RETAIL INVESTOR AIFS WHICH INVEST MORE THAN 30% OF NET ASSETS IN ANOTHER INVESTMENT FUND

  1. The Central Bank may impose conditions on, or may object to, the inclusion of a particular underlying investment fund.
  2. The consideration of whether a Category 2 investment fund complies in “all material respects” with the provisions of the AIF Rulebook in respect of Retail Investor AIF should include, inter alia, consideration of the following:
    • supervision by the regulatory authority of the investment fund;
    • the existence of an independent depositary with similar duties and responsibilities in relation to both safe-keeping and supervision;
    • requirements for the spreading of investment risk including concentration limits, ownership restrictions, leverage and borrowing restrictions, etc.;
    • availability of pricing information and reporting requirements;
    • redemption facilities and frequency; and
    • restrictions in relation to dealings by related parties.
  3. The Central Bank’s assessment of a Category 2 investment fund will take into account the totality of the investment fund's arrangements. For example, the fact that the underlying investment fund does not have identical investment rules will not necessarily rule out the underlying investment fund as a permitted investment. Also the Central Bank will not require that a list of regulated markets be included in the prospectus.
  4. The Central Bank will consider jurisdictions and types of investment fund other than those listed in the ‘Category 2 investment fund’ definition on the basis of submissions made for that purpose. Such submissions must be detailed and comprehensive and should contain supporting documentation from the jurisdiction in question.

Issued: 3 July 2013
Latest revision: 19 July 2013