Review Of The Mutual Funds Legislation Of Belize

First published in the Morgan & Morgan newsletter, the IBC Review

As previously reviewed in this publication, the Mutual Funds Act has the stated intention to provide for the regulation, authorization and control of mutual funds, their managers and administrators carrying on business in or from within Belize. In furtherance, this article provides an in-depth review of the three types of Mutual Funds and their requirements. Also discussed is the creation of a sub-class of Public Funds and the appointment of a Registrar.

The Act encompasses the regulation of three types of Mutual Funds. These are:

Public Funds

Private Funds

Professional Funds

A "Public Fund" is defined as one, which offers its shares for subscription or purchase to members of the public. The definition of a "Private Fund" is a mutual fund which has less than fifty investors and the constitutional documents of which prohibits the offering of its shares to the general public. A "Professional Fund" is one which is offered only to professional investors and the initial investment in which, in respect of each investor, is not less than $100,000.00 in the United States currency or the equivalent in any other currency and is designated as a professional fund by regulations.

The Mutual Funds Regulations enacted in 2000 creates a sub-class of Public Funds, described as "a selective public fund" where all interest in the public fund are offered by a person entitled to provide investment services under the Laws of Belize or a recognized country or jurisdiction.

The Act and Regulations set out very strict requirements for the operation of mutual funds and the criteria for qualification of administrators and managers.

Firstly, all Mutual Funds carrying on its business managing or administering its affairs in or from Belize must be registered under the Act.

Likewise, a manager or administrator of mutual funds must obtain a license for conducting such business in Belize unless they are not resident or domiciled in Belize or operate from another jurisdiction and have received the written permission from the Minister to conduct such business.

The requirements for the establishment of Mutual Funds is differentiated between on the one hand Public Funds and on the other Private and Professional Funds. In respect of Public Funds a standard application form must be filled out and documents provided which set out the nature and scope of the business, proof that the applicant is lawfully...