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Turks and Caicos: Offshore Business Sectors

Investment and Fund Management

Collective investment schemes may be created either by incorporating a mutual fund company or by establishing a unit trust. Although historically mutual funds and open ended investment companies have been governed by the Companies Ordinance 1981, in December 1998 new Mutual Funds legislation was approved and implemented.

Application for registration must be made to the Financial Services Commission. Unless the fund falls within an exempted category it must be licensed and registered. In granting a licence emphasis is placed on the credentials of the promoters and their expertise in the proposed investment area. All funds are subject to ongoing monitoring of their activities. The new legislation provides for the appointment of licensed administrators who will oversee the conduct of the fund in the interests of the investors.

The Islands' mutual funds regime provides for four types of fund:

  • Registered mutual funds constituted under TCI law which are authorized to issue equity interests only to investors who meet prescribed qualifications or in which equity interests are listed on a stock exchange recognized by the TCI authorities for this purpose.
  • Recognized mutual funds constituted outside the TCI whose equity interest are listed on an approved exchange.
  • Licensed mutual funds, a category for funds which fall outside the registered and recognized headings, but are otherwise approved.
  • Exempt mutual funds in which the equity interests are held by not more than fifteen investors the majority of whom are capable of appointing or removing the operator of the fund, or funds that are authorized to issue equity interests only to professional investors (as defined).

A TCI fund can be structured as a company, a partnership (limited or otherwise) or as a unit trust.

The Investment Dealers Licensing Ordinance came into effect in 2003 and provides for the regulation, licensing and supervision of securities brokers, asset managers and investment advisors. It includes a requirement that a licensee must maintain minimum capital in liquid assets within the TCI, which at the time of implementation, amounted to the higher of USD250,000 or 2.5% of funds under management.

 

 

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