MUTUAL FUNDS

ST. LUCIAN MUTUAL FUNDS

The St. Lucia International Mutual Funds Act allows for the establishment of two types of mutual funds: Public and Private. Public Mutual Funds are required to be licensed and may be IBC's or Unit Trusts. The fund must have a registered office or a Registered Agent licensed under the Registered Agent and Trustee Licensing Act and an Administrator in St. Lucia. Public Mutual Funds must file an offering document, unless exempted by the Minister.

Conversely, Private Mutual Funds, described for the purposes of the Act as an investment club of not more than one hundred persons, each of whom makes an investment of not less than US$ 50,000.00 into the fund, are not required to have a licensed Administrator, although they must be registered with the Director of Financial Services.

The Main Features of The International Mutual Funds Act are as follows:

1. A Mutual Fund is deemed to be carrying out business in St. Lucia if it is incorporated in St. Lucia, or if its management or administration is carried out in St. Lucia.
   
   
2. The Administrator is under a duty to ensure that any licencee, which it administers, complies with the requirements of the Act, and is promoted by persons of sound reputation.
   
   
3. Any action brought for the rescission of the purchase or for damages must be brought within 180 days from the date of knowledge of the mis-representation by the applicant, or one year from the date of the purchase transaction that gave rise to the cause of action, whichever is earlier.
   
   
4. All Administrators must be licensed under the Act with either a general licence or a restricted licence to administer only specified funds.
   
   
5. The Administrator must be an IBC, and must at all times have not less than two directors (natural persons) one of whom must be a resident.
   
   
6. Administrators and Mutual Funds must file audited accounts with the Minister.
   
   
7. Auditors of Mutual funds are under a duty to disclose to the Director, their knowledge or belief of:
   

   • The licensee's inability to meet its obligations as they fall due
   • The business being wound up or carried on in a manner that is prejudicial to investors
   • The carrying on of business without sufficient records to facilitate an audit.
   

8. The Minister and Director are responsible for the regulation of all licencees
   
   
9. There is no taxation of any kind on Mutual Funds or administrators (unless as IBC's they elect to pay 1% tax).
   

FINCOS can act as the Resident Agent for any Mutual Fund set up under St. Lucia law in addition to attending to the full licensing process. FINCOS is also pleased to make recommendations as to an Administrator of the Mutual Fund once established.