Changes to the Mutual Funds Law – section 4(4)
("exempted") Funds
The Mutual Funds Law applies to funds that issue equity
interests that are redeemable at the option of the investor
("open-ended" funds). Most open-ended
funds are subject to regulation by the Monetary Authority
(regulated open-ended funds are referred to here and in the Mutual
Funds Law as "Regulated Mutual
Funds").
Until now, section 4(4) of the Mutual Funds Law has provided an
exemption from regulation for open-ended funds that are limited to
a maximum of 15 investors where a majority (in number) of those
investors had the power to appoint or replace the fund's
directors, general partner or trustee (as applicable) (the
"Operator"). Following a recent
amendment to the Mutual Funds Law, funds in this category
("4(4) Funds") will become Regulated
Mutual Funds. The change will apply to existing 4(4) Funds from 7
August 2020 and to new 4(4) Funds with immediate effect.
