THE INTERNATIONAL MUTUAL FUNDS ACT 2008
The long title of the Act provides for the licensing and supervision of International Mutual Funds, Collective Investments Schemes and for managers and administrators.
Regulatory Authority for Mutual Funds
The Registrar of International Mutual Funds ho is appointed by the Samoan International Finance Authority (SIFA) is expressly given the mandate to supervise and regulate mutual funds. Other responsibilities of the Registrar include maintaining a general review of the fund industry and applicable know your customer and anti money laundering policies and procedures.
Types of Mutual Funds
The act provides for 3 types of mutual funds that are namely public, private and professional.
- A public fund defined as an international mutual fund which is neither a private or professional fund is compelled to undergo a registration procedure similar to the licensing of international banks and insurance companies.
- A private mutual fund is defined as one whose shares are not offered to the general public but to specified persons or by reason of a private or business connection between the promoter and investor with no minimum investment amount or are held by not more than 250 investors with a minimum investment of USD$25,000 for each investor or is designated as a private fund by regulators.
- A professional fund is one in which shares are made available only to professional investors and initial investment in which in respect of which the majority of each investor is not less than USD$100,000 or equivalent provided the said minimum investment must not apply to any investment made by the manager, administrator promoter or underwriter of the professional fund.
Entities Allowed for Establishment of Mutual Funds
A mutual fund can be established as an international company, a partnership, a unit trust or other similar body formed or organised under the other international financial services legislation.
Regulation and Supervision of Mutual Funds
The Act allows an appropriate level of regulation to respective categories of funds. For private funds, there is no audit or prospectus requirement and an applicant undergoes a process of recognition which is simplified in comparison with the registration procedure applicable to public funds. In making application for registration as a public fund an applicant must inter alia provide supporting documentation of its constitution, verification that the laws of the jurisdiction in which it is constituted has been complied with, nature and scope of the business to be conducted, confirmation that promoters are fit and proper and that the business will be conducted in a proper manner.
A registered public fund is required to maintain adequate records and prepare financial statements for each financial year. Its financial statements prepared in accordance with generally accepted auditing standards must be audited, made available for all its investors and filed with the Registrar within 6 months of its financial year end. It is also duty bound to publish and file a copy of the prospectus that is duly signed by or on behalf of the Board of Directors with the Registrar.
Management and Administration of Mutual Funds
A person carrying on business as a manager or administrator or both of a mutual fund must be licensed under the Act.
The Registrar is prohibited from granting a license to a Manager or Administrator or both of a mutual fund unless he is satisfied the applicant is a fit and proper person. To decide whether a person is fit and proper, regard must be had to all circumstances including that person integrity, competence and financial soundness.
The licensed fund manager and or administrator must seek prior written approval of the Registrar for approval of its directors or other key persons and for issue or transfer of any of its shares or other securities except where shares or other securities are issued to existing shareholders on a pro rata bases that would not result in a change of its beneficial ownership. Every licensed fund manager and or administrator must keep adequate accounting records, and prepare financial statements for each financial year as per generally accepted accounting principles.
It must also keep accounting records and financial statements available for examination by the Registrar at its place of business or registered office in Samoa or other place deemed fit by its officers. The licensed fund manager and or administrator must also file its audited accounts with the Registrar within 6 months of financial year end.
Basic Filing Requirements with all Applications
Every application for registration, recognition under the Act or a license must be accompanied by a notice of the address of the applicants place of business and address for service, name and address of a person resident in Samoa authorised to represent the applicant and accept due process of service, and the address of any place of business that the applicant has outside Samoa.
A licensee must notify the Registrar in writing of any material change in the particulars set out in the application of registration, recognition or license or in the supporting documents to the applications.