct the Registrar accordingly and the Registrar shall:

(a) register the public fund in the register maintained by him

for the purpose under section 6; and

(b) issue a certificate to the registered public fund as

directed by the Minister showing the date of

registration.

(2) Where the Minister grants his consent under section 10, the

promoters of the proposed public fund shall, within the three month period

referred to in section 10 (3) (b), from the date of the grant of such consent

or the renewal thereof, deliver to the Registrar:

(a) the consent of the Minister;

(b) satisfactory proof that the proposed public fund is law-

Registration

procedure.

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fully constituted in Belize or elsewhere;

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

and

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

(3) If the Registrar is satisfied that the proposed public fund has

complied with the requirements of subsection (2) of this section, he shall

register the public fund and issue to it a certificate of registration in accor-

dance with the procedure set out in subsection (1) of this section.

(4) The Registrar shall refuse to register the proposed public fund if

he determines that:

(a) its registration has not received the consent of the

Minister pursuant to section 10; or

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

subsection (2) of this section.

(5) Any person aggrieved by a decision of the Registrar under

subsection (4) of this section may appeal to the Minister whose decision shall

be final.

13.-(1) Every registered public fund shall:

(a) maintain adequate accounting records and prepare

financial statements in respect of each financial year in

accordance with generally accepted accounting

principles; and

(b) keep such accounting records and financial statements

available for examination by the Registrar or any person

Accounting

records and

financial state-

ments.

authorised under his hand at:

(i) its principal place of business or registered

office in Belize; or

(ii) such other place as its officers may see fit,

provided that copies of such records and

statements or such other documents or

information as the Registrar may consider

adequate are kept at its principal place of

business or registered office in Belize.

(2) The financial statements required under subsection (1) of this

section shall be:-

(a) audited by an auditor acceptable to the Registrar (in

this Act called “the approved auditor”) in accordance

with generally accepted auditing standards;

(b) accompanied by the report of the approved auditor

thereon which shall include a statement of the auditing

standards under which the statements have been

prepared; and

(c) provided to or made available for examination by all

investors in the registered public fund.

14.-(1) No registered public fund shall within or outside of Belize offer its

shares to the public unless prior to such offer it publishes in writing a pros-

pectus signed by or on behalf of the board of directors (by whatever name

called) of the fund, which approved the contents of the prospectus or

authorised its publishing, and files a copy thereof with the Registrar.

(2) Every prospectus shall:

Duty to publish

and file a

prospectus.

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(a) provide full and accurate disclosure of all such

information as investors would reasonably require and

expect to find for the purpose of making an informed

investment decision; and

(b) contain a summarised statement of investors’ rights as

provided in section 16; and

(c) be accompanied by or contain reference to the

availability of the financial statements for the last

financial year of the fund and the auditor’s report

thereon if the fund has completed a financial year in

operation.

(3) If all or any part of the prospectus is not in the English language,

the Registrar may require that an English translation of the prospectus or that

part of the prospectus, verified in a manner satisfactory to him, be filed along

with the prospectus.

(4) Where in a prospectus any of the disclosures required under

subsection (2) (a) ceases to be accurate in a material particular, the

registered public fund shall publish an amendment thereto giving accurate

disclosures and provide a copy thereof to each of its investors and to the

Registrar.

15.-(1) Every registered public fund, wherever constituted, which carries on

business outside of Belize under the laws of any other country or juris-

diction, shall every year, within three months of the end of its financial year,

file with the Registrar a certificate of compliance from the competent

authority responsible for the regulation and supervision of the conduct of its

business, in that other country or jurisdiction.

(2) A registered public fund to which subsection (1) of this section

applies is deemed to have complied with that subsection if it is proven to the

Certificate of

compliance.

satisfaction of the Registrar that the required certificate could not be

obtained for reasons beyond the control of the public fund.

(3) Where a registered public fund which carries on business out-

side of Belize carries on business in more than one country or jurisdiction,

the certificate required to be filed under subsection (1) of this section shall

be from the competent authority in or from the country or jurisdiction in or

from which the public fund carries on its principal business.

16.(1) If a registered public fund publishes a prospectus or any amendment

thereto that contains any misrepresentation relating to any of the disclosures

required under section 14 (2)(a), any person who purchases any shares

pursuant to such prospectus or amendment thereto is deemed to have relied

upon any such misrepresentation and shall have the rights provided in

subsection (2) of this section.

(2) A person referred to in subsection (1) of this section may elect

to exercise a right of action:-

(a) for the rescission of the purchase; or

(b) for damages,

jointly and severally against the fund, and every member of the board of

directors (by whatever name called) who, while aware of the misrepresen-

tation, authorised the signing of or approved the prospectus or amendment

thereto and consented to its publication and filing or caused it to be signed

and filed.

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

(a) an untrue or misleading statement of any of the

disclosures required under section 14 (2) (a); or

Investors’ rights.

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(b) an omission to disclose any such disclosures.

(4) No person is liable under this section if he proves that the pur-

chaser purchased the shares offered by the prospectus or amendment thereto

with knowledge of the misrepresentation.

(5) The right of action for rescission or for damages conferred by

subsection (2) of this section is in addition to and without derogation from

any other right the plaintiff may have at law.

17.-(1) Notwithstanding any provision of law to the contrary, any action

pursuant to section 16 (2) may not be commenced after:

(a) one year from the day that the plaintiff first had

knowledge of the misrepresentation; or

(b) one year from the date of the purchase transaction that

gave rise to the cause of action,

whichever is earlier.

(2) In any action under section 16 (2), the amount recoverable shall

not exceed the amount at which the shares were purchased or subscribed,

including any fees or other charges paid by the plaintiff.

PART IV

Private and Professional Funds

18. No private or professional fund shall, in or from within Belize, carry

on its business or manage or administer its affairs unless it is recognised under

this Act.

Limitation of

action and

amount

recoverable.

Recognition.

19.-(1) A private or professional fund that is constituted under the laws of

Belize is entitled to be recognised under this Act if it provides:-

(a) proof satisfactory to the Minister that it:

(i) is a private or professional fund within the

meaning of this Act; and

(ii) is lawfully constituted under the laws of Belize;

and

(b) the notices required under section 26,

and pays the application fee set out in Part II of the Second Schedule or

such other amount as may be prescribed by regulations.

(2) A private or professional fund that is constituted outside of

Belize may apply for recognition under this Act by sending to the Minister a

letter setting out the nature and scope of its business which shall be

accompanied by:

(a) the application fee set out in Part II of the Second

Schedule or such other amount as may be prescribed

by regulations;

(b) the notices required under section 26;

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

(i) a private or professional fund within the

meaning of this Act; and

(ii) lawfully constituted under the laws of another

country or jurisdiction.

Application for

recognition.

Part II

Second Schedule.

Part II

Second Schedule.

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(3) In the case of a professional fund, the matters required by sub-

sections (1) and (2) of this section shall be provided within fourteen days of

the fund becoming a professional fund.

20. (1) The Minister may, in his discretion, grant or refuse to grant recog-

nition under section 19 (2).

(2) Where the Minister refuses to grant recognition under section 19

(2), the provisions of section 11 (3) shall apply mutatis mutandis.

(3) The Minister shall not refuse to grant recognition under section

19 (1) unless the applicant fails to comply with the requirements of that

section.

(4) Where the Minister refuses to grant recognition under section 19

(1), he shall give the applicant notice in writing of his decision and the reasons

therefor and the applicant may appeal such decision pursuant to section 33.

21. Where the Minister grants recognition to a private or professional

fund, he shall direct the Registrar accordingly and the Registrar shall: -

(a) enter the particulars relating to the private or profes-

sional fund in the register maintained by him for the

purpose under section 6; and

(b) issue a certificate of recognition to the private or pro-

fessional fund as directed by the Minister showing the

date of recognition.

PART V

Managers and Administrators

22.-(1) No person shall, in or from within Belize, carry on or hold himself

out as carrying on business as a manager or administrator of mutual funds

Power to grant

recognition.

Registrar to

register

recognized

private and

professional

funds.

Licensing.

unless that person is licensed for the purpose under this Act.

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

(a) is not ordinarily resident or domiciled in Belize;

(b) is a manager or administrator of mutual funds (by

whatever name called) under the laws of a recognised

country or jurisdiction; and

(c) has received written permission from the Minister to

carry on business as manager or administrator of mutual

funds in or from within Belize.

23.-(1) A person who wishes to do so may make an application to the

Minister to carry on business in or from within Belize as:

(a) manager; or

(b) administrator; or

(c) both manager and administrator of mutual funds.

(2) An application shall be accompanied by:-

(a) the application fee set out in Part II of the Second

Schedule or such other amount as may be prescribed

by regulations;

(b) a statement of financial and human resources and

administrative facilities available to the applicant for the

competent and efficient conduct of its business; and

(c) such other documents or information as the Minister

Application for a

licence.

Part II

Second Schedule.

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may reasonably require for the purpose of considering

the application.

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

to any applicant.

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

applicant:

(a) is a fit and proper person to be engaged in the business

proposed; or

(b) has or has available to him adequate knowledge,

expertise, resources and facilities necessary for the

nature and scope of the business proposed; and

(c) has appointed an auditor satisfying such conditions as

may be prescribed by the Minister.

(3) Notwithstanding subsections (1) and (2) of this section, the

Minister shall refuse to grant a licence if he determines that it is not in the

public interest that a licence should be granted.

(4) Where the Minister refuses to grant a licence to an applicant, the

provisions of section 11 (3) shall apply mutatis mutandis.

(5) The Minister may by Order prescribe a Code of Practice

directing the holder of a licence under this section to comply with the re-

quirements of the Code which may include matters relating to:

(a) conduct of business;

(b) financial resources;

Power to grant a

licence.

(c) the giving of notice of specified events;

(d) advertising;

(e) clients’ money and clients’ investments; and

(f) accounting records and audit requirements.

(6) A Code of Practice prescribed under subsection (5) of this

section may provide for such enforcement mechanisms as the Minister may

consider necessary to ensure compliance with the provisions of the Code.

25. Where the Minister grants a licence to an applicant, he shall direct

the Registrar accordingly and the Registrar shall:-

(a) enter the particulars of the applicant in the register

maintained by him for the purpose under section 6; and

(b) issue a licence to the applicant, as directed by the

Minister, showing the date on which the licence is

granted.

PART VI

General

26.-(1) In addition to any other requirement under this Act, every appli-

cation for registration, recognition or a licence made under this Act shall be

accompanied by a notice of:-

(a) the address of the applicant’s principal place of busi-

ness, the address of its registered office, and its

address for service in Belize;

Licensing

procedure.

Notices to

applications.

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(b) the name and address of a person resident in Belize who

is authorised to represent the applicant and to accept

service on its behalf; and

(c) the address of any place or places of business that the

applicant may have outside of Belize.

(2) If any information contained in any of the notices required to

accompany the application pursuant to subsection (1) of this section is altered

at any time thereafter, the applicant, upon being a registered public fund, a

recognised private or professional fund or a licensed manager or adminis-

trator, as the case may be, shall give in writing to the Registrar particulars of

the alteration within twenty-one days after the alteration is made.

27.-(1) A certificate or a licence may be granted subject to such terms,

conditions, restrictions or limitations as the Minister sees fit to specify therein.

(2) A certificate or a licence shall:

(a) be in such form as may be directed by the Minister;

(b) be admitted in all courts as prima facie evidence of the

facts stated therein; and

(c) remain in force until it is cancelled.

28.-(1) Where:-

(a) a public fund is granted registration;

(b) a private or professional fund is granted recognition; or

(c) a person is granted a licence,

Form and

conditions of

certificates and

licences.

Annual fees.

there shall be payable for the year in which such registration, recognition or

licence is granted the fees set out in paragraph (A) of Part III of the Second

Schedule, or such other amounts as may be prescribed by regulations.

(2) On or before the 31st day of January of each year following the

year in which registration, recognition or a licence is granted, there shall be

pay-able the annual fees set out in paragraph (B) of Part III of the Second

Schedule or such other amounts as may be prescribed by regulations.

(3) Any unpaid annual fee or part thereof may be sued for by the

Registrar by action as a civil debt and the Registrar may require, and the

court may order, the payment of a penalty in an amount equal to the amount

of the fee or part thereof for late payment of the fee.

29. The Minister may, subject to sections 30 and 31, cancel a certificate

or licence, or impose new or additional conditions, restrictions or limitations

in respect of such certificate or licence:

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

(b) in the event that the holder thereof:

(i) has ceased to carry on business in or from

within Belize;

(ii) has contravened any provision of this Act, the

regulations or the Code of Practice prescribed

under section 24 or any term, condition, res-

triction or limitation attached to the holder’s

certificate or licence, as the case may be;

(iii) has been convicted of an offence under this Act

or a criminal offence in any country or

jurisdiction;

Paragraph (A)

Part III

Second Schedule.

Paragraph (B)

Part III

Second Schedule.

Cancellation, etc.,

of certificates or

licences.

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(iv) has knowingly and wilfully supplied false,

misleading or inaccurate information or failed to

disclose information required for the purposes of

any provision of this Act or the regulations;

(v) is carrying on business in a manner detrimental to

the interests of mutual funds investors or to the

public interest; or

(vi) is declared bankrupt or is being wound up or

otherwise dissolved.

30.-(1) Before cancelling a certificate or a licence under paragraph (b) of

section 29, the Minister shall:

(a) give the holder thereof notice in writing of the grounds

on which he intends to do so;

(b) afford the holder an opportunity to make written

representations to him within a period of thirty days after

receipt of a notice under paragraph (a) of this

subsection; and

(c) take any such representations made by the holder into

consideration.

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

Minister decides to cancel a certificate or a licence, as the case may be, he

shall give notice in writing to the holder thereof of such cancellation and the

reasons therefor.

31. The holder of a certificate or a licence aggrieved by the decision

cancelling such certificate or licence may appeal such a decision in

accordance with section 33.

Cancellation

procedure.

Right of appeal.

32. Notwithstanding any provision in this Act to the contrary, where the

Minister refuses to grant consent to an existing entity under section 11 (1),

or to issue a licence to such an entity under section 9 (1), or to grant recog-

nition to such an entity under section 19 (1), he shall give notice in writing of

his decision and the reasons therefor and the existing entity may appeal such

decision in accordance with section 33 below.

33.-(1) An appeal under sections 20 (4), 31 and 32 above shall be made

by:-

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

(b) serving the Minister with a notice of appeal within

twenty-one days or such longer periods as the Judge

may allow, after receipt of the notices required under

section 20 (4), 30 (2) or 32, as the case may be.

(2) The bringing of an appeal under sections 31 and 32 suspends

the decision appealed against, pending the determination or abandonment of

the appeal.

34. The Registrar shall publish in the Gazette, in such form as he thinks

fit, notice of every grant or cancellation of a certificate or a licence under this

Act.

35.-(1) Upon the recommendation of the Registrar, the Minister may, if he

is satisfied that to do so would not be prejudicial to the public interest, direct

that all or any of the provisions of this Act or the regulations shall:

(a) not apply; or

(b) apply subject to such modification as he may specify in

the direction,

Appeal by

existing entities.

Appeal

procedure.

Grant or cancel-

lation to be

published.

Power to grant

exemptions.

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to any person or any class of persons.

(2) A direction under this section may be:

(a) subject to any conditions as the Minister may see fit to

specify therein; and

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

(3) Notwithstanding any provision or rule of law, a direction under this

section is not a statutory instrument having legislative effect.

36. For the purpose of discharging his duties under this Act and the

regulations and subject to section 38, the Registrar, or any person acting

under his authority, may at all reasonable times in writing, direct any person to

whom this Act applies to:

(a) furnish information; or

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

documents,

relating to the business of that person being carried on under this Act which,

in the opinion of the Registrar, is necessary to enable him to ascertain com-

pliance with the provisions of this Act or the regulations.

37.-(1) No liability shall be incurred by and no suit, action or proceeding

shall be brought against the Government of Belize, the Minister, any agent

thereof, the Registrar or any person acting under his authority for any act

done or omitted to be done in good faith:

(a) in the performance or intended performance of any

function or duty; or

Access to

information and

records.

Immunity of

action by

Registrar.

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

under this Act or the regulations.

(2) The Registrar may bring actions and institute proceedings in his

name or office for the enforcement of any provision of this Act or the regu-

lations, or for the recovery of fees or other sums of money payable under

this Act or the regulations.

38. Notwithstanding section 6:-

(a) any information, material or document furnished to or

filed with the Registrar by any recognised private or

professional fund is privileged and shall not be

disclosed to any person except: -

(i) the Minister, or a public officer authorised by

the Minister; or

(ii) on the order of the Court for the purpose of

criminal proceedings;

(b) the Minister may direct that any specified information,

material or document furnished to or filed with the

Registrar by any registered public fund shall be held in

confidence and shall not be disclosed to any person so

long as the Minister is of the opinion that to do so is in

the public interest.

39.-(1) Notwithstanding any statutory provision or rule of law to the

contrary:-

(a) a public fund which is registered or a private or profes-

sional fund which is recognised under this Act; and

Confidentiality.

Funds exempt

from income and

business tax,

stamp duties, etc.

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(b) an investor in any registered public fund or recognised

private or professional fund who is not a resident in

Belize;

are in all respects exempt from any and all of the provisions of the Income

and Business Tax Act, the Stamp Duties Act and the Exchange Control

Regulation Act with respect to its investment in any such fund.

(2) Notwithstanding the provisions of the Companies Act, a com-

pany which is incorporated outside Belize which establishes a place of

business within Belize to carry on business in accordance with the provisions

of this Act as:

(a) a registered public fund; or

(b) a recognised private or professional fund; or

(c) a licensed manager or administrator;

is exempt from the provisions of that Act.

40.-(1) Any person who:

(a) wilfully makes a misrepresentation in any document

required to be filed, furnished or delivered under this

Act or the regulations, as the case may be; or

(b) wilfully makes any statement or gives any information for

the purposes of this Act or the regulations that he knows

to be false or misleading; or

(c) knowingly fails to disclose any fact or information

required to be disclosed for the purposes of this Act or

the regulations; or

CAP. 55.

CAP. 64.

CAP. 52.

CAP. 250.

Offences and

penalties.

(d) being in charge of or having possession of or control

over any information, records, books or other docu-

ments referred to in section 36, refuses or wilfully

neglects to comply with any lawful direction given

under that section,

commits an offence under this Act and is liable on conviction to a fine of not

less than five thousand dollars and not more than fifty thousand dollars or to

imprisonment for a period not exceeding two years, or to both such fine and

period of imprisonment.

(2) Any person who, without reasonable cause, contravenes any

provision of this Act or the regulations for which no penalty is provided,

commits an offence against this Act, and is liable on conviction:-

(a) in the case of a body corporate or unincorporated, to a

fine of not more than fifty thousand dollars; and

(b) in the case of an individual, to a fine of not more than

five thousand dollars or to imprisonment for a period

not exceeding one month, or to both such fine and

period of imprisonment.

(3) A prosecution for an offence under this Act may be com-

menced within five years from the date of the commission of the offence but

not thereafter.

41. The Minister may by Order published in the Gazette:

(a) vary the form of First Schedule provided such variation

does not, in any material respect, change the substance

of that Schedule; or

(b) subject to the affirmative resolution procedure of the

Minister’s power

to vary

Schedules.

First Schedule.

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Mutual Funds [CAP. 268

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House of Representatives modify, delete, repeal or

replace any Schedule to this Act in whole or in part.

42. The Minister may make regulations:

(a) prescribing the fees payable under this Act;

(b) prescribing the criteria with respect to exemptions

authorised by this Act;

(c) recognising arrangements which are not mutual funds;

(d) designating mutual funds or a class or classes thereof as

private or professional mutual funds;

(e) designating a class or sub-classes of a public fund;

(f) authorising the Registrar to require that any document,

statement, report, certificate, release, agreement, or

other information be filed with, furnished or delivered to

him;

(g) defining, for the purposes of this Act, terms or

expressions used in this Act that are not defined in this

Act;

(h) prescribing any matter required to be or which may be

prescribed under this Act relating to:

(i) the constitution, powers and duties of the

manager, administrator and custodian;

(ii) the issue and redemption of units;

Regulations.

(iii) the appointment, removal, and powers and

duties of auditors;

(iv) the restriction or regulation of investment and

borrowing powers;

(v) the preparation of periodical reports;

(vi) the rights of investors; and

(vii) the contents of constitutional documents, in

respect of a public fund or a sub-class of such

fund;

(i) relating to the matters which should be contained in a

prospectus of a public fund or a sub-class of such fund;

and

(j) generally for the better administration of this Act and

for carrying the intent and purpose of its provisions into

effect.

43. Any person who, at the date of the coming into force of this Act, is

carrying on any business or engaged in any activity relating in any respect,

directly or indirectly to mutual funds in or from within Belize, shall within

three months or such longer period as may be granted by the Minister from

such date of coming into force, comply with the provisions of this Act.

__________

Transitional

provision.

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FIRST SCHEDULE

[Sections 9 (2) (a) and 41 (a)]

Application for Registration of a Public Fund

1. Applicant: State name and address of the fund.

2. Constitution:

(a) State the legal form of the fund:-

(i) company; or

(ii) partnership; or

(iii) unit trust;

(b) State the name of the country or jurisdiction where the

fund is constituted;

(c) State the title of the law under which the fund is

constituted.

3. Officers:

(a) State name, address, place of birth and citizenship of

each of the following officers of the fund:

(i) directors;

(ii) general partners; or

(iii) trustees;

(b) State educational and professional qualifications of

each of the officers mentioned in sub-paragraph (a)

above;

(c) Give details of business, occupation or employment of

each of the officers mentioned in sub-paragraph (a)

above.

4. References:

Give two personal references, a bank reference and, where it is the

practice to make one available in the relevant jurisdiction, a police

clearance certificate for each of the officers mentioned in paragraph

3 (a) above.

5. Functionaries: State names, addresses and business activities of

each of the fund’s:

(a) managers;

(b) administrators;

(c) investment advisers; and

(d) custodians.

6. Prior Registration:

State if the fund is now or has been registered, licensed, recognised

or authorised under any law or regulations relating to mutual funds,

collective investment schemes/funds or securities in any other

country or jurisdiction.

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7. Refusal or Disciplinary Measure:

Has the fund, any of its officers mentioned in paragraph 3 (a),

managers, administrators, investment advisers or custodian been the

subject of:-

(a) a refusal of an application for registration, licence,

recognition or authorisation; or

(b) a suspension, cancellation or revocation of registration,

licence, recognition or authorisation,

by any authority in any country or jurisdiction?

Give details and reasons.

8. Civil Proceedings:

Has a judgment been rendered or any suit, action or proceedings

pending against any officer of the fund or any of its functionaries

listed in paragraph 5 above, in civil proceedings in any court or

tribunal in any country or jurisdiction which has been or is based in

whole or in part on fraud, theft, deceit, misrepresentation or similar

conduct?

9. Offences:

Has any of the officers mentioned in paragraph 3 (a) above or any

of the functionaries listed in paragraph 5 above been or is being

charged, indicted or convicted in any country or jurisdiction for an

offence in any criminal or civil proceedings relating to fraud or theft

arising out of dealing in mutual funds, collective investment schemes/

funds or securities?

10. Bankruptcy:

Has any of the officers mentioned in paragraph 3 (a) above or any

of the functionaries listed in paragraph 5 above been:

(a) declared bankrupt or been party to bankruptcy or

insolvency proceedings; or

(b) subject to proceedings relating to winding-up,

dissolution or creditors’ arrangement; or

(c) subject to proceedings relating to receivership or

creditor’s compromise,

in any country or jurisdiction?

________

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AFFIDAVIT

I, ........................................................................................................ of

............................................................................................... (address),

in my capacity as director/general partner/trustee,* acting for and on

behalf of ................................................................................................

the applicant public mutual fund herein, do depose and say that I have read

and understood the questions in the application submitted herewith and

hereby certify under oath that the answers and statements provided in

respect of the application are true, correct and complete to the best of

my knowledge, information and belief.

SWORN before me

Name and signature

of deponent

............................................................

Commissioner of Oaths

Justice of the Peace

............................................................

in the city of ...................................this

............................................................

..................... day of ........................, .

* Delete as appropriate.

SECOND SCHEDULE

[Sections 3 (3), 9(2)(b)(iii), 10(2)(b) and (4)(b),

19(1) (b) and (2)(a), 23(2)(a), 28(1) and (2)]

FEES

PART I

Fee for issuing a Certificate of Compliance under section 3(3)

The fee for issuing a Certificate of

Compliance pursuant to section 3 (3) is ............................... $25.00

PART II

Application fees under sections 9(2)(b)(iii), 10(2)(b), 19(1) and (2)(a),

23(2)(a)

The fee for:

(a) an application for registration

under section 9 (2) (b) (iii) is ..................... $500.00

(b) an application for recognition under

sections 19 (1) and (2) is ....................... $350.00

(c) an application for a licence under

section 23 (2) (a) is .............................. $250.00

(d) an application for consent to be

registered under section 10 is ................ $100.00

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PART III

Annual fees under section 28 (1) and (2)

(A) Fee payable for the year in which registration, recognition or

licence is granted pursuant to section 28 (1):

(1) Where registration, recognition or licence is granted on or

before the 30th day of June in any year, the fee payable for

that year is:

(a) $500.00 by a registered public fund;

(b) $350.00 by a recognised private or professional

fund;

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

administrator; and

(d) $1,000.00 by a person licensed as both manager

and administrator.

(2) Where registration, recognition or licence is granted on or

after the 1st day of July in any year, the fee payable for that

year is:

(a) $250.00 by a registered public fund;

(b) $175.00 by a recognised private or professional

fund;

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

administrator; and

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

and administrator.

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

(a) $500.00 by a registered public fund;

(b) $350.00 by a registered or recognised private

or professional fund;

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

administrator; and

(d) $1,000.00 by a person licensed as both

manager and administrator.

____________

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