Brunei: Law of Offshore
Mutual Fund Law
This page was last updated on 3 June 2019.
The Mutual Funds Order, 2001 (MFO) applies to domestic and international funds and their promoters/managers/custodians. Provision is made for public funds, private funds and professional funds. Islamic funds are provided for; they are defined as funds which do not go against Islamic law. A Sharia (locally known as Syariah) Council must be appointed in respect of an Islamic fund. Mutual funds may be in the form of a body corporate, a unit trust, a limited partnership or other arrangement whereby participants (investors) may benefit from the pooling of funds, diversification and the spreading of risk. No bearer shares may be issued without the specific consent of the minister.
The MFO provides 'for the regulation of mutual funds in Brunei, the supervision and licensing of such funds and of persons promoting and providing services in connection therewith and for other matters relating to mutual funds'.
No mutual fund may be established, domiciled, offered to the public, traded listed, managed or administered from within Brunei unless it holds the appropriate licence or permission issued by the Authority.
Managers, administrators, custodians and trustees (together referred to as ‘operators’) are required to be appropriately licensed or permitted. Trust companies licensed under the Registered Agents and Licensed Trustees Order, 2000 (RATLO) and appropriately licensed banks (domestic or international) are permitted operators.
Applications for licences are made to the authority in the manner required, with full disclosure to the Authority of particulars of participants. In the case of an Islamic fund, an appropriate Sharia council must be appointed.
A person cannot be both (i) a manager and (ii) a trustee or custodian of the same fund. Provisional licensing is accommodated on terms permitted by the authority, which may also impose conditions on the terms of licensing of both funds and operators.