Revised Laws of Saint Lucia (2021)

Schedule

EASTERN CARIBBEAN SECURITIES REGULATORY COMMISSION AGREEMENT

ARRANGEMENT OF ARTICLES

PART I
PRELIMINARY

Articles

PART II
ESTABLISHMENT, PURPOSES, POWERS AND DUTIES OF THE COMMISSION

PART III
MEMBERS OF THE COMMISSION

PART IV
FINANCIAL MATTERS

PART V
MISCELLANEOUS

AGREEMENT ESTABLISHING

THE
EASTERN CARIBBEAN SECURITIES
REGULATORY COMMISSION

PREAMBLE

An Agreement made on the 24th day of November, 2000 between the Governments of Anguilla, Antigua and Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, Saint Christopher and Nevis, Saint Lucia and Saint Vincent and the Grenadines (hereinafter referred to as “the Participating Governments”).

WHEREAS it is desired to promote the development of and to provide for the regulation of a regional securities market in the territories of the Participating Governments and to establish the Eastern Caribbean Securities Regulatory Commission (ECSRC) as an independent and autonomous regional regulatory body.

IT IS HEREBY AGREED as follows:

PART I
PRELIMINARY

Article 1
Title

This Agreement may be cited as the Eastern Caribbean Securities Regulatory Commission Agreement, 2000.

Article 2
Interpretation

In this Agreement—

“the Act” means any Act governing securities;

“Central Bank” means the Eastern Caribbean Central Bank established under the Eastern Caribbean Central Bank Agreement, 1983;

“Eastern Caribbean Central Bank Agreement, 1983” means the Agreement establishing the Eastern Caribbean Central Bank done at Port-of-Spain on the 5th day of July1983;

“Commission” means the Eastern Caribbean Securities Regulatory Commission (ECSRC) established under Article 3;

“Commissioner” means a member of the Commission;

“licensee” means a person licensed under the Act;

“Monetary Council” means the Monetary Council established under Article 7 of the Eastern Caribbean Central Bank Agreement, 1983;

“Member territory” means a territory of a Participating Government;

“Participating Government” means a Government which is a party to this Agreement;

PART II
ESTABLISHMENT, PURPOSES, POWERS AND DUTIES OF THE COMMISSION

Article 3
Establishment of Commission

1.  

   (1)   There is hereby established a body to be known as the Eastern Caribbean Securities Regulatory Commission (ECSRC) which shall be a body corporate having perpetual succession.

1.  

   (2)   The establishment of the Commission shall take effect in accordance with the provisions of Article 38.

Article 4
Purposes of the Commission

The purposes of the Commission are—

1.  

   (a)     to license any person engaged in securities business and to monitor and supervise the conduct of such business by a licensee;

1.  

   (b)     to promote investor protection through promotion of the highest standards of professional and other activities within the securities market;

1.  

   (c)     to maintain effective compliance and enforcement programmes supported by adequate statutory powers;

1.  

   (d)     to promote the growth and development of the capital markets.

Article 5
Powers of the Commission

For the attainment of its purposes the Commission may—

1.  

   (a)     acquire and dispose of property of any description,

1.  

   (b)     make contracts or enter into other agreements,

1.  

   (c)     receive and expend money,

1.  

   (d)     grant licences in accordance with the Act,

1.  

   (e)     require the payment of fees,

1.  

   (f)     do all such other things as are required or incidental to the attainment of its purposes.

Article 6
Duties of the Commission

The duties of the Commission are to—

1.  

   (a)     take all reasonable steps to ensure that any Act to govern securities and any rules or regulations made under such an Act are complied with;

1.  

   (b)     license, supervise and regulate the activities of securities exchanges, clearing agencies, securities depositories, securities registries and self regulatory organisations;

1.  

   (c)     license, supervise and regulate collective investment schemes;

1.  

   (d)     license and regulate self-regulatory organisations;

1.  

   (e)     set standards of competence for licensees whether by way of examination or otherwise;

1.  

   (f)     approve the rules of securities exchanges, clearing agencies, securities depositories, securities registries and self-regulatory organisations;

1.  

   (g)     monitor and enforce rules for the conduct of business of licensees including suspension and revocation of licences in accordance with the Act;

1.  

   (h)     promote and encourage high standards of investor protection and integrity among licensees, and to encourage the promulgation by licensees of balanced and informed advice to their customers and to the public generally;

1.  

   (i)     support the operation of an orderly, fair and properly informed securities market;

1.  

   (j)     regulate the manner of trading and the range of securities traded on securities exchanges;

1.  

   (k)     take all reasonable steps to safeguard and protect the interests of investors in securities and to suppress illegal, dishonourable and improper practices in dealings in securities and in providing advice or other services relating to securities;

1.  

   (l)     co-operate with and assist other regulatory authorities that are concerned with securities or with operations of companies;

1.  

   (m)     exercise and perform such other duties as may be conferred or imposed upon it.

Article 7
Place of office and establishment of agencies

1.  

   (1)   The Commission shall have its principal office in one of the Member territories as the Council may by majority vote determine.

1.  

   (2)   The Commission may establish agencies and may appoint agents in any Member territory and elsewhere.

Article 8
Address and service of documents

1.  

   (1)   The Commission shall at all times have a fixed address in one of the Member territories for the service of documents on the Commission.

1.  

   (2)   All documents to be served on the Commission may be served by leaving the same at or by sending the same by registered post to the Commission at its fixed address.

1.  

   (3)   The address for service of documents on the Commission shall be published in the Official Gazette of the Member territories.

Article 9
Protection of persons dealing with the Commission and its agents

1.  

   (1)   A person who deals with the Commission shall not be affected by any irregularity of procedure in connection with the authorisation of the transaction by a meeting of the Commission or by the non-fulfillment of any condition imposed by this Agreement in connection with the transaction.

1.  

   (2)   A person who deals with another person who is held out by the Commission as having authority to act on the Commission's behalf in connection with any transaction may treat the Commission as bound by the acts of that other person done within the apparent authority of that person even though that person has not been authorised by the Commission to do those acts on its behalf so long as that person has no knowledge whether actual or constructive, that that other person has not been so authorised by the Commission.

Article 10
Custody and use of Common Seal

1.  

   (1)   The Commission shall have a Common Seal.

1.  

   (2)   The Commission shall provide for the safe custody of the Common Seal of the Commission.

1.  

   (3)   The Common Seal of the Commission shall be affixed to instruments pursuant to a resolution of the Commission and by and in the presence of—

   1.  

      (a)     the Chairperson or, in the absence of the Chairperson, the Deputy Chairperson, and

   1.  

      (b)     one other Commissioner or the Secretary.

1.  

   (4)   All documents made by the Commission other than those required by law to be under Seal and all decisions of the Commission may be signified under the hand of the Chairperson, the Deputy Chairperson or the Secretary.

Article 11
Official Seal

1.  

   (1)   The Commission shall have an Official Seal, which shall be a facsimile of its Common Seal, for use in any Member territory other than where the principal office of the Commission is situated, with the addition on its face of the name of every Member territory where it is to be used.

1.  

   (2)   The Official Seal when duly affixed to a document has the same effect as the Common Seal of the Commission.

1.  

   (3)   The Commission may by writing under its Common Seal, authorise any person appointed for the purpose in a Member territory to affix the Official Seal to any deed or other document to which the Commission is a party in the Member territory.

1.  

   (4)   The person affixing the Official Seal shall certify in writing the date on which and the place at which it is affixed.

PART III
MEMBERS OF THE COMMISSION

Article 12
Composition of Commission

1.  

   (1)   The Commission shall consist of five (5) Commissioners who shall be appointed by the Monetary Council by majority vote.

1.  

   (2)   The appointments made under this article shall comprise the following:

   1.  

      (a)     two (2) Commissioners from persons nominated by the Member territories.

   1.  

      (b)     two (2) Commissioners from persons nominated by the Chambers of Industry and Commerce, the Institutes of Chartered Accountants and the Bar Associations or from such other relevant professional bodies of the Member territories; and

   1.  

      (c)     one (1) Commissioner nominated by the Central Bank.

1.  

   (3)   Persons nominated as Commissioners shall be persons of recognised standing and experience in securities and related matters or in any one of the following areas:

   1.  

      (a)     law;

   1.  

      (b)     accountancy;

   1.  

      (c)     banking;

   1.  

      (d)     economics;

   1.  

      (e)     commerce and industry; or

   1.  

      (f)     finance.

1.  

   (4)   The Commissioners shall be paid such remuneration as may be determined by the Monetary Council.

Article 13
Chairperson, Deputy Chairperson and Secretary

1.  

   (1)   Two of the members of the Commission shall, in and by the terms of their respective appointments by the Monetary Council, be appointed as the Chairperson and Deputy Chairperson of the Commission.

1.  

   (2)   The Commission shall appoint a suitable person to serve as Secretary to the Commission.

Article 14
Appointment of Commissioners to be notified in the Gazette

The appointment of all Commissioners including the Chairperson, Deputy Chairperson and the termination of any such appointment shall be published in the Official Gazette of the Member territories.

Article 15
Terms of Office of Chairperson, Deputy Chairperson and other Commissioners

1.  

   (1)   The Chairperson of the Commission shall hold office for a period of 5 years from the date of appointment as a Commissioner.

1.  

   (2)   The Deputy Chairperson of the Commission shall hold office for the period as specified in the instrument of appointment.

1.  

   (3)   A Commissioner (other than the Chairperson and the Deputy Chairperson) shall, subject to this Article, hold office for a period of 3 years from the date of appointment as Commissioner: Except that such a Commissioner may be appointed for a period of less than 3 years so as to assist in providing continuity of experience as a Commissioner.

1.  

   (4)   Upon the expiry of the period of appointment a Commissioner shall be eligible for reappointment.

1.  

   (5)   A Commissioner appointed to fill a vacancy shall hold office for the unexpired term of the predecessor.

Article 16
Vacation of and removal from Office of Commissioners

1.  

   (1)   The office of a Commissioner is vacated—

   1.  

      (a)     upon the death of the Commissioner;

   1.  

      (b)     if the Commissioner is adjudged bankrupt;

   1.  

      (c)     if the Commissioner is absent from three consecutive meetings of the Commission without its permission or reasonable excuse;

   1.  

      (d)     if the Commissioner is certified by a Medical Board or Tribunal or declared by a Court to be mentally or physically incapable of performing the duties of a Commissioner;

   1.  

      (e)     if the Commissioner is convicted of fraud or any other offence involving dishonesty;

   1.  

      (f)     at any time by the Commissioner resigning from office by letter sent to the Chairperson of the Monetary Council and copied to the Secretary of the Commission.

1.  

   (2)   The Monetary Council may by notice in writing remove from office any member of the Commission whose removal appears to it to be desirable for the effective performance of the Commission of its duties or for the preservation of the integrity of the Commission.

1.  

   (3)   Notice of any removal under paragraph (2) shall be given to the Government of the Member territory or such other body by which the Commissioner was nominated and the Government or such other body shall within 30 days of such notice submit nominations to the Monetary Council for a replacement.

1.  

   (4)   The Commission may act notwithstanding a vacancy among its members or any disability affecting any Commissioner.

Article 17
Meetings of Commission

1.  

   (1)   Meetings of the Commission shall be held as often as may be necessary for the performance of its duties and in any event at least once every quarter, and such meetings shall be held at such places, times and days as the Commission may determine.

1.  

   (2)   Notice of all meetings shall be given to each Commissioner.

1.  

   (3)   The Chairperson of the Commission may at any time call a meeting of the Commission and shall call a special meeting to be held within 7 days of the receipt of a written request for that purpose addressed to the Chairperson by not less than 2 Commissioners.

1.  

   (4)   At a meeting of the Commission—

   1.  

      (a)     the Chairperson of the Commission shall preside.

   1.  

      (b)     if the Chairperson of the Commission is not present, the Deputy Chairperson shall preside; or

   1.  

      (c)     if neither the Chairperson of the Commission nor the Deputy Chairperson is present, the members present shall choose one of their number to preside.

1.  

   (5)   The quorum for a meeting of the Commission is 3 Commissioners.

1.  

   (6)   Every question for decision at a meeting of the Commission shall be determined by a majority of votes of the members present and, in the event that voting is equally divided, the Chairperson of the meeting shall have a casting vote.

1.  

   (7)   A Commissioner shall be deemed to be present at a meeting of the Commission or of a committee if the Commissioner participates by telephone or other electronic means and all Commissioners participating in the meeting are able to hear each other.

1.  

   (8)   A resolution in writing signed by all the Commissioners entitled to receive notice of a meeting of the Commission or of a committee of the Commission shall be valid and effectual as if it had been passed in a meeting of the Commission or (as the case may be) a committee of the Commission duly convened and held and may consist of several documents in the like form each signed by one or more Commissioners.

1.  

   (9)   Minutes of each meeting of the Commission shall be kept and shall be confirmed by the Commissioners as soon as practicable at a subsequent meeting.

Article 18
Administration

1.  

   (1)   The Commission shall organise and regulate its administration, procedure and business in such manner as it considers will best ensure the performance of its functions and the proper exercise of its powers.

1.  

   (2)   The Commission may make rules governing its own procedure and such rules shall be binding on the Commission.

Article 19
Committees

1.  

   (1)   The Commission may, in the exercise of its duties establish standing or special committees and may refer or assign to a committee any matter for consideration, inquiry or management by the Commission.

1.  

   (2)   The Commission may appoint a person to be a member of a committee whether that person is a member of the Commission or not, and may appoint a member of the committee to be the Chairperson.

1.  

   Provided that where a member of the Commission has been appointed to serve on a committee that member shall be the Chairperson of the committee.

1.  

   (3)   Any reference or assignment under paragraph (1) and every appointment under paragraph (2) may be withdrawn or revoked by the Commission at any time, and no such reference or assignment shall prevent the exercise by the Commission of any of its duties.

1.  

   (4)   Subject to paragraph (2), a committee established under this Article may elect one of its members to be the Chairperson and, subject to any specific or general direction of the Commission, may regulate its own procedure and business.

1.  

   (5)   Meetings of a committee shall be held at such times and places as the Chairperson of that committee may determine or as the Commission may direct.

1.  

   (6)   Each committee shall keep minutes of its meetings and shall keep the Commission informed of its activities.

Article 20
Delegation

1.  

   (1)   The Commission may delegate any of its duties, other than its power to delegate under this Article to—

   1.  

      (a)     a committee established under Article 19; or

   1.  

      (b)     any body or authority approved by the Monetary Council.

1.  

   (2)   The Commission may revoke a delegation.

1.  

   (3)   A delegation under this Article does not preclude the exercise by the Commission of any of the duties so delegated.

Article 21
Disclosure of interest

1.  

   (1)   A Commissioner who is in any way interested, whether directly or indirectly, in any transaction or arrangement with the Commission or in which the Commission is interested or whose material, pecuniary or proprietary interest in a company, partnership, undertaking or other business is likely to be affected by a decision of the Commission shall disclose the nature of his or her interest at the first meeting of the Commission at which he is present after the relevant facts come to his or her knowledge.

1.  

   (2)   A disclosure under paragraph (1) shall be recorded in the minutes of the meeting and after the disclosure the Commissioner making it shall not vote on the matter and, unless the Commission otherwise directs, shall not be present or take part in the proceedings of any meeting at which the matter is being discussed or decided by the Commission.

1.  

   (3)   A Commissioner shall be treated as having an indirect interest in any transaction or arrangement with the Commission or in which the Commission is interested if he is a director, shareholder, trustee, agent or employee of the company or undertaking that is a party to the contract or proposed contract with the Commission or where his or her spouse, parent, child, step-child, brother or sister or the parent, child, step-child, brother or sister of his or her spouse holds an interest in that company or undertaking.

1.  

   (4)   For the purpose of this Article, a general notice given to the Commission by a Commissioner to the effect that he is a member of or otherwise associated with a specified company or undertaking and is to be regarded as interested in any contract which may after the date of the notice be made with that company or undertaking shall be deemed to be a sufficient declaration of interest in relation to any contract so made.

Article 22
Staff

1.  

   (1)   The Commission may employ, on such terms and conditions as it thinks fit, such professional, technical and other officers, and such other staff, as may be necessary for the exercise and discharge of its duties.

1.  

   (2)   The Secretary shall assist the Commission in all respects and in such manner as the Commission may from time to time require in the discharge of its duties.

Article 23
Confidentiality

1.  

   (1)   Every member, officer and employee of the Commission shall—

   1.  

      (a)     at all times preserve and aid in preserving confidentiality with regard to all matters coming to his or her knowledge in the performance of his or her duties, and

   1.  

      (b)     except for the purpose of the performance of his or her duties or under legal obligation, not at any time, communicate any confidential matter to any person nor permit, unless under legal obligation, any person to have access to any records in the possession, custody or control of the Commission.

1.  

   (2)   Every member, officer and employee of the Commission shall be required to take an oath of secrecy.

PART IV
FINANCIAL MATTERS

Article 24
Funding

The Commission shall be funded by—

1.  

   (a)     the payment to the Commission of any fees or other charges in relation to—

   1.  

      (i)     an application to the Commission for any licence, authorisation, approval, exemption, waiver or modification;

   1.  

      (ii)     any duties exercised by the Commission or by a committee established by the Commission;

   1.  

      (iii)     the approval of prospectuses;

   1.  

      (iv)     the monitoring of the continuing disclosure obligations of issuers;

   1.  

      (v)     anything done in the performance of a function relating to take overs;

   1.  

      (vi)     any other matter for which provision is made under the Act;

1.  

   (b)     the payment to the Commission of a levy, as may be prescribed, in respect of every purchase and sale of securities recorded by a securities exchange or notified under its rules;

1.  

   (c)     such sums of money or such other assets as may accrue to or vest in the Commission from time to time, whether in the course of the exercise of its duties or otherwise; and

1.  

   (d)     such sums as may be paid to the Commission from time to time by a Participating Government by way of appropriation or subvention.

Article 25
Reserve Fund

1.  

   (1)   The Commission may establish a Reserve Fund into which may be paid:

   1.  

      (a)     fees, levies or any penalties imposed or charged under the Act;

   1.  

      (b)     any sums appropriated by a Participating Government for this purpose; and

   1.  

      (c)     any other sums which the Commission with the approval of the Monetary Council may determine.

1.  

   (2)   The Commission may withdraw any funds from the Reserve Fund for the purpose of exercising its duties under the Act.

1.  

   (3)   The funds in the Reserve Fund may be invested by the Commission on such terms and conditions as may be determined by the Commission. Except that the Commission shall not invest its funds in securities offered by any person under its supervision or regulation.

1.  

   (4)   No disbursement from the Reserve Fund may be made by the Commission within the first 5 years of the establishment of the Reserve Fund.

Article 26
Financial year and estimates

1.  

   (1)   The financial year of the Commission shall begin on 1 April and end on 31 March in each year, or such other period as the Monetary Council may determine except that the first financial year of the Commission shall begin on the establishment of the Commission under Article 3 and end on the following 31 March or such other date as the Monetary Council may decide.

1.  

   (2)   The Commission shall not later than 31 December in each financial year or at least 3 months before the end of its financial year submit to the Monetary Council for its approval estimates of its income and expenditure for the next financial year.

1.  

   (3)   The Commission shall discharge its functions to ensure that its revenue is not less than sufficient to meet all sums properly chargeable to its revenue account.

1.  

   (4)   Any excess of the revenue of the Commission for any financial year over the sum properly chargeable to its revenue account for that year shall be applied by the Commission for the purposes of the Commission.

1.  

   (5)   Where any deficit arises on the operations of the Commission or is budgeted for in the Estimates of expenditure of the Commission the Participating Governments shall provide a subvention to the Commission to meet the deficit in such proportion as may be determined by the Monetary Council.

Article 27
Accounts

1.  

   (1)   The Commission shall keep proper accounts and records of its transactions.

1.  

   (2)   The Commission shall, as soon as practicable after the end of each financial year, prepare a statement of the accounts of the Commission for the financial year including an income and expenditure account and balance sheet.

Article 28
Auditors and audit

1.  

   (1)   The Commission shall with the approval of the Monetary Council, appoint auditors.

1.  

   (2)   The Commission shall, as soon as practicable after the end of each financial year, submit the statement of accounts prepared for the year under Article 28 to the auditors for audit.

1.  

   (3)   The auditors shall prepare a report on the accounts and send the report to the Commission who shall, as soon as practicable after its receipt, send a copy of the report and a copy of the statement of accounts to the Monetary Council.

1.  

   (4)   The auditors shall include in the report—

   1.  

      (a)     a statement whether, in their opinion, the income and expenditure account for the financial year to which the report relates give a true and fair view of the Commission's income and expenditure;

   1.  

      (b)     a statement whether, in their opinion, the balance sheet for the financial year gives a true and fair view of the Commission's financial affairs at the end of that financial year.

1.  

   (5)   An auditor appointed by the Commission has a right of access at all reasonable times to the books, accounts, vouchers and other records of the Commission and is entitled to require from officers of the Commission such information and explanations as he considers necessary for the performance of his or her duties as auditor.

Article 29
Annual Report

1.  

   (1)   The Commission shall, not later than 3 months after the end of each financial year of the Commission, prepare and submit a report on its activities during the financial year to the Monetary Council.

1.  

   (2)   The Monetary Council may at any time request the Commission to provide it with information concerning any matter relating to the duties of the Commission and the Commission shall provide the information requested within 14 days of such request.

PART V
MISCELLANEOUS

Article 30
Consultation and co-operation

1.  

   (1)   The Commission shall consult and co-operate with the Central Bank or any other agency that exercises regulatory authority under any enactment over a financial institution, insurance company or other body in order to minimise duplication of effort, to maximise the protection of investors and the interest of the public.

1.  

   (2)   The Commission may co-operate with any agency of a foreign government in connection with the investigation of a contravention of the Act or any similar written law whether the activities in question occurred within or outside a Member territory.

1.  

   (3)   The Commission may co-operate in the work of national, regional or international organisations dealing with the regulation of securities markets.

Article 31
Rules

1.  

   (1)   The Commission may make rules—

   1.  

      (a)     respecting the calling of and conduct of business at meetings of the Commission;

   1.  

      (b)     respecting procedures for the initiation and holding of hearings by the Commission in accordance with the Act;

   1.  

      (c)     respecting the procedure for appeals and review of orders of its delegates and self-regulatory organisations;

   1.  

      (d)     with the approval of the Monetary Council, establishing a code of conduct governing the activities of Commissioners and the officers and employees of the Commission in order to avoid conflicts of interest and other practices that the Commission considers undesirable;

   1.  

      (e)     respecting any other matter relating to the organisation, procedure, administration or practice of the Commission.

1.  

   (2)   As soon as practicable after the making of any rules, the Commission shall submit a copy of same to the Monetary Council.

Article 32
Amendments

1.  

   (1)   An amendment to the Agreement may be proposed to the Monetary Council by the Commission and shall be effective when it is agreed to by all the Participating Governments.

1.  

   (2)   All amendments to the Agreement shall be published in the official Gazette of Member territories.

Article 33
Disputes

1.  

   (1)   Any dispute between the Participating Governments concerning this Agreement or between the Commission and a participating Government, shall be submitted to arbitration by a tribunal of arbitrators appointed pursuant to paragraph (2).

1.  

   (2)  

   1.  

      (a)     If the dispute is between only two parties, each party shall be entitled to appoint one arbitrator, and the two parties shall together appoint a third arbitrator, who shall be the Chairperson of the tribunal;

   1.  

      (b)     If the dispute is between three or more parties, each party shall be entitled to appoint one arbitrator and all the parties shall together appoint an additional arbitrator, who shall be the Chairperson of the tribunal.

1.  

   (3)   If, within 30 days of receipt of the request for arbitration, any party has not appointed an arbitrator or if within 30 days of the appointment of the arbitrators the parties have not appointed the third arbitrator or, as the case may be, the additional arbitrator, any party to the dispute may request the Chief Justice of the Eastern Caribbean States Supreme Court, or such other person of authority as may be prescribed by the Monetary Council to make the required appointment.

1.  

   (4)   The procedure of the tribunal shall be fixed by the arbitrators, but the Chairperson of the tribunal shall have full power to settle all questions of procedure in any case of disagreement with respect thereto.

1.  

   (5)   A majority vote of the arbitrators shall be sufficient to reach a decision which shall be final and binding upon the parties.

1.  

   (6)   The Chairperson of the tribunal shall be entitled to vote, and in the event of a tie, the Chairperson shall have a casting vote.

Article 34
Immunities and privileges

1.  

   (1)   To enable the Commission to fulfil the functions with which it is entrusted, the status, immunities and privileges set forth in this Article shall be accorded to the Commission in the territory of each Participating Government.

1.  

   (2)   The Commission, its property and its assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that it expressly waives its immunity for the purpose of any proceedings by the terms of any contract.

1.  

   (3)   Property and assets of the Commission shall be immune from search, requisition, confiscation, expropriation or any other form of seizure.

1.  

   (4)   The archives of the Commission shall be inviolable.

1.  

   (5)   To the extent necessary to carry out the provisions of this Agreement, all property and assets of the Commission shall be free from restrictions, regulations, control and moratoria of any nature.

1.  

   (6)   The official communications of the Commission shall be accorded by Participating Governments the same treatment as the official communications of other Participating Governments.

1.  

   (7)   The Commissioners, officers and employees of the Commission:

   1.  

      (a)     shall be immune from legal process with respect to acts performed by them in their official capacity except when the Commission waives this immunity;

   1.  

      (b)     not being local nationals, shall be granted the same immunities from immigration restrictions, alien registration requirements and national service obligations and the same facilities as regards exchanges restrictions as are accorded by Participating Governments to the representatives, officials and employees of comparable rank of other Participating Governments.

   1.  

      (c)     shall be granted the same treatment in respect of travelling facilities as is accorded by Participating Governments to representatives, officials and employees of comparable rank of other Participating Governments.

1.  

   (8)  

   1.  

      (a)     The Commission, its assets, property, income and its business, shall be immune from all taxation and from all customs duties in respect of goods acquired by, or service rendered to it for its own use. The Commission shall also be immune from liability for the collection or payment of any tax duty in respect thereof except when it resells a good acquired by it to a member of the public.

   1.  

      (b)     No tax shall be levied on or in respect of salaries or emoluments, including pensions and gratuities, paid by the Commission to the Commissioners, officers and employees of the Commission.

Article 35
Accession

1.  

   (1)   After the entry into force of this Agreement, a territory which is not a signatory to this Agreement may in the discretion of the Monetary Council be permitted to accede to this Agreement on such terms and conditions as the Monetary Council may determine.

1.  

   (2)   Any such SAINT LUCIA shall deposit on or before a date appointed by the Monetary Council an Instrument of Accession with the Commission which shall signify such deposit and the date thereof to the parties to this Agreement.

Article 36
Signatories

This Agreement shall be open for signature by any Participating Government.

Article 37
Ratification

This Agreement shall be subject to ratification by the signatory Participating Governments in accordance with their respective constitutional procedures. Instruments of Ratification shall be deposited with the Director General of the Organisation of Eastern Caribbean States who shall transmit certified copies to each Participating Government.

Article 38
Entry into force

CHAPTER 12.18
SECURITIES ACT

SUBSIDIARY LEGISLATION

List of Subsidiary Legislation

Securities (Conduct of Business) Regulations

(Statutory Instrument 104/2001)

Statutory Instrument 104/2001 .. in force 20 October 2001

ARRANGEMENT OF REGULATIONS

PART 1
PRELIMINARY

PART 2
CONDUCT OF BUSINESS

PART 3
CUSTOMER MONEY

PART 4
AUDITORS

SECURITIES (CONDUCT OF BUSINESS) REGULATIONS

Commencement [20 October 2001]

PART 1
PRELIMINARY

1.   Citation and application

1.  

   (1)   These Regulations may be cited as the Securities (Conduct of Business) Regulations.

1.  

   (2)   These Regulations are of general application to all licensed securities business provided that, where a regulation applies only in particular circumstances, that regulation will apply to a licensee only if those circumstances are relevant to the type of the securities business undertaken by that licensee.

2.   Interpretation

In these Regulations—

“approved bank” means a bank licensed under the Banking Act and which is approved by the Commission for the purposes of these Regulations;

“customer bank account” means a bank account established for the purposes of regulation 33; and

“money” includes any form of money, whether represented by a cheque or other payable order, or otherwise.

3.   Contravention

If a licensee contravenes any provision of these Regulations the licensee commits a disciplinary offence.

PART 2
CONDUCT OF BUSINESS

4.   Independence

If a licensee is advising or acting for a customer the licensee shall—

1.  

   (a)     not claim it is independent or impartial if it is not; and

1.  

   (b)     ensure that any claim it makes as to its independence or impartiality adequately includes any limitation that there may be on either.

5.   Material interest

If a licensee has a material interest in a transaction to be entered into with or for a customer, or a relationship which gives rise to a conflict of interest in relation to the transaction, the licensee shall not knowingly either advise, or deal in the exercise of discretion, in relation to that transaction unless the licensee has—

1.  

   (a)     fairly disclosed that material interest or relationship, as the case may be, to the customer; or

1.  

   (b)     taken reasonable steps to ensure that neither the material interest nor relationship adversely affect the interests of the customer.

6.   Inducement

A licensee must take reasonable steps to ensure that neither it nor any of its employees or agents either offers or gives, or solicits or accepts, any inducement that is likely to conflict with any duties owed to its customers.

7.   Fair and clear communication

1.  

   (1)   A licensee may make a communication with another person that is designed to promote the provision of securities investment business services only if it can show that it believes on reasonable grounds that the communication is fair, comprehensive and not misleading.

1.  

   (2)   A licensee shall take reasonable steps to ensure that any agreement, written communication, notification or information that it gives or sends to customers to whom it provides securities investment business services is presented fairly and clearly.

8.   Customer understanding of risk

A licensee shall not—

1.  

   (a)     recommend a transaction to a customer, or effect a discretionary transaction with or for the customer, unless it has taken all reasonable steps to enable the customer to understand the risks involved;

1.  

   (b)     mislead a customer as to any advantages or disadvantages of a contemplated transaction; or

1.  

   (c)     promise a return unless the return is contractually guaranteed.

9.   Information about the licensee

A licensee must take reasonable steps to ensure that a customer to whom it provides securities investment business services is given adequate information about its identity and business address and the identity and status within the licensee's firm of employees and other relevant representatives with whom the customer has contact.

10.   Representatives of licensee

1.  

   (1)   A licensee shall satisfy itself on reasonable grounds and on a continuing basis that it has appointed a representative who is a fit and proper person to act for it in that capacity.

1.  

   (2)   A licensee shall satisfy itself on reasonable grounds and on a continuing basis that it has adequate resources to monitor and enforce compliance by its representatives with high standards of business conduct.

11.   Where customer agreement required

1.  

   (1)   A licensee shall not provide to a customer any securities investment business services relating to—

   1.  

      (a)     the discretionary management of a portfolio; or

   1.  

      (b)     any other type of business that may be specified by the Commission,

1.  

   except under a written agreement signed by the customer and returned to the licensee.

1.  

   (2)   The agreement shall set out in adequate detail the basis on which those services are provided.

1.  

   (3)   The Commission may from time to time prescribe special procedures relating to the operation of discretionary accounts and every licensee shall follow the special procedures or ensure that they are followed.

1.  

   (4)   A court of competent jurisdiction may, if it considers it just and equitable to do so, by order set aside or vary an agreement entered into in contravention of this regulation, but the order shall not affect any dealing or transaction entered into or carried out by the licensee on behalf of the customer.

12.   Customer rights

1.  

   (1)   A licensee shall not, in any written communication or agreement, seek to exclude or restrict—

   1.  

      (a)     any duty or liability to a customer which it has under any law or under any rules made by the Commission;

   1.  

      (b)     any other duty to act with skill, care and diligence that is owed to a customer in connection with the provision to the customer of securities investment business services;

   1.  

      (c)     any liability owed to a customer for failure to exercise the degree of skill, care and diligence that may reasonably be expected of it in the provision of securities investment business services.

1.  

   (2)   A purported exclusion or restriction prohibited by this regulation shall be void and of no effect.

13.   Suitability

1.  

   (1)   A licensee must take all reasonable steps to ensure that it does not give securities investment business advice to, nor effect a discretionary transaction with or for, a customer unless that advice or transaction is suitable for the customer having regard to the facts disclosed by that customer and other relevant facts about the customer of which the licensee is or ought reasonably to be aware.

1.  

   (2)   A licensee must not recommend a security to a customer unless the licensee has adequate current information in its possession to enable it to form a basis for the recommendation.

14.   Charges

1.  

   (1)   A licensee's charges must not be unfair in their incidence or unreasonable in their amount having regard to all relevant circumstances.

1.  

   (2)   A licensee must before it provides securities investment business services to a customer disclose to the customer—

   1.  

      (a)     the basis or amount of its charges for the provisions of those services; and

   1.  

      (b)     the nature and amount of any other remuneration receivable by it and attributable to the customer.

1.  

   (3)   A licensee must not have a commission, mark-up or markdown in excess of 5% and any commission, mark-up or markdown in excess of 5%, shall be treated as excessive except as otherwise determined by the Commission.

15.   Confirmation and periodic information

1.  

   (1)   When a licensee causes a sale or purchase of securities with or for a customer, it must ensure that within 24 hours the customer is sent a contract note containing the essential details of the transaction.

1.  

   (2)   If a licensee acts as an investment manager for a customer, it must ensure that the customer is sent at suitable intervals—

   1.  

      (a)     a report stating the value of the portfolio or account at the beginning and the end of the period;

   1.  

      (b)     its composition at the end of the period; and

   1.  

      (c)     in the case of a discretionary portfolio or account, changes in its composition between the beginning and the end of the period.

1.  

   (3)   A customer transaction report must be submitted to the Commission in respect of any transaction involving a sum in excess of $10,000.

16.   Customer order priority

A licensee shall deal with its customer and own account orders fairly and in due turn.

17.   Timely execution

A licensee shall effect or arrange the execution of an order as soon as is reasonably practicable after it has agreed or decided in its discretion to effect or arrange a customer order.

18.   Best execution

A licensee must take all reasonable steps to find and deal on the terms which are the best available to the customer when dealing with or for a customer.

19.   Timely allocation

A licensee must ensure that a transaction it executes is promptly allocated.

20.   Fair allocation

If a licensee aggregates an order for a customer transaction with an order for an own account transaction, or with an order for another customer transaction, then in the subsequent allocation—

1.  

   (a)     it shall not give unfair preference to itself or to any of those for whom it dealt; and

1.  

   (b)     where all orders cannot be satisfied, it shall give priority to satisfying orders for customer transactions.

21.   Front running

If a licensee intends to publish to customers a price-sensitive recommendation or research or analysis, it must not knowingly effect an own account transaction in the investment concerned or in any related investment until the customers for whom the publication was principally intended have had, or are likely to have had, a reasonable opportunity to react to it.

22.   Excessive transactions

A licensee shall not—

1.  

   (a)     deal or arrange a deal in the exercise of discretion for any customer; or

1.  

   (b)     advise a customer to deal,

1.  

   if the dealing could in the circumstances reasonably be regarded as too frequent or excessive.

23.   Insider dealing

A licensee shall not knowingly profit or seek to profit, either for its own account, the account of a customer or any third party, from inside information in the hands of any of its officers, employees or agents, or assist anyone with such information to make a profit for itself.

24.   Safeguarding of customer investments

A licensee who has custody of a customer's securities in connection with or with a view to securities investment business shall—

1.  

   (a)     keep safe, or arrange for the safekeeping of, any documents evidencing title, relating to them; and

1.  

   (b)     ensure that any securities that it buys or holds for a customer are properly registered in the customer's name or, with the consent of the customer, in the name of an appropriate nominee.

25.   Complaints

1.  

   (1)   A licensee must have internal procedures to ensure the proper handling of complaints from customers and to ensure that any appropriate remedial action on those complaints is promptly taken.

1.  

   (2)   A licensee shall maintain a customer complaints file that contains copies of all customer complaints.

26.   Compliance

1.  

   (1)   A licensee must disclose, in every transaction, whether it is dealing with a customer in its capacity as an agent or on its own account.

1.  

   (2)   A licensee and its customers shall have a fiduciary relationship and the licensee must treat and conduct its business in full observance of this obligation.

1.  

   (3)   A licensee must take reasonable steps, including the establishment and maintenance of procedures, to ensure that—

   1.  

      (a)     its officers, employees and other representatives are aware of their obligations under the Act and its regulations, and that they act in conformity with them; and

   1.  

      (b)     sufficient information is recorded and retained about its securities business in compliance with the Act and its regulations.

1.  

   (4)   A licensee must keep and maintain all necessary books and records of its business including—

   1.  

      (a)     customer account statements;

   1.  

      (b)     records of transactions;

   1.  

      (c)     order tickets;

   1.  

      (d)     confirmations; and

   1.  

      (e)     stock ledgers

1.  

   for a period of not less than 7 years, for inspection by any person duly authorised by the Commission.

27.   Supervision

A licensee must establish and maintain procedures—

1.  

   (a)     for the supervision of each of its officers, employees and other representatives; and

1.  

   (b)     for ensuring that the persons referred to in (a) do not give advice or provide services of a nature that is beyond their competence to give or to provide.

28.   Customer confidentiality

1.  

   (1)   Subject to subregulation (2), all information in the possession of a licensee relating to a customer must be kept confidential by it.

1.  

   (2)   A licensee may disclose information relating to a customer when properly required to do so by the Commission, a clearing house or the market supervision department of a securities market of which it is a member, or if it is ordered to do so by a court of competent jurisdiction.

29.   Cold calling

1.  

   (1)   No licensee shall—

   1.  

      (a)     attend at any residence without being invited by an occupant of the residence; or

   1.  

      (b)     make an unsolicited telephone call to any residence, within Saint Lucia for the purpose of trading in a security.

1.  

   (2)   Subregulation (1) does not apply where the licensee attends at or telephones the residence—

   1.  

      (a)     of a close personal friend, a business associate or a client with whom or on whose behalf the licensee has been in the habit of trading securities; or

   1.  

      (b)     of a person who has received a copy of a prospectus or draft prospectus and is requesting that information regarding a security offered in that prospectus be given to the person by the licensee.

30.   Cessation of business

If a licensee withdraws from securities business it shall—

1.  

   (a)     immediately notify the Commission and each of its customers of its decision; and

1.  

   (b)     ensure to the satisfaction of the Commission that any outstanding business is properly completed or transferred to another licensee.

PART 3
CUSTOMER MONEY

31.   Application

This Part applies to any customer money held or received by a licensee in the course of carrying on its securities business.

32.   Customer money

1.  

   (1)   For the purposes of these Regulations customer money is money of any currency which, in the course of carrying on its securities business, a licensee holds or receives on behalf of a customer or which it owes to a customer.

1.  

   (2)   Customer money shall be held by the licensee on trust for and on behalf of the respective customers for whom that customer money is received or held according to their respective shares in it.

1.  

   (3)   Customer money shall not form part of the assets of the licensee for any purpose and shall not be available in any circumstances for payment of any debt of the licensee.

33.   Customer bank accounts

1.  

   (1)   A licensee that receives or holds customer money shall open one or more customer bank accounts with an approved bank.

1.  

   (2)   A customer bank account must be kept segregated from any account holding money belonging to the licensee.

1.  

   (3)   A licensee must immediately pay into a customer bank account all customer money coming into its hands for or from a customer.

1.  

   (4)   A licensee must keep records of—

   1.  

      (a)     all amounts paid into a customer bank account kept by the licensee, specifying the persons on whose behalf the amounts are held and the dates on which they were paid into the account;

   1.  

      (b)     all withdrawals from a customer bank account, the dates of those withdrawals, and the names of the persons on whose behalf the withdrawals are made; and

   1.  

      (c)     any other particulars that may be determined by the Commission.

34.   Accounting for and use of customer money

A licensee must account properly and promptly for customer money and, in particular, must ensure that—

1.  

   (a)     customer money and other money do not become mixed;

1.  

   (b)     the licensee can at all times be sure how much customer money stands to the credit of each customer; and

1.  

   (c)     money belonging to one customer is not used for another customer.

35.   Payment out of a customer bank account

1.  

   (1)   Subject to subregulation (2), money may be withdrawn from a customer bank account only if—

   1.  

      (a)     it is not customer money;

   1.  

      (b)     it is properly required for payment to or on behalf of a customer; or

   1.  

      (c)     it is properly transferred to another customer bank account or into a bank account in the customer's own name.

1.  

   (2)   A licensee may withdraw money from a customer bank account for or towards payment of its own fees or commission only if the fees or commission accord with the arrangements agreed with the customer.

PART 4
AUDITORS

36.   Engagement letters

A licensee shall ensure that the auditor appointed under section 81 of the Act has the powers and duties specified in regulation 37 and that—

1.  

   (a)     those powers and duties are set out in an engagement letter;

1.  

   (b)     the engagement letter is signed by the licensee and the auditor; and

1.  

   (c)     the licensee retains a copy of the engagement letter.

37.   Powers and duties of auditors

1.  

   (1)   An auditor shall have—

   1.  

      (a)     a right of access at all times to the accounting and other records of the licensee and all other documents relating to its business; and

   1.  

      (b)     a right to require from the licensee any information and explanation deemed necessary for the performance of the duties of an auditor.

1.  

   (2)   An auditor shall submit a report to the Commission on the annual financial statements in accordance with these Regulations and the report shall state the matters specified in regulation 18 of the Securities (Accounting and Financial Statements) Regulations.

1.  

   (3)   In preparing an auditor's report for the purposes of these Regulations, the auditor shall carry out the necessary investigations to enable the auditor to form an opinion as to the matters required by regulation 18 of the Securities (Accounting and Financial Statements) Regulations to be stated in the report.

38.   Notification to Commission

A licensee must, within 7 days, give written notice to the Commission of the appointment, removal or resignation of an auditor.

39.   Resignation or removal of auditors

1.  

   (1)   If an auditor resigns or is removed by a licensee, the notice required by the Commission under regulation 38 shall contain either—

   1.  

      (a)     a statement signed by the auditor to the effect that there are no circumstances connected with the resignation or removal which the auditor considers should be brought to the attention of the Commission; or

   1.  

      (b)     a statement signed by the auditor stating the circumstances mentioned in paragraph (a).

1.  

   (2)   For the purposes of these Regulations, a failure to appoint an auditor at the end of the auditor's term of office shall be deemed to be removal of that auditor.

Securities (Accounting and Financial Statements) Regulations

(Statutory Instrument 105/2001)

Statutory Instrument 105/2001 .. in force 20 October 2001

ARRANGEMENT OF REGULATIONS

PART 1
PRELIMINARY

PART 2
ACCOUNTING RECORDS

PART 3
FINANCIAL STATEMENTS AND RETURNS

SECURITIES (ACCOUNTING AND FINANCIAL STATEMENTS) REGULATIONS

Commencement [20 October 2001]

PART 1
PRELIMINARY

1.   Citation and application

1.  

   (1)   These Regulations may be cited as the Securities (Accounting and Financial Statements) Regulations.

1.  

   (2)   These Regulations apply to all broker dealers and limited service brokers licensed by the Commission.

2.   Interpretation

In these Regulations—

“financial year” means—

1.  

   (a)     the period of 12 months beginning with the day on which the licensee commences to carry on the business in respect of which the licence has been granted; and

1.  

   (b)     each subsequent period of 12 months beginning with the day following the day as at which an annual balance sheet of the licensee is prepared for the purposes of these Regulations; and

“licensee” means a broker dealer or limited service broker.

3.   Contravention

A licensee who contravenes any provision of these Regulations commits a disciplinary offence.

PART 2
ACCOUNTING RECORDS

4.   Duty to keep accounting records

1.  

   (1)   A licensee shall keep accounting records which are sufficient to show and explain its securities transactions (whether they are effected on its own behalf or on behalf of others) and that—

   1.  

      (a)     disclose with reasonable accuracy, at any time, the financial position of the licensee at that time; and

   1.  

      (b)     enable the licensee to prepare a balance sheet and a profit and loss account as at any time and which comply with the requirements of these Regulations.

1.  

   (2)   The accounting records must in particular contain—

   1.  

      (a)     entries from day to day of all sums of money received and expended by the licensee, and the matters in respect of which the receipt and expenditure takes place;

   1.  

      (b)     a record of all assets and liabilities of the licensee including any commitments or contingent liabilities;

   1.  

      (c)     entries from day to day of all purchases and sales of securities by the licensee distinguishing those which are made by the licensee on its own account and those which are made by it on behalf of others;

   1.  

      (d)     entries from day to day of—

      1.  

         (i)     all customer money which is paid into or out of a customer bank account maintained for the purposes of these Regulations,

      1.  

         (ii)     receipts and payments of customer money not passed through a customer bank account, identifying the persons to whom each receipt or payment relates;

   1.  

      (e)     a record of balances—

      1.  

         (i)     on customer bank accounts,

      1.  

         (ii)     balances with individual customers stating the name of each customer and the amount held or received for that customer; and

   1.  

      (f)     details of all securities that are—

      1.  

         (i)     the property of the licensee, showing by whom they are held and whether, if held otherwise than by the licensee itself, they are so held as collateral against loans or advances, and

      1.  

         (ii)     not the property of the licensee but for which the licensee is accountable, showing by whom and for whom they are held distinguishing those which are deposited with a third party whether as security for loans or advances made to the licensee or any related person or for any other purpose.

5.   Records to be up to date

The obligations under these Regulations are continuing obligations and continuous performance of them is required so as to ensure that records are updated daily.

6.   Audit trail

1.  

   (1)   Where these Regulations require information to be recorded it shall be recorded in such a way as to enable a particular transaction to be identified at any time and traced through from initiation of the order to final settlement.

1.  

   (2)   All records shall be arranged, filed, indexed and cross referenced so as to permit prompt access to any particular record.

7.   Conformity with accounting standards

The accounting records that a licensee is required to keep must conform to the requirements of international accounting standards.

8.   Retention of records

A licensee shall preserve the accounting records that it is required to keep under regulation 4 for at least 7 years from the date on which they are made.

9.   Inspection of records

Accounting records which are required to be kept under regulation 4 shall, at any time during the period in which they are required to be preserved, be produced to the Commission, or any person authorised by the Commission to receive the documents, on demand at a reasonable time and place that may be specified by the Commission or that person.

10.   Securities exchange may impose additional requirements on members

These Regulations shall not prevent a licensed securities exchange from imposing on licensees who are members of the exchange any further obligations or requirements that may be necessary with respect to—

1.  

   (a)     the keeping of accounts, books and records;

1.  

   (b)     the making of periodic financial reports to the exchange in the form and manner required by the exchange;

1.  

   (c)     the audit of accounts;

1.  

   (d)     the provision of an appropriate trail;

1.  

   (e)     the information to be given in reports by auditors; or

1.  

   (f)     spot order checks.

PART 3
FINANCIAL STATEMENTS AND RETURNS

11.   Duty to prepare annual financial statements

A licensee shall prepare for each of its financial years annual financial statements that must consist of—

1.  

   (a)     a balance sheet as at the last day of the financial year; and

1.  

   (b)     a profit and loss account for the financial year.

12.   Balance sheet to give a true and fair view

The balance sheet must give a true and fair view of the state of affairs of the licensee as at the end of the financial year.

13.   Profit and loss account to give a true and fair view

The profit and loss account must give a true and fair view of the profit or loss of the licensee for the financial year.

14.   Form and content of financial statements

The financial statements of a licensee must comply with the requirements of international accounting standards.

15.   Commission may require returns

1.  

   (1)   The Commission may by written notice require a licensee to submit periodic returns to it.

1.  

   (2)   In addition to any periodic returns required under subregulation (1), the Commission may by written notice require a licensee, either generally or in a particular case or class of case, to submit exceptional returns to the Commission.

16.   Licensee to obtain auditor's report, etc

A licensee shall submit, within one month after the end of each financial year, its annual financial statements to its auditor for audit and shall obtain an auditor's report that complies with the requirements of regulation 18.

17.   Annual financial statements, etc. to be submitted to Commission

1.  

   (1)   A licensee shall submit, within 3 months after the end of each financial year, its auditor's report to the Commission together with—

   1.  

      (a)     its annual financial statements; and

   1.  

      (b)     confirmation in writing that it has complied with every regulation that it is required to comply and any further information or confirmation as the Commission may require.

1.  

   (2)   Where the auditor's report is qualified on the grounds of the auditor's uncertainty as to the completeness or accuracy of the accounting records, that report must when submitted by the licensee to the Commission be accompanied by a written document signed by 2 directors stating whether all—

   1.  

      (a)     the accounting records of the licensee have been made available to the auditor for the purposes of the audit;

   1.  

      (b)     transactions undertaken by the licensee have been properly reflected and recorded in its accounting records; and

   1.  

      (c)     other records of the licensee and related information have been made available to the auditor.

18.   Contents of auditor's report

1.  

   (1)   The auditor's report must state whether the annual financial statements of the licensee have been audited in accordance with approved auditing standards.

1.  

   (2)   The auditor's report must also state whether in the opinion of the auditor—

   1.  

      (a)     the annual financial statements of the licensee have been properly prepared in accordance with these Regulations;

   1.  

      (b)     in the case of the balance sheet, a true and fair view is given of the financial state of affairs of the licensee as at the end of the financial year;

   1.  

      (c)     in the case of the profit and loss account, a true and fair view is given of the profit or loss of the licensee for the financial year;

   1.  

      (d)     the licensee has, throughout the financial year, kept proper accounting records in accordance with the requirements of these Regulations;

   1.  

      (e)     the licensee has kept customer money properly segregated in accordance with regulation 33 of the Securities (Conduct of Business) Regulations;

   1.  

      (f)     the balance sheet and the profit and loss account are in agreement with the licensee's accounting records;

   1.  

      (g)     all the information and explanations obtained were to the best of the auditor's knowledge and belief necessary for the purposes of the audit;

   1.  

      (h)     the licensee has maintained throughout the financial year systems adequate to enable the licensee to identify documents evidencing title, to securities held in safekeeping for the licensee's customers in accordance with regulation 24 of the Securities (Conduct of Business) Regulations; and

   1.  

      (i)     the licensee was in compliance with the requirements of regulation 24 of the Securities (Conduct of Business) Regulations as at the date on which the balance sheet was prepared.

19.   Qualified reports

1.  

   (1)   If the auditor is of the opinion that one or more of the requirements of regulation 18 have not been met, the auditor shall state that fact in the report and specify the relevant requirements and the respects in which they have not been met.

1.  

   (2)   If the auditor fails to obtain all the information and explanations that, to the best of the auditor's knowledge and belief, are necessary for the purposes of the audit, that fact shall be stated in the report.

1.  

   (3)   If the auditor is unable to form an opinion as to whether one or more of the requirements of regulation 18 have been met, the auditor shall state that fact in the report and specify those requirements and give the reasons why it was not possible to form an opinion.

Securities (Prospectus) Regulations

(Statutory Instrument 102/2001)

Statutory Instrument 102/2001 .. in force 20 October 2001

ARRANGEMENT OF REGULATIONS

SECURITIES (PROSPECTUS) REGULATIONS

Commencement [20 October 2001]

1.   Citation

These Regulations may be cited as the Securities (Prospectus) Regulations.

2.   Interpretation

In these Regulations—

“director” includes any person who occupies the position of a director, by whatever name called;

“prospectus” means a prospectus or draft prospectus approved by the Commission under the Act; and

“securities exchange” means a securities exchange licensed by the Commission.

3.   Exemptions

1.  

   (1)   A public offer of securities shall not be required to be the subject of a prospectus if any one of the conditions specified in subregulation (2) is satisfied in relation to the offer.

1.  

   (2)   The following are the conditions specified—

   1.  

      (a)     the securities offered are not generally advertised to the public;

   1.  

      (b)     the securities are offered in connection with a bona fide invitation to enter into an underwriting agreement with respect to them;

   1.  

      (c)     the securities are offered by the issuer to members or employees of the issuer;

      1.  

         (ii)     members of the families of any such members or employees, or

      1.  

         (iii)     holders of debentures of the issuer;

   1.  

      (d)     the total consideration payable for the securities cannot exceed $25,000 even in the case where the offering is made under (c);

   1.  

      (e)     the securities are shares and are offered free of charge to any or all of the holders of shares in the issuer.

1.  

   (3)   If a class of shares has been admitted to dealings on a securities exchange, the Commission may authorise the making of an offer without a prospectus, provided that—

   1.  

      (a)     the number or estimated market value of the shares amounts to less than 10% of the number or of the corresponding market value of shares of the same class already admitted to dealings; and

   1.  

      (b)     up-to-date information equivalent to that required by this regulation is available as a result of the requirements of that exchange.

4.   Form and content of prospectus

1.  

   (1)   A prospectus must contain all information that investors and their professional advisers would reasonably require and expect to find there, for the purpose of making an informed assessment of—

   1.  

      (a)     the assets and liabilities, financial position, profits and losses, purpose or use of proceeds, risk of offering and prospects of the issuer of the securities; and

   1.  

      (b)     the rights attaching to those securities.

1.  

   (2)   In particular a prospectus must contain, subject to regulation 5 and to subregulations (4) and (5), the information specified in the Schedule.

1.  

   (3)   The information in a prospectus shall be presented in as easily analysable and comprehensible a form as possible.

1.  

   (4)   If, on the occasion of their admission to dealings on a securities exchange, shares are offered on a pre-emptive basis to some or all of the existing shareholders, the Commission may authorise the omission from a prospectus of specified information provided that up-to-date information equivalent to that which would otherwise be required by this regulation is available as a result of the requirements of that exchange.

1.  

   (5)   Where a person—

   1.  

      (a)     makes an offer to the public in Saint Lucia of securities which the person proposes to issue; and

   1.  

      (b)     has, within the 12 months preceding the date on which the offer is first made, published a full prospectus relating to a different class of securities which the person has issued, or to an earlier issue of the same class of securities,

1.  

   the person may publish, instead of a full prospectus, a prospectus which contains only the differences which have arisen since the publication of that full prospectus and which are likely to influence the value of the securities, provided that the prospectus is accompanied by that previously published full prospectus.

1.  

   (6)   For the purposes of subregulation (5), a “full prospectus” is one that contains the information specified in the Schedule (other than information whose omission is authorised by the Commission by or under subregulation (4) or regulation 5).

5.   Exceptions

The Commission may authorise the omission from a prospectus of information whose inclusion would otherwise be required by these Regulations if the Commission is satisfied that—

1.  

   (a)     disclosure of that information would be contrary to the public interest;

1.  

   (b)     the information is of minor importance only, and is not likely to influence assessment of the issuer's assets and liabilities, financial position, profits and losses and prospects; or

1.  

   (c)     disclosure of that information would be seriously detrimental to the issuer and its omission would not be likely to mislead investors with regard to facts and circumstances necessary for an informed assessment of the securities.

6.   Advertisements in Connection with Public Offer

An advertisement shall not be issued to the public in Saint Lucia announcing a public offer of securities for which a prospectus is required under these Regulations by the person proposing to make the offer unless the advertisement states that—

1.  

   (a)     the Commission has approved the prospectus relating to the public offer; and

1.  

   (b)     a prospectus is or will be published, as the case may be, and gives an address in Saint Lucia from which it can be obtained or will be obtainable.

Schedule

(Regulation 4)

FORM AND CONTENT OF PROSPECTUS

PART 1
GENERAL REQUIREMENTS

1.  

   1.   The name of the issuer, the address of its registered office and the date and location of incorporation.

1.  

   2.   The names and functions of the directors of the issuer.

1.  

   3.   The date of publication of the prospectus.

1.  

   4.   A statement that a copy of the prospectus has been delivered to the Commission for approval in accordance with these Regulations.

1.  

   5.   A statement that the prospectus has been drawn up in accordance with these Regulations.

1.  

   6.   The following words, “If you are in any doubt about the contents of this document you should consult a person licensed under the Act who specialises in advising on the acquisition of shares and other securities”, or words to the like effect.

PART 2
THE PERSONS RESPONSIBLE FOR THE PROSPECTUS AND ADVISERS

1.  

   7.   The names, addresses (home or business) and functions of those persons responsible for the prospectus or any part of the prospectus, specifying the part.

1.  

   8.   A declaration by the directors of the issuer or, if the offeror is not the issuer, by the directors of the offeror that to the best of their knowledge the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect the import of the information.

PART 3
THE SECURITIES TO WHICH THE PROSPECTUS RELATES AND THE OFFER

1.  

   9.   A description of the securities being offered, including the class to which they belong and a description of the rights attaching to them including where applicable—

   1.  

      (a)     if the securities are shares, rights as regards—

      1.  

         (i)     voting,

      1.  

         (ii)     dividends,

      1.  

         (iii)     return of capital on the winding up of the issuer,

      1.  

         (iv)     redemption and a summary of the consents necessary for the variation of any of those rights;

   1.  

      (b)     if the securities are debentures, rights as regards—

      1.  

         (i)     interest payable,

      1.  

         (ii)     repayment of principal.

1.  

   10.   The dividend policy of the issuer, and in particular whether it has paid dividends within the last 5 years and, if so, how much and when, and whether the issuer expects to pay dividends over the next 2 years.

1.  

   11.   The dates if any, on which entitlement to dividends or interest arises.

1.  

   12.   The procedure for the exercise of any right of pre-emption attaching to the securities.

1.  

   13.   Any restriction on the free transferability of the securities being offered.

1.  

   14.  

   1.  

      (1)     A statement as to whether—

      1.  

         (a)     the securities being offered have been admitted to dealings on a licensed securities exchange; or

      1.  

         (b)     an application for such admission has been made.

   1.  

      (2)     If no application for dealings has been made, or an application has been made and refused, a statement as to whether or not there are, or are intended to be, any other arrangements for there to be dealings in the securities and, if there are, a brief description of the arrangements.

1.  

   15.   The purpose for which the securities are being issued.

1.  

   16.   The number of securities being issued.

1.  

   17.   The number of securities being offered.

1.  

   18.   The total proceeds expected to be raised by the offer and the expected net proceeds, after deduction of the expenses, of the offer.

1.  

   19.   Details as to the use of the proceeds of the issue and in particular their use for capital expenditure, debt reduction, acquisitions, working capital or other.

1.  

   20.   Where the prospectus relates to shares which are offered for subscription, particulars as to—

   1.  

      (a)     the minimum amount which, in the opinion of the directors of the issuer, must be raised by the issue of those shares in order to provide the sums or, if any part of them is to be defrayed in any other manner, the balance of the sums, required to be provided in respect of each of the following:

      1.  

         (i)     the purchase price of any property purchased, or to be purchased, which is to be defrayed in whole or in part out of the proceeds of the issue,

      1.  

         (ii)     any preliminary expenses payable by the issuer and any commission so payable to any person in consideration of his or her agreeing to subscribe for, or of his or her procuring or agreeing to procure subscriptions for, any shares in the issuer,

      1.  

         (iii)     the repayment of any money borrowed by the issuer in respect of any of the foregoing matters,

      1.  

         (iv)     working capital; and

   1.  

      (b)     the amounts to be provided in respect of the matters mentioned otherwise than out of the proceeds of the issue and the sources out of which those amounts are to be provided.

1.  

   21.   The names of any persons underwriting or guaranteeing the offer.

1.  

   22.   The amount or the estimated amount of the expenses of the offer and by whom they are payable, including a statement as to any commission payable by the issuer to any person in consideration of his or her agreeing to subscribe for securities to which the prospectus relates or of his or her procuring or agreeing to procure subscriptions for the securities.

1.  

   23.   The names and addresses of the paying agents if any.

1.  

   24.   The period during which the offer of the securities is open.

1.  

   25.   The price at which the securities are offered or, if appropriate, the procedure, method and timetable for fixing the price.

1.  

   26.   The arrangements for payment for the securities being offered and the arrangements and timetable for their delivery.

1.  

   27.   The arrangements during the period prior to the delivery of the securities being offered relating to the moneys received from applicants including the arrangements for the return of moneys to applicants where their applications are not accepted in whole or in part and the timetable for the return of the monies.

PART 4
GENERAL INFORMATION ABOUT THE ISSUER AND ITS CAPITAL

1.  

   28.   The date and place of incorporation of the issuer. In the case of an issuer not incorporated in Saint Lucia, the address of its principal place of business in Saint Lucia.

1.  

   29.   The legal form of the issuer, the legislation under which it was formed and (if different) the legislation now applicable to it.

1.  

   30.   A summary of the provisions in the issuer's constitution determining its objects.

1.  

   31.   The amount of the issuer's authorised share capital and any limit on the duration of the authorisation to issue share capital.

1.  

   32.   The amount of the issuer's issued share capital.

1.  

   33.   The number and particulars of any listed and unlisted securities issued by the issuer not representing share capital.

1.  

   34.   The number of shares of each class making up each of the authorised and issued share capital, the nominal value of the shares and, in the case of the issued share capital, the amount paid up on the shares.

1.  

   35.   If the issuer is a member of a group, a brief description of the group and of the issuer's position in it, stating, where the issuer is controlled by another company, the name of its controlling company.

1.  

   36.   In so far as the offeror has the information, an indication of the persons, who, directly or indirectly, jointly or severally, exercise or could exercise control over the issuer and particulars of the proportion of the issuer's voting capital held by such persons.

PART 5
THE ISSUER'S PRINCIPAL ACTIVITIES

1.  

   37.   A description of the issuer's principal activities and any exceptional factors that have influenced its activities.

1.  

   38.   A statement of any dependence of the issuer on patents or other intellectual property rights, licences or particular contracts, where any of these are of fundamental importance to the issuer's business.

1.  

   39.   With regard to risk factors—

   1.  

      (a)     list in order of importance the factors which the issuer considers to be the most substantial risks to an investor in this offering amongst them the following—

      1.  

         (i)     untested products,

      1.  

         (ii)     cash-flow or liquidity problems,

      1.  

         (iii)     dependence upon a key supplier or customer,

      1.  

         (iv)     management inexperience,

      1.  

         (v)     nature of business,

      1.  

         (vi)     absence of a trading market; and

   1.  

      (b)     state which constitute the greatest threat that an investment may be lost in whole or part, or not provide an adequate return.

1.  

   40.   Information regarding investments in progress where they are significant.

1.  

   41.   Information on any legal or arbitration proceedings, active, pending or threatened against, or being brought by, the issuer or any member of its group which are having or may have a significant effect on the issuer's financial position.

PART 6
THE ISSUER'S FINANCIAL POSITION

1.  

   42.   Subject to regulation 44, the issuer's annual accounts (balance sheet and profit and loss account) for the last three years together with—

   1.  

      (a)     a statement by the directors of the issuer that the accounts have been prepared in accordance with the Act, and that they accept responsibility for them, or a statement why they are unable to make that statement;

   1.  

      (b)     the names and addresses of the auditors of the accounts;

   1.  

      (c)     a copy of the auditor's reports on the account; and

1.  

   a statement by the auditors that they consent to the inclusion of their reports in the prospectus and accept responsibility for them, and have not become aware, since the date of any report, of any matter affecting the validity of that report at that date; or a statement why they are unable to make such a statement.

1.  

   43.  

   1.  

      (1)     If more than 9 months have elapsed at the date on which the offer is first made since the end of the last financial year in respect of which accounts are required to be included in the prospectus by regulation 42, there shall also be included in the prospectus

      1.  

         (a)     a report by a person qualified to act as an auditor, covering the period referred to in subregulation (2), with respect to the state of affairs and profit or loss of the issuer together with the name and address of the person responsible for preparing the report; and

      1.  

         (b)     a statement by the person preparing the report that the person consents to the inclusion of the report in the prospectus and accepts responsibility for it; or

      1.  

         (c)     a statement why the person preparing the report is unable to make such a statement.

   1.  

      (2)     The period to be covered by the report is the period beginning at the end of the last financial year in respect of which accounts are required to be included in the prospectus by regulation 42 and ending on the latest practicable date before (but not in any event more than 3 months before) the date on which the offer is first made.

1.  

   44.   If an issuer has not been in existence for the whole of the last 3 years, the prospectus shall contain a report by a person qualified to act as an auditor which includes—

   1.  

      (a)     details of the profit or loss of the issuer in respect of the period beginning with the date of its formation and ending on the latest practicable date before (but not in any event more than 3 months before) the date on which the offer is first made, and of its state of affairs at that latest practicable date; and

   1.  

      (b)     a statement by the person responsible for the report that in that person's opinion it gives a true and fair view of the state of affairs and profit or loss of the issuer and that the person consents to the inclusion of the report in the prospectus and accepts responsibility for it, or a statement why the person is unable to make such a statement.

1.  

   45.   If the issuer is a parent company, the requirements of regulations 42 and 44 shall apply to each of its subsidiaries.

PART 7
THE ISSUER'S ADMINISTRATION AND MANAGEMENT

1.  

   46.   A concise description of the directors' existing or proposed service contracts with the issuer or any subsidiary of the issuer, excluding contracts expiring, or determinable by the employing company without payment of compensation within one year, or an appropriate negative statement.

1.  

   47.   The aggregate remuneration paid and benefits in kind granted to the directors of the issuer during the last completed financial year of the issuer, together with an estimate of the aggregate amount payable and benefits in kind to be granted to the directors, and proposed directors, for the current financial year under the arrangements in force at the date on which the offer is first made.

1.  

   48.   The interests of each director of the issuer in the share capital of the issuer, distinguishing between beneficial and non-beneficial interests, or an appropriate negative statement.

1.  

   49.   Full particulars of any contract or arrangement existing at the date of the prospectus in which a director of the issuer is materially interested, or an appropriate negative statement.

1.  

   50.  

   1.  

      (1)     A description (being the qualifications or area of expertise or responsibility) of every director or proposed director (or any other person who performs an important administrative, management or supervisory function) and particulars of the principal functions performed by each.

   1.  

      (2)     A brief account of the business experience of each of these persons during the last 5 years.

   1.  

      (3)     The nature of any family relationship between the persons mentioned in subregulation (1).

   1.  

      (4)     Indicate each director or proposed director that holds any other directorship.

PART 8
RECENT DEVELOPMENTS IN THE ISSUER'S BUSINESS AND PROSPECTS

1.  

   51.   The significant recent trends concerning the development of the issuer's business since the end of the last completed financial year of the issuer.

1.  

   52.   Information on the issuer's financial and trading prospects for at least the current financial year of the issuer.

1.  

   53.   The dates of and parties to all material contracts (not being contracts entered into in the ordinary course of business) entered into by the issuer and its subsidiaries within the 2 years immediately preceding the issue of the prospectus together with a summary of the principal contents of the contracts.

Where a profit forecast appears in the prospectus the principal assumptions, including commercial assumptions that the forecast is based on must be stated.

Securities (Continuing Disclosure Obligations of Issuers) Regulations

(Statutory Instrument 108/2001)

Statutory Instrument 108/2001 .. in force 20 October 2001

ARRANGEMENT OF REGULATIONS

PART 1
PRELIMINARY

PART 2
DISCLOSURE OBLIGATIONS

PART 3

SECURITIES (CONTINUING DISCLOSURE OBLIGTIONS OF ISSUERS) REGULATIONS

Commencement [20 October 2001]

PART 1
PRELIMINARY

1.   Citation and application

1.  

   (1)   These Regulations may be cited as the Securities (Continuing Disclosure Obligations of Issuers) Regulations.

1.  

   (2)   These Regulations apply to issuers of securities which are shares, warrants or corporate debt securities and which are publicly offered or publicly traded.

1.  

   (3)   For the purpose of these Regulations, securities are “publicly offered” if the issuer has issued the securities pursuant to a prospectus approved by the Commission under the Act.

1.  

   (4)   For the purpose of these Regulations, securities are “publicly traded”, irrespective of when issued, if—

   1.  

      (a)     the securities are listed or otherwise admitted to dealing on a securities exchange; or

   1.  

      (b)     the Commission so determines, and notifies the issuer in writing to this effect, having regard to the frequency or volume of trading in the issuer's securities wherever and however the trading takes place.

2.   Interpretation

In these Regulations—

“associate” in relation to any director or chief executive means—

1.  

   (a)     the spouse;

1.  

   (b)     any son, daughter, step son or step daughter under the age of 18 years of the director or chief executive, or of the spouse of such director or chief executive;

1.  

   (c)     any company of which the director or chief executive is a substantial shareholder, and the holding company or subsidiary of the company of which the director or chief executive is a substantial shareholder;

“chief executive” means a person employed by an issuer who either alone or together with one or more other persons is or will be responsible under the immediate authority of the board of directors for the conduct of the business of the issuer;

“director” includes any person who occupies the position of a director, by whatever name called;

“financial year” means the period in respect of which any profit and loss account of an issuer laid before its members in a general meeting is made up, whether that period is a year or not;

“principal activity”, in relation to an issuer and its subsidiaries, means an activity which in the financial year contributes more than 10% of—

1.  

   (a)     the aggregate turnover; or

1.  

   (b)     the aggregate results of all activities that

   1.  

      (i)     showed profits, or

   1.  

      (ii)     showed losses;

“prospectus” means a prospectus or draft prospectus approved by the Commission under the Act;

“securities exchange” means a securities exchange licensed by the Commission under the Act;

“substantial shareholder”, in relation to an issuer, means a person entitled to exercise, or control the exercise of 5% or more of the voting power at any general meeting of the issuer; and

“transaction” includes 2 or more related transactions.

PART 2
DISCLOSURE OBLIGATIONS

3.   General obligation

1.  

   (1)   Generally and apart from compliance with all the specific requirements of these Regulations, an issuer shall notify—

   1.  

      (a)     the securities exchange on which its securities are listed or otherwise admitted to dealing;

   1.  

      (b)     the Commission;

   1.  

      (c)     its members; and

   1.  

      (d)     other holders of its securities,

1.  

   without delay of any material information that has not been previously disclosed by the issuer and which information—

   1.  

      (i)     is necessary to enable them and the public to appraise the financial position of the issuer and its subsidiaries,

   1.  

      (ii)     is necessary to avoid the establishment of a false market in its securities, or

   1.  

      (iii)     would be likely to bring about a material change in the price of its securities.

1.  

   (2)   Subregulation (1) shall not apply—

   1.  

      (a)     with regard to information about impending developments or matters in the course of negotiation, provided that if the issuer has reason to believe that a leak has occurred or is likely to occur and, in either case, the development or matter in question is such that knowledge of it would be likely to lead to a substantial movement in the price of its securities, the issuer must without delay notify the securities exchange and at least give a warning announcement to the effect that the issuer expects shortly to release information which may lead to such a movement;

   1.  

      (b)     if the securities exchange is satisfied by the issuer that disclosure to the public of information under subregulation (1) might prejudice the issuer's legitimate interests and the securities exchange grants a dispensation from the requirement of subregulation (1).

4.   Delivery of accounts

The issuer shall send to—

1.  

   (a)     the securities exchange;

1.  

   (b)     the Commission;

1.  

   (c)     every member of the issuer; and

1.  

   (d)     every holder of securities (not being bearer securities) issued by the issuer,

1.  

   a copy of the issuer's annual accounts, auditor's report and director's report for the previous financial year of the issuer, not less than 21 days before the date of the issuer's annual general meeting nor more than 3 months after the end of that financial year.

5.   Information to accompany directors' report

The issuer shall include in or with the annual directors' report—

1.  

   (a)     a description of the principal activities of the issuer and its subsidiaries and, where 2 or more activities are so described, a statement giving in respect of each activity the turnover and contribution to operating profit;

1.  

   (b)     a geographical analysis of consolidated turnover and contribution to trading results of trading operations carried on by the issuer and its subsidiaries outside Saint Lucia;

1.  

   (c)     an audited consolidated financial statement;

1.  

   (d)     a statement showing—

   1.  

      (i)     the name of every subsidiary, its principal country of operation, its country of incorporation and its main business, and

   1.  

      (ii)     particulars of the issued share capital and debt securities of every subsidiary,

1.  

   provided that if, in the opinion of the directors of the issuer, the number of subsidiaries is such that compliance with this paragraph would result in particulars of excessive length being given, compliance shall not be required except in the case of subsidiaries carrying on a business the results of which, in the opinion of the directors, materially affected the amount of the profit or loss of the issuer or the amount of the assets of the issuer;

   1.  

      (e)     a statement as at the end of the relevant financial year showing—

      1.  

         (i)     the interests of each director and chief executive of the issuer in the equity or debt securities of the issuer or any subsidiary, and of the associates of the director and chief executive in so far as is known or may be ascertained by reasonable enquiry, and

      1.  

         (ii)     the details of any right to subscribe for equity or debt securities of the issuer granted to any director or chief executive of the issuer, and of the associates of such director and chief executive in so far as is known or may be ascertained by reasonable enquiry, and of the exercise of any such right;

   1.  

      (f)     the statement required by paragraph (d) must—

      1.  

         (i)     distinguish between beneficial and non-beneficial interests, and

      1.  

         (ii)     specify the company in which securities are held, the class to which those securities belong and the number of such securities held;

   1.  

      (g)     in the event of operating results shown by the accounts for the period under review differing materially from any published forecast made by the issuer, an explanation for the difference;

   1.  

      (h)     a statement by the directors as to the reasons for any significant departure from applicable standard accounting practices in Saint Lucia;

   1.  

      (i)     a statement as at the end of the financial year showing as regards, first bank loans and overdrafts and, secondly, other borrowings of the issuer and its subsidiaries, the aggregate amounts repayable—

      1.  

         (i)     on demand or within a period not exceeding 1 year,

      1.  

         (ii)     within a period of more than 1 year but not exceeding 2 years,

      1.  

         (iii)     within a period of more than 2 years but not exceeding 3 years,

      1.  

         (iv)     within a period of more than 3 years;

   1.  

      (j)     in respect of the financial year, a statement of the amount of interest capitalised by the issuer and its subsidiaries during the year;

   1.  

      (k)     a statement as to the period unexpired of any service contract, which is not determinable by the employer within 1 year without payment of compensation (other than any statutory compensation), of any director proposed for election at the forthcoming annual general meeting or, if there are no service contracts, a statement of that fact;

   1.  

      (l)     summary particulars of any contract of significance subsisting during or at the end of the financial year in which a director of the issuer is or was materially interested, either directly or indirectly, or if there has been no such contract, a statement of that fact;

   1.  

      (m)     summary particulars of any contract of significance between the issuer, or one of its subsidiary companies, and a controlling shareholder or any of its subsidiaries;

   1.  

      (n)     summary particulars of any contract of significance for the provision of services to the issuer and its subsidiaries by a controlling shareholder or any of its subsidiaries;

   1.  

      (o)     a summary, in the form of a comparative table, of the results and of the assets and liabilities of the issuer and its subsidiaries, for the last 5 financial years, with any necessary explanations or adjustments for changes in capital to make the figures fully comparable one year with another; and

   1.  

      (p)     any other material information.

6.   Interim reports

1.  

   (1)   The issuer shall prepare in respect of the first 3 months of each financial year of the issuer, unless that financial year is of 6 months or less, an interim report containing the information required by subregulation (2) and, not later than 30 days after the end of that period of 3 months, the issuer shall—

   1.  

      (a)     publish in a newspaper, having a national circulation an announcement containing the information required by subregulation (2) to be contained in the interim report, the day after approval by or on behalf of the board;

   1.  

      (b)     supply the Commission immediately on publication with the names of the relevant newspaper and the date of the publication; and

   1.  

      (c)     as soon as reasonably practicable after such publication, send to the securities exchange and to every member and holder of its securities a copy of the interim report.

1.  

   (2)   Each interim report referred to in subregulation (1) shall contain at least the following information stated in respect of the issuer and its subsidiaries—

   1.  

      (a)     turnover;

   1.  

      (b)     profit (or loss) before taxation and extraordinary items with separate disclosure of any items included which are exceptional because of size or incidence;

   1.  

      (c)     taxation on profits and the basis of computation;

   1.  

      (d)     profit attributable to minority interests;

   1.  

      (e)     profit attributable to shareholders before extraordinary items;

   1.  

      (f)     extraordinary items (net of taxation);

   1.  

      (g)     profit attributable to shareholders;

   1.  

      (i)     amount of dividend paid or proposed on each class of shares (with particulars of each such class) and the amounts absorbed thereby (or an appropriate negative statement);

   1.  

      (j)     transfers to and from reserves;

   1.  

      (k)     earnings per share calculated on the basis of profits before extraordinary items;

   1.  

      (l)     comparative figures of the matters specified in (a) to (j) inclusive for the corresponding previous period; and

   1.  

      (m)     a statement as at the end of the 6 monthly period showing the interests of each director and chief executive of the issuer, and of their associates in so far as is known or may be ascertained after reasonable enquiry, in the share capital of the issuer and its subsidiaries; the statement shall distinguish between beneficial and non-beneficial interests, and specify the company in which shares are held and the number of such shares.

1.  

   (3)   If the accounting information given in an interim report has not been audited that fact must be stated and if the issuer's auditor has audited the accounting information contained in an interim report, that report including any qualifications shall be set out in the interim report.

1.  

   (4)   Any preliminary announcement of results for the full year shall also contain the information required by subregulation (2).

7.   Acquisition or disposal of assets

1.  

   (1)   In the case of—

   1.  

      (a)     an acquisition or disposal of assets by the issuer or any of its subsidiaries where—

      1.  

         (i)     the assets being acquired or disposed of represent an amount in excess of 15% of the value of the issuer's assets or consolidated assets, as the case may be, as disclosed in the last audited accounts,

      1.  

         (ii)     the assets are acquired from or disposed of to any of the issuer's or its subsidiaries' directors or chief executive, or any associate of such director or chief executive, or

      1.  

         (iii)     the assets being acquired or disposed of are an interest in any company of which a substantial shareholder is a director or chief executive of the issuer or any subsidiary, or any associate of the director or chief executive;

   1.  

      (b)     any disposal of assets by the issuer or any of its subsidiaries where the net profit before taxation earned by the assets which are the subject of the disposal is in excess of 15% of the issuer's consolidated pre-tax profit disclosed in the last audited accounts,

1.  

   the issuer shall comply with the disclosure requirements of subregulation (2).

1.  

   (2)   Where subregulation (1) applies, the issuer shall notify the securities exchange, the Commission and every member and holder of its securities without delay of the transaction including the following details—

   1.  

      (a)     the date of the transaction and the parties;

   1.  

      (b)     a general description of the nature of the assets and, if these are shares in whole or part, the name and general description of the activities of the company in which the shares are or were held;

   1.  

      (c)     the total consideration and other material terms;

   1.  

      (d)     in the case of a transaction referred to in subregulation (1)(a)(i) or (1)(b)—

      1.  

         (i)     the basis of the valuation placed on the assets at the time of acquisition or disposal, and

      1.  

         (ii)     in the case of a disposal, the excess or deficit of the proceeds over or under the book value;

   1.  

      (e)     in the case of a transaction referred to in subregulation (1)(a)(ii) or (iii), the name of the director, or chief executive or associate concerned and—

      1.  

         (i)     in the case of a director or chief executive, the office held,

      1.  

         (ii)     in the case of an associate of a director or the chief executive, the nature of the relationship and the name of that director or chief executive and the office held.

8.   Transactions with related companies where the issuer is a subsidiary

1.  

   (1)   Where a transaction specified in subregulation (2) takes place between—

   1.  

      (a)     the issuer and its holding company;

   1.  

      (b)     the issuer and any subsidiary of its holding company other than a subsidiary of the issuer;

   1.  

      (c)     a subsidiary of the issuer, and the holding company of the issuer; or

   1.  

      (d)     a subsidiary of the issuer and any subsidiary of its holding company other than the issuer or any of its subsidiaries,

1.  

   the issuer shall comply with the disclosure requirements of subregulation (3).

1.  

   (2)   For the purpose of this regulation, “transaction” means—

   1.  

      (a)     an arrangement or agreement where the issuer directly or indirectly grants a loan or gives other financial assistance;

   1.  

      (b)     an arrangement or agreement where the issuer provides security, whether by guarantee or otherwise, for the discharge of an obligation; or

   1.  

      (c)     a transaction other than in the ordinary course of business.

1.  

   (3)   Where subregulation (1) applies, the issuer shall notify the securities exchange, the Commission and every member and holder of its securities without delay of the transaction including the following details—

   1.  

      (a)     the date of the transaction and the parties; and

   1.  

      (b)     the general nature of the transaction and, where the transaction involves the making of a loan, the giving of financial assistance or the giving of any security, its amount or value.

9.   Prescribed information to shareholders

An issuer shall ensure that all the necessary facilities and information are available to enable holders of its listed securities to exercise their rights and, in particular shall—

1.  

   (a)     publish, in a newspaper having a national circulation, notice of every general meeting;

1.  

   (b)     inform holders of securities of the holding of meetings which they are entitled to attend;

1.  

   (c)     enable them to exercise their right to vote, where applicable;

1.  

   (d)     publish notices or distribute circulars giving information on—

   1.  

      (i)     the allocation and payment of dividends and interest,

   1.  

      (ii)     the issue of new securities, including arrangements for the allotment, subscription, renunciation, conversion or exchange of the securities, and

   1.  

      (iii)     redemption or repayment of the securities.

10.   Board meetings

The date fixed for a board meeting at which decisions on dividends, the annual results or the half-yearly report are expected to be made or at which any announcement of such matters is to be approved shall be notified to the securities exchange at least 10 days in advance.

11.   Board decisions

The issuer shall inform the securities exchange and the Commission immediately after approval by or on behalf of the board of—

1.  

   (a)     a decision to declare, recommend or pay any dividend or to make any other distribution on its securities, and the rate and amount of the dividend or other distribution;

1.  

   (b)     a decision not to declare, recommend or pay any dividend which would otherwise have been expected to have been declared, recommended or paid in due course;

1.  

   (c)     a preliminary announcement of profits or losses for any year, half-year or other period;

1.  

   (d)     a proposed change in the capital structure, including any redemption of its convertible securities; and

1.  

   (e)     a decision to change the general character or nature of the business of the issuer or its subsidiaries.

12.   Securities exchange and Commission to be notified of certain decisions

The issuer shall inform the securities exchange and the Commission immediately of any decisions made in regard to—

1.  

   (a)     an alteration to the issuer's constitution;

1.  

   (b)     a proposed change in its capital structure including the structure of its listed debt securities;

1.  

   (c)     a change in the rights attaching to any class of securities and a change in the rights attaching to any shares into which debt securities are convertible or exchangeable;

1.  

   (d)     any tender offers;

1.  

   (e)     a change in its directorate, auditor or chief executive; and

1.  

   (f)     bankruptcy or receivership.

13.   Basis of allotment

The issuer shall inform the securities exchange and the Commission of the basis of allotment of securities offered to the public for subscription or sale and of the results of any rights issue and, if applicable, of the basis of acceptance of excess applications, not later than the morning of the next business day after the allotment letters or other relevant documents of title are posted.

14.   Winding-up and liquidation

1.  

   (1)   The issuer shall inform the securities exchange and the Commission on the happening of any of the following events as soon as it comes to the attention of the issuer—

   1.  

      (a)     the presentation of any winding-up petition, or equivalent application in the country of incorporation or other establishment, or the making of any winding-up order or the appointment of a provisional liquidator in respect of the issuer, its holding company or any major subsidiary;

   1.  

      (b)     the passing of any resolution by the issuer, its holding company or any major subsidiary that it be wound-up by way of members' or creditors' voluntary winding-up;

   1.  

      (c)     the entry into possession of or the sale by any mortgagee of a portion of the issuer's assets which in aggregate value represents an amount in excess of 15% of the consolidated net tangible assets of the group; or

   1.  

      (d)     the making of any judgement, declaration or order by a court or tribunal of competent jurisdiction whether on appeal or at first instance, which may adversely affect the issuer's enjoyment of a portion of its assets which in aggregate value represents an amount in excess of 15% of the consolidated net tangible assets of the group.

1.  

   (2)   For the purposes of subregulation (1) a “major subsidiary” means a subsidiary representing 15% or more of the consolidated net tangible assets or pre-tax trading profits of the group.

15.   Commission may require information

1.  

   (1)   The Commission may, at any time, require an issuer—

   1.  

      (a)     to provide to it information in the form and within the time limit required by the Commission; and

   1.  

      (b)     to publish that information in the form and within the time the Commission considers appropriate for the purpose of protecting investors and maintaining the smooth operation of the market.

1.  

   (2)   If an issuer fails to comply with a requirement to publish information, the Commission may itself publish the information and may treat the non-compliance in any manner it deems fit.

PART 3
SANCTIONS

16.   Action against an issuer

1.  

   (1)   If the Commission considers that an issuer has contravened any of these Regulations, the Commission may do one or more of the following—

   1.  

      (a)     fine the issuer a sum not exceeding $100,000;

   1.  

      (b)     censure the issuer;

   1.  

      (c)     publish the fact that the issuer has been fined or censured for contravening these Regulations;

   1.  

      (d)     suspend trading in or discontinue the admission to dealing of the issuer's securities.

1.  

   (2)   In the event of an issuer being fined under subregulation (1)(a), the issuer must disclose details of the fine in its audited accounts relating to the period in which the fine is imposed.

1.  

   (3)   The Commission may, at any time, require an issuer—

   1.  

      (a)     to provide to it information in the form and within the time limit required by the Commission; and

   1.  

      (b)     to publish that information in the form and within the time the Commission considers appropriate for the purpose of protecting investors or maintaining a fair and orderly market in its securities.

1.  

   (4)   If an issuer fails to comply with a requirement to publish information, the Commission may itself publish the information.

17.   Action against a director

If the Commission considers that a contravention of these Regulations by an issuer is due to a failure by all or any of its directors to discharge their responsibilities, the Commission may, in addition to any action it may take against an issuer under regulation 16, do one or more of the following—

1.  

   (a)     fine the relevant directors a sum not exceeding $50,000;

1.  

   (b)     censure the relevant directors;

1.  

   (c)     publish the fact that these directors have been fined or censured;

1.  

   (d)     in the case of wilfull or persistent failure by a director to discharge his or her responsibilities, state publicly that in its opinion the retention of office by the director is prejudicial to the interests of investors;

1.  

   (e)     if the director remains in office following a public censure by the Commission under (d), suspend trading in or discontinue the admission to dealing of the issuer's securities.

18.   Notification of sanction

If the Commission proposes to take any of the steps described in regulation 16 or 17, unless the Commission considers that maintenance of an orderly market or the protection of investors otherwise requires, the Commission shall, in relation to the party concerned—

1.  

   (a)     give advance notice of the Commission's proposed action;

1.  

   (b)     invite the making of representations to the Commission either in writing or in person;

1.  

   (c)     advise of the decision as soon as practicable after it is made; and

1.  

   (d)     advise in writing of the reasons for any decision that is unfavourable.

Securities (Licences and Fees) Regulations

(Statutory Instrument 101/2001)

Statutory Instrument 101/2001 .. in force 20 October 2001

ARRANGEMENT OF REGULATIONS

PART 1
PRELIMINARY

PART 2
LICENCES

PART 3
OTHERS FEES

SECURITIES (LICENCES AND FEES) REGULATIONS

Commencement [20 October 2001]

PART 1
PRELIMINARY

1.   Citation

These Regulations may be cited as the Securities (Licences and Fees) Regulations.

2.   Interpretation

In these Regulations—

“financial year” means—

1.  

   (a)     the period of 12 months beginning with the day on which a licensee commences to carry out business in respect of which a licence has been granted; and

1.  

   (b)     each subsequent period of 12 months beginning with the day following the day an annual balance sheet of a licensee is prepared for the purpose of these Regulations; and

“licence” in relation to Parts 1 and 2, means a licence under Part 4 of the Act and “licensee” shall be construed accordingly.

PART 2
LICENCES

3.   Applications and notices

An application or a notice for any of the purposes described in the first column of Schedule 1 must be on the form as numbered in the second column of Schedule 1 and as set out in Schedule 2.

4.   Directions in forms

A form set out in Schedule 2 must be completed in accordance with any directions specified in the form.

5.   Manner of application for licence

1.  

   (1)   An application for a licence in the form set out in Schedule 2 together with any relevant annexures must be enclosed in a sealed envelope and filed with the Commission.

1.  

   (2)   Each application for a licence shall be accompanied by a detailed statement of the applicant's assets and liabilities signed by the applicant, or, in the case of an applicant which is a company

   1.  

      (a)     copies certified by a director of the company to be true copies of the last balance sheet and of the last profit and loss account (if any), incorporating the results of the last financial year, and which have respectively been audited by the company's auditors (including every document required by law to be annexed or attached);

   1.  

      (b)     a copy of the report of the auditors certified as required in (a); and

   1.  

      (c)     a copy of its memorandum and articles of association.

1.  

   (3)   The Commission may refuse to accept an application made under these Regulations if it is not accompanied by the application fee set out in Schedule 3.

6.   Alteration of facts disclosed in applications

An applicant for a licence shall give written notice to the Commission of—

1.  

   (a)     any proposed alteration to; or

1.  

   (b)     the occurrence of any event which the applicant knows affects or may affect in a material respect,

1.  

   information supplied by the applicant to the Commission in relation to the application, being a proposal or event made or occurring while the application is pending a decision by the Commission.

7.   Grant of Licence

The Commission on approval of an application for a licence, shall grant a licence to the applicant on payment by the applicant of the licence fees set out in Schedule 3.

8.   General conditions

It is a condition of every licence that—

1.  

   (a)     the licence is personal to the applicant and shall not be transferable;

1.  

   (b)     the applicant shall give written notice to the Commission of—

   1.  

      (i)     any proposed alteration to, or

   1.  

      (ii)     the occurrence of any event which the applicant knows affects or may affect in any material respect,

1.  

   any matter in respect of which the applicant was required to supply information to the Commission in the course of the application for that licence;

   1.  

      (c)     the consent of the Commission shall be obtained prior to—

      1.  

         (i)     the implementation of any alteration of the kind referred to in paragraph (b)(i), or

      1.  

         (ii)     the taking of action resulting from any event of the kind referred to in paragraph (b)(ii); and

   1.  

      (d)     a licensee only carries on the securities business permitted by the licence and from the premises specified in the licence.

9.   Renewal of Licence

On application for renewal of a licence, the Commission, if satisfied that the applicant has complied with the provisions of the Act and these Regulations, may grant the renewal on payment by the applicant of the annual renewal licence fee set out in Schedule 3.

10.   Replacement of licence

If the Commission is satisfied that a licence has been lost, destroyed or defaced, the Commission may replace the licence on payment by the licensee of the fee set out in Schedule 3.

11.   Display of licence

1.  

   (1)   Every holder of a licence granted under the Act must display the licence at all premises in which it transacts with the public the securities business authorised by the licence.

1.  

   (2)   The requirement in subregulation (1) shall not be satisfied unless the licence is displayed in a manner that is readily visible to the public.

12.   Change of employer by representative

A representative must not change the employer in relation to which the licence was issued unless a notice in accordance with Form 9 set out in Schedule 2 is lodged with the Commission.

PART 3
OTHERS FEES

13.   Securities exchange licence fee

1.  

   (1)   A company applying to the Commission for a securities exchange licence under the Act shall pay the application fee set out in Schedule 3.

1.  

   (2)   If the Commission is satisfied that the applicant has complied with the provisions of the Act it may grant a securities exchange licence on payment by the applicant of the licence fee set out in Schedule 3.

1.  

   (3)   If the Commission is satisfied that the applicant has complied with the provisions of the Act it may grant a securities exchange licence on payment by the applicant of the licence fee set out in Schedule 3.

1.  

   (4)   On application for renewal of a securities exchange licence the Commission may, if satisfied that the applicant has complied with the provisions of the Act, grant the renewal on payment by the applicant of the annual renewal licence fee set out in Schedule 3.

14.   Proposed rule change fee

A securities exchange shall, on submission to the Commission of a draft proposed amendment to its rules in accordance with the provisions of the Act, pay the fee set out in Schedule 3.

15.   Examination fee

An applicant, for a representative, principal or investment adviser licence that is required to take an examination shall pay the examination fee set out in Schedule 3.

16.   Clearing agency licence fee

1.  

   (1)   A person applying to the Commission for a clearing agency licence under the Act shall pay the application fee set out in Schedule 3.

1.  

   (2)   If the Commission is satisfied that the applicant has complied with the provisions of the Act, it may grant a clearing agency licence on payment by the applicant of the licence fee set out in Schedule 3.

1.  

   (3)   On application for renewal of a clearing agency licence the Commission may, if satisfied that the applicant has complied with the provisions of the Act, grant the renewal on payment by the applicant of the annual renewal licence fee set out in Schedule 3.

17.   Advertisement filing fee

A licensee or authorised person shall when sending a copy of an advertisement to the Commission under the Act and its regulations, pay the advertisement filing fee set out in Schedule 3.

18.   Self regulatory organisation fee

1.  

   (1)   A person applying to the Commission for a self regulatory organisation licence under the Act shall pay the application fee set out in Schedule 3.

1.  

   (2)   If the Commission is satisfied that the applicant has complied with the provisions of the Act, it may grant a self regulatory organisation licence on payment by the applicant of the licence fee set out in Schedule 3.

1.  

   (3)   On application for renewal of a self regulatory organisation licence the Commission may, if satisfied that the applicant has complied with the provisions of the Act, grant the renewal on payment by the applicant of the annual renewal licence fee set out in Schedule 3.

19.   Registration of corporate issuers fee

1.  

   (1)   An existing public company required to file a registration statement with the Commission under the provisions of the Act, shall pay the registration fee set out in Schedule 3.

1.  

   (2)   A company which proposes to issue securities to the public and is required to file a registration statement with the Commission under the provisions of the Act shall pay the registration fee set out in Schedule 3.

20.   Authorisation of collective investment scheme fee

1.  

   (1)   The Commission may, if it is satisfied that an application for the authorisation of a collective investment scheme is in accordance with the Act and the Securities (Collective Investment Scheme) Regulations, grant the authorisation of the scheme on payment by the applicant of the authorisation fee set out in Schedule 3.

1.  

   (2)   On application for renewal of the authorisation of a collective investment scheme, the Commission may, if satisfied that the applicant has complied with the Act and the Securities (Collective Investment Scheme) Regulations, grant the renewal on payment by the applicant of the annual renewal authorisation fee set out in Schedule 3.

1.  

   (3)   When making an application to the Commission for the authorisation of a collective investment scheme, the applicant shall pay the application for authorisation fee set out in Schedule 3.

21.   Waiver of fees

1.  

   (1)   If the Commission considers it appropriate in the exceptional circumstances of a particular case, the Commission may in its discretion waive payment of all or part of the fee which would otherwise be payable under these Regulations.

1.  

   (2)   If it appears to the Commission that, owing to the exceptional circumstances of a particular case, the retention by the Commission of a fee which has been paid would be inequitable, the Commission may in its discretion refund all or part of the fee.

Schedule 1

(Regulation 3)

LIST OF FORMS

Schedule 2

(Regulation 3)

FORM 1

FORM 2

FORM 3

FORM 4

FORM 5

FORM 6

FORM 7

FORM 8

FORM 9

Schedule 3

FEES

Securities (Collective Investment schemes) Regulations

(Statutory Instrument 103/2001)

Statutory Instrument 103/2001 .. in force 1 August 2004 (S.I. 54/2004)

ARRANGEMENT OF REGULATIONS

PART 1
PRELIMINARY

PART 2
ESTABLISHMENT OF COLLECTIVE INVESTMENT SCHEMES

PART 3
AUTHORISATION OF COLLECTIVE INVESTMENT SCHEMES

PART 4
CUSTODIAN

PART 5
MANAGEMENT COMPANIES

PART 6
AUDIT OF COLLECTIVE INVESTMENT SCHEMES

PART 7
COLLECTIVE INVESTMENT SCHEME PARTICULARS AND
FINANCIAL REPORTS

PART 8
GENERAL REQUIREMENTS

PART 9
RESTRICTIONS ON INVESTMENT POWERS OF COLLECTIVE INVESTMENT SCHEMES

SECURITIES (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS

Commencement [1 August 2004]

PART 1
PRELIMINARY

1.   Citation

These Regulations may be cited as the Securities (Collective Investment Schemes) Regulations.

2.   Interpretation

In these Regulations—

“appointed person” means a person duly appointed by the Commission to act under its authority for the purposes of an investigation;

“collective investment scheme” or “scheme” means collective investment scheme as defined in the Act;

“collective investment scheme particulars” means that document issued to the public containing information on a collective investment scheme calculated to invite offers by the public to subscribe for or purchase units in the collective investment scheme;

“custodian” means any person to whom the property of the scheme is entrusted for safekeeping;

“custodian agreement” means any agreement relating to the appointment and functions of the custodian to which the collective investment scheme and the custodian are parties;

“formation documents” means in the case of a unit trust, the trust deed, and in the case of an investment company, its articles of incorporation, together with the management contract and the custodian agreement;

“investment adviser,” in relation to a collective investment scheme, means a person who is engaged by the management or investment company under a commercial arrangement not being a mere contract of employment to supply the company with advice as to the merit of investment opportunities or information relevant to the making of judgments about the merits of investment opportunities;

“management company”, in relation to a collective investment scheme, means the management company appointed by the management contract;

“management contract” means any agreement relating to the appointment and functions of a management company to which the collective investment scheme and the management company are parties;

“participants” means the persons who participate in a collective investment scheme, and includes members of an investment company.

PART 2
ESTABLISHMENT OF COLLECTIVE INVESTMENT SCHEMES

3.   Unit trusts

A collective investment scheme that is a unit trust shall be established by its scheme rules and shall provide for the matters specified in Schedule 1.

4.   Investment companies

A collective investment scheme that is an investment company shall be established by its memorandum and articles of incorporation and shall provide for the matters specified in Schedule 2.

PART 3
AUTHORISATION OF COLLECTIVE INVESTMENT SCHEMES

5.   Application for authorisation

1.  

   (1)   An application to the Commission for the authorisation of a collective investment scheme shall be made jointly by the management or proposed management company and the custodian or proposed custodian of the scheme.

1.  

   (2)   An application must contain the information specified in Schedule 3. An application must be accompanied by the following—

   1.  

      (a)     the collective investment scheme's formation documents;

   1.  

      (b)     the collective investment scheme particulars;

   1.  

      (c)     the management company's latest audited report;

   1.  

      (d)     the custodian's latest audited report; and

   1.  

      (e)     the application fee specified in Schedule 3 to the Securities (Licences and Fees) Regulations.

1.  

   (3)   The Commission may require the applicant to furnish additional information.

6.   Conditions for authorisation

1.  

   (1)   Subject to the provisions of these Regulations, the Commission may only authorise a unit trust under regulation 7 if it satisfies each of the following conditions—

   1.  

      (a)     it is established under the laws of Saint Lucia;

   1.  

      (b)     it has both a management company and a custodian;

   1.  

      (c)     the management company is incorporated or registered in Saint Lucia;

   1.  

      (d)     the custodian is incorporated or registered in Saint Lucia;

   1.  

      (e)     the management company and the custodian are different persons who are independent of each other;

   1.  

      (f)     the management company and the custodian are each licensed by the Commission to act respectively as such in relation to collective investment schemes;

   1.  

      (g)     the formation documents and collective investment scheme particulars comply with the relevant provisions of these Regulations and are in a form acceptable to the Commission;

   1.  

      (h)     the name is approved by the Commission;

   1.  

      (i)     the participants are entitled to have their units redeemed in accordance with the formation documents at a price related to the net value of the property to which the units relate and determined in accordance with the formation documents; and

   1.  

      (j)     the management company has appointed an auditor who has the approval of the custodian and who complies with the requirements of regulation 32.

1.  

   (2)   A unit trust shall be treated as complying with subregulation (1)(i) if it requires the management company to ensure that a participant is able to sell his or her units on a licensed securities market at a price not significantly different from that mentioned in subregulation (1)(i).

1.  

   (3)   Subject to the provisions of these Regulations, the Commission may only authorise an investment company under regulation 7 if it satisfies each of the following conditions—

   1.  

      (a)     it is incorporated under the laws of Saint Lucia;

   1.  

      (b)     it has a minimum paid-up capital of EC$1,500,000;

   1.  

      (c)     the directors of the company are of good repute and satisfy the Commission that they possess the necessary experience and expertise for the performance of their duties;

   1.  

      (d)     it has both a management company and a custodian;

   1.  

      (e)     the management company is incorporated or registered in Saint Lucia;

   1.  

      (f)     the custodian of the collective investment scheme is incorporated or registered in Saint Lucia;

   1.  

      (g)     the management company and the custodian are different persons who are independent of each other;

   1.  

      (h)     the management company and the custodian are licensed by the Commission to act as such in relation to collective investment schemes;

   1.  

      (i)     its formation documents and collective investment scheme particulars comply with the relevant provisions of these Regulations and are in a form acceptable to the Commission;

   1.  

      (j)     the name of the company is acceptable to the Commission; and

   1.  

      (k)     it has appointed an auditor who has the approval of the custodian and who complies with the requirements of regulation 32.

7.   Authorisation by Commission

1.  

   (1)   The Commission may, on an application made in accordance with regulation 5, authorise a collective investment scheme for the purposes of these Regulations if—

   1.  

      (a)     the conditions of regulation 6 are satisfied; and

   1.  

      (b)     the Commission has received the fee specified in the Securities (Licences and Fees) Regulations.

1.  

   (2)   An authorisation under subregulation (1) may be granted subject to the terms and conditions the Commission considers necessary or desirable for the protection of participants.

1.  

   (3)   The Commission shall inform the applicant of its decision on the application not later than 3 months after the date on which the application was received or, if within that period the Commission has required the applicant to furnish further information in connection with the application, from the date on which that information is furnished.

1.  

   (4)   If the Commission does not notify the applicant of its decision within the time required by subregulation (3), it shall be taken to have refused the application.

8.   Representations against refusal or revocation

1.  

   (1)   Before the Commission—

   1.  

      (a)     refuses an application for authorisation; or

   1.  

      (b)     revokes an authorisation,

1.  

   it shall give the applicant written notice of its intention to do so, stating its reasons and the rights of the applicant under subregulation (2).

1.  

   (2)   A person on whom a notice is served under subregulation (1) may, within 21 days of its receipt, make written representation to the Commission.

1.  

   (3)   The Commission shall have regard to any representation made in accordance with subregulation (2) in determining whether to refuse the application or revoke the authorisation.

9.   Property of collective investment scheme to be held by custodian

The custodian shall hold the property of a collective investment scheme on behalf of the participants.

10.   Changes of management company or custodian

1.  

   (1)   The management company shall give written notice to the Commission of any proposal to replace the custodian of the collective investment scheme.

1.  

   (2)   The custodian of a collective investment scheme shall give written notice to the Commission of any proposal to replace the management company of the collective investment scheme.

1.  

   (3)   Effect shall not be given to any such proposal unless—

   1.  

      (a)     the Commission has given its approval to the proposal; or

   1.  

      (b)     one month has elapsed since the date on which notice was given under subregulation (1) or (2) without the Commission having notified the management company or the custodian that the proposal is not approved.

1.  

   (4)   Neither the management company nor the custodian shall be replaced except by persons who satisfy the requirements of these Regulations.

11.   Avoidance of exclusion clauses

If a provision in the formation documents of a collective investment scheme has the effect of exempting the management company or custodian from liability for any failure to exercise due care and diligence in the discharge of their functions in respect of the collective investment scheme it shall be null and void.

12.   Directions by Commission

1.  

   (1)   If it appears to the Commission that—

   1.  

      (a)     any requirement for the authorisation of a collective investment scheme is no longer satisfied;

   1.  

      (b)     the exercise of the power conferred by this regulation is desirable in the interests of participants or potential participants in the collective investment scheme; or

   1.  

      (c)     the management company or custodian of the collective investment scheme has contravened any provision of these Regulations or, in purported compliance with any such provision, has furnished the Commission with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under these Regulations,

1.  

   the Commission may give a direction under subregulation (2).

1.  

   (2)   A direction under this regulation may—

   1.  

      (a)     require the management company of the collective investment scheme to cease the issue or redemption, or both the issue and redemption, of units under the collective investment scheme on a date specified in the direction until a further date as specified in that or another direction;

   1.  

      (b)     require the management company and custodian of the collective investment scheme to wind it up by a date specified in the direction or, if no date is specified, as soon as is practicable.

1.  

   (3)   A management company or custodian which fails to comply with a direction under subregulation (2) commits an offence and is liable on conviction to a fine not exceeding $1,000.

13.   Investigations

1.  

   (1)   The Commission may investigate the affairs of any collective investment scheme, the management company or custodian if it appears to the Commission that it is in the interests of the participants to do so or that the matter is of public concern.

1.  

   (2)   For the purposes of an investigation under subregulation (1) the Commission, or an appointed person, may require the collective investment scheme, management company or custodian—

   1.  

      (a)     to afford the Commission or appointed person access to its books, accounts and documents;

   1.  

      (b)     to produce its books, accounts and documents and give any information and afford the use of any facilities that may be required for the investigation; and

   1.  

      (c)     to attend before the Commission at a specified time and place, and to answer questions or otherwise furnish information appearing to the Commission to be relevant to the investigation.

1.  

   (3)   A person who fails, without reasonable excuse, to comply with the requirements of the Commission or an appointed person under subregulation (2) commits an offence and is liable on conviction to a fine not exceeding $50,000.

PART 4
CUSTODIAN

14.   Appointment of custodian

Every collective investment scheme for which authorisation is requested shall appoint a custodian that has been licensed by the Commission to act as a custodian of collective investment schemes.

15.   Eligibility to be a custodian

1.  

   (1)   A custodian shall be a body corporate which is—

   1.  

      (a)     a bank licensed under the Banking Act;

   1.  

      (b)     a trust company which is a subsidiary of such a bank; or

   1.  

      (c)     a company other than a company referred to under paragraph (b) that has a minimum issued and paid up capital of $250,000 and the Commission is satisfied that the company has sufficient financial resources and experience necessary to enable it effectively to conduct its business and to carry out its obligations as a custodian.

1.  

   (2)   A custodian shall be independently audited.

16.   Custody of property

1.  

   (1)   The custodian of a collective investment scheme shall take into its custody for safe keeping the property of the collective investment scheme by means of an agreement between the custodian and the management company in which the custodian accepts custodianship of the collective investment scheme property and agrees to observe the provisions of the formation documents and the custodian agreement.

1.  

   (2)   The custodian shall hold and deal with the property in accordance with the provisions of these Regulations and the formation documents of the collective investment scheme.

17.   General duties of custodian

1.  

   (1)   The custodian shall act solely in the interests of the participants in the performance of its duties.

1.  

   (2)   The custodian shall take reasonable care to ensure that the collective investment scheme is managed by the management company in accordance with these Regulations and the formation documents of the collective investment scheme, and shall ensure that—

   1.  

      (a)     the property of the collective investment scheme is invested and its income is applied, in accordance with these Regulations and the formation documents;

   1.  

      (b)     the value of the units is calculated by the management company or investment company, as the case may be;

   1.  

      (c)     the sale, issue, repurchase, redemption and cancellation of units are carried out.

1.  

   (3)   The custodian shall ensure that the methods adopted by the management company in calculating the value of units are adequate to ensure that the sale, issue, repurchase, redemption and cancellation prices are calculated in accordance with these Regulations and of the formation documents.

1.  

   (4)   The custodian shall—

   1.  

      (a)     carry out the instructions of the management company in respect of investments unless they are in conflict with the provisions of the collective investment scheme particulars or formation documents;

   1.  

      (b)     take reasonable care to ensure that any investment and borrowing limitations set out in these Regulations and the formation documents, and the conditions under which the collective investment scheme was authorised, are complied with;

   1.  

      (c)     issue a report to the participants to be included in the annual report on whether in the custodian's opinion the management company has in all material respects managed the collective investment scheme in accordance with these Regulations and of the formation documents; if the management company has not done so, the respects in which it has not done so and the steps which the custodian has taken in respect thereof;

   1.  

      (d)     take reasonable care to ensure that unit certificates are not issued until subscription monies have been paid;

   1.  

      (e)     ensure that any registrable investments which are held for participants in the collective investment scheme are properly registered in the names of the participants or, with the consent of the participants, in the name of an eligible nominee; and

   1.  

      (f)     where title to investments is recorded electronically, ensure that entitlements are separately identified from those of the management company of the collective investment scheme in the records of the person maintaining records of entitlement.

18.   Instructions from management company

The custodian shall carry out the instructions of the management company unless it has reasonable cause to believe that to do so would contravene regulation 17.

19.   Change of address

A custodian shall notify the Commission in writing of any intended change of address of its registered office or permanent place of business in Saint Lucia.

20.   Liability of custodian

The custodian shall be liable to the management company and to the participants for any loss suffered by them as a result of—

1.  

   (a)     any unjustifiable failure by it to perform its obligations; or

1.  

   (b)     the improper performance by it of its obligations.

21.   Register of participants

1.  

   (1)   The custodian shall establish and maintain a register of the participants of the collective investment scheme in a form determined by the Commission.

1.  

   (2)   The custodian may, with the prior approval of the Commission, appoint some other person to establish and maintain the register on its behalf.

1.  

   (3)   The register may be formed, in whole or in part, of records maintained by a securities depository approved by the Commission.

1.  

   (4)   The register shall be conclusive evidence as to the persons entitled to the units respectively standing in their name.

22.   Notification of contraventions

The custodian shall notify the Commission in writing after becoming aware of the matter, of any failure, act or omission of the management company constituting a breach or contravention of any of the provisions of these Regulations or of the formation documents of the collective investment scheme and of the steps taken by it to ensure that the breach or contravention is rectified as soon as is reasonably practicable.

PART 5
MANAGEMENT COMPANIES

23.   Appointment of management company

1.  

   (1)   Subject to subregulation (2) every collective investment scheme for which authorisation is requested shall appoint a management company that has been licensed by the Commission to act as a management company of collective investment schemes.

1.  

   (2)   In the case of an investment company the Commission may in its discretion permit it to be managed by its own board of directors, in these Regulations referred to as a self-managed scheme, who are to perform the functions of a management company.

1.  

   (3)   Where the Commission permits an investment company to be a self-managed scheme under subregulation (2), references in these Regulations to a management company or the directors of a management company shall be deemed to be references to the directors of the self-managed scheme.

1.  

   (4)   The directors of a self-managed scheme are prohibited from dealing with the scheme as principals.

1.  

   (5)   In addition to compliance with regulation 51, the articles of association of a self-managed scheme shall contain the following provisions—

   1.  

      (a)     that participants may convene a meeting and, by way of an ordinary resolution, remove any director considered no longer fit and proper to manage the property of the scheme; and

   1.  

      (b)     that the directors' fees and remuneration shall be fixed by the participants at a general meeting.

24.   Eligibility to be a management company

1.  

   (1)   A management company shall be a body corporate which—

   1.  

      (a)     is engaged solely in the business of collective investment scheme management;

   1.  

      (b)     has sufficient financial resources at its disposal to enable it to conduct its business effectively and meet its liabilities; and

   1.  

      (c)     shall maintain at all times a net asset position.

1.  

   (2)   A management company shall have a minimum paid-up capital of $250,000.

25.   Qualifications of directors

1.  

   (1)   The directors of the management company must be of good repute and in the opinion of the Commission possess the necessary experience for the performance of their duties.

1.  

   (2)   In determining the acceptability of the management company, the Commission may also consider the qualifications and experience of persons employed by the management company.

26.   General duties of management company

The management company shall in the performance of its duties act solely in the interests of participants and take reasonable care to protect those interests, and in particular shall—

1.  

   (a)     manage the property of the collective investment scheme in accordance with—

   1.  

      (i)     the provisions of these Regulations,

   1.  

      (ii)     the formation documents,

   1.  

      (iii)     the most recently published collective investment scheme particulars,

   1.  

      (iv)     in the case of an investment company where the formation documents provide that the directors of the company may give directions, any directions from time to time so given by the directors of the company which are consistent with the provisions of subparagraphs (i), (ii) and (iii);

1.  

   (b)     take all reasonable steps and exercise all due diligence to avoid the property of the collective investment scheme being invested in contravention of these Regulations;

1.  

   (c)     have prepared in the prescribed form the accounts required by regulation 37 and shall arrange for such accounts to be audited in accordance with regulation 33;

1.  

   (d)     ensure that the formation documents are made available for inspection by the public in Saint Lucia free of charge at all times during normal office hours, and make copies of such documents available upon the payment of a reasonable fee.

27.   Restrictions on activities of management company

The management company of a collective investment scheme shall not engage in any activity other than the management of collective investment schemes.

28.   Change of address

A management company shall notify the Commission in writing of any intended change of address of its registered office or permanent place of business in Saint Lucia.

29.   Liability of management company

The management company is liable to the participants for any loss suffered by them as a result of—

1.  

   (a)     any unjustifiable failure by it to perform its obligations; or

1.  

   (b)     the improper performance by it of its obligations.

30.   Requests to management company and investment adviser

The management company and any investment adviser appointed by the management company shall—

1.  

   (a)     at the request of the custodian supply the custodian with such information concerning the administration of the collective investment scheme as it may reasonably require; and

1.  

   (b)     comply with any directions given by the custodian for the purpose of satisfying regulation 17.

31.   Units held by management company

1.  

   (1)   The management company shall keep a daily record of units held by it, distinguishing between different types of unit and showing all acquisitions and disposals by the management company and the balance thereof.

1.  

   (2)   The management company shall make the daily record available for inspection by the custodian during normal office hours and likewise supply to the custodian a copy of the record or any part of it on request.

PART 6
AUDIT OF COLLECTIVE INVESTMENT SCHEMES

32.   Appointment and qualifications of auditor

1.  

   (1)   The auditor of a collective investment scheme shall—

   1.  

      (a)     have a place of business in Saint Lucia;

   1.  

      (b)     be an accountant;

   1.  

      (c)     not be a director or controller of the custodian, or the management company of the collective investment scheme or, in the case of an investment company, a director or controller of the company, or a partner, employee or shareholder of such a person; and

   1.  

      (d)     be approved by the Commission.

1.  

   (2)   An auditor shall cease to hold appointment as auditor of a collective investment scheme if the auditor ceases to fulfill any of the requirements of subregulation (1), or if the Commission withdraws its approval or if the management company with the approval of the custodian, revokes the appointment.

1.  

   (3)   In the event that the management company revokes the appointment of the auditor the company shall notify the Commission of the revocation and of the reasons for it.

1.  

   (4)   In the event of a vacancy the management company shall as soon as practicable make a new appointment of an auditor who has the approval of the custodian.

33.   Audit of accounts

The auditor shall audit the accounts required to be included in the annual report by regulation 37 and shall—

1.  

   (a)     carry out the duties of an auditor generally in accordance with international auditing standards; and

1.  

   (b)     in his or her report state whether or not in his or her opinion the accounts give a true and fair view of the financial position of the collective investment scheme as at the end of the accounting period to which they relate.

34.   Communication with Commission

No duty to which an auditor of a collective investment scheme is subject shall be regarded as contravened by reason of his or her communicating in good faith to the Commission, whether or not in response to a request from the Commission, any information or opinion on a matter of which the auditor has become aware in his or her capacity as auditor of the collective investment scheme and which is relevant to any function of the Commission under these Regulations.

PART 7
COLLECTIVE INVESTMENT SCHEME PARTICULARS AND FINANCIAL REPORTS

35.   Documents to be prepared and published by management companies

1.  

   (1)   The management company of a collective investment scheme shall prepare and publish in accordance with the provisions of this Part the following documents relating to that collective investment scheme—

   1.  

      (a)     the collective investment scheme particulars;

   1.  

      (b)     an annual report for each financial year; and

   1.  

      (c)     a half-yearly report covering the first 6 months of each financial year.

1.  

   (2)   The annual and half-yearly reports shall be published not later than 4 months and 2 months respectively from the end of the accounting period to which they relate.

36.   Contents of collective investment scheme particulars

1.  

   (1)   For the purposes of this Part, the formation documents of a collective investment scheme shall form an integral part of the collective investment scheme particulars and shall, except as provided for by subregulation (3) be annexed thereto.

1.  

   (2)   The collective investment scheme particulars shall include—

   1.  

      (a)     particulars of the matters specified in Schedule 4, in so far as that information does not appear in the formation documents; and

   1.  

      (b)     any further information that may be necessary to enable participants to make an informed judgement as to the investment proposed.

1.  

   (3)   Despite subregulation (1), the formation documents need not be annexed to the collective investment scheme particulars if participants and potential participants are informed by the collective investment scheme particulars—

   1.  

      (a)     that the formation documents will be sent to them free of charge on request; or

   1.  

      (b)     of the place in Saint Lucia where the documents are available for inspection free of charge.

1.  

   (4)   The collective investment scheme particulars shall be revised at least once in every 12 months but, if any significant change occurs in the matters stated therein or any significant new matter arises which ought to be stated therein before the collective investment scheme particulars are due for such an annual revision, they shall be revised immediately that change occurs or new matter arises so far as is necessary to take account of that change or matter.

37.   Contents of annual and half-yearly reports

1.  

   (1)   The annual report of a collective investment scheme shall include—

   1.  

      (a)     a statement of assets and liabilities;

   1.  

      (b)     an income and distribution account;

   1.  

      (c)     a capital account;

   1.  

      (d)     a copy of the report of the auditor of the collective investment scheme on the above-mentioned accounts including any qualifications made by the auditor;

   1.  

      (e)     a report by the management company to the participants on the activities of the collective investment scheme during the financial year; and

   1.  

      (f)     a copy of the report by the custodian to the participants as to the manner in which the collective investment scheme has been managed during the financial year.

1.  

   (2)   The financial accounts referred to in subregulation (1)(a), (1)(b) and (1)(c) shall comply with the requirements of Schedule 5.

1.  

   (3)   The reports referred to in subregulation (1)(d), (1)(e) and (1)(f) shall comply with the requirements of Schedule 6.

1.  

   (4)   The auditor and the custodian shall deliver their reports to the management company or investment company in good time to enable them to include them in the annual report.

1.  

   (5)   A half-yearly report shall include the matters specified in Parts A and B of Schedule 6.

38.   Publication of collective investment scheme particulars and reports

1.  

   (1)   The management company of a collective investment scheme shall send to the Commission a copy of the collective investment scheme particulars (including any revision) and of every annual and half-yearly report of the collective investment scheme.

1.  

   (2)   The management company shall supply to the Commission, on request, all information relevant to the collective investment scheme's reports and accounts.

1.  

   (3)   Any advertisement or other information promoting a collective investment scheme in Saint Lucia shall indicate that collective investment scheme particulars exist and the places where those particulars may be obtained by members of the public.

1.  

   (4)   The management company shall not effect a sale of units in the collective investment scheme to any person unless it has offered to that person free of charge a copy of—

   1.  

      (a)     the collective investment scheme particulars;

   1.  

      (b)     the most recent annual report (if any); and

   1.  

      (c)     any subsequent half-yearly report.

1.  

   (5)   The management company shall make copies of—

   1.  

      (a)     the collective investment scheme particulars;

   1.  

      (b)     the formation documents (if not annexed to the collective investment scheme particulars); and

   1.  

      (c)     the annual and half-yearly reports,

1.  

   available for inspection by any member of the public free of charge during ordinary office hours at its principal place of business in Saint Lucia and at any other place specified in the collective investment scheme particulars.

1.  

   (6)   The management company shall, at the request of any participant in the collective investment scheme, supply to that person free of charge a copy of the most recent collective investment scheme particulars, annual report and any subsequent half-yearly report.

PART 8
GENERAL REQUIREMENTS

39.   Publication of prices

The management company shall—

1.  

   (a)     in a manner approved by the Commission, publish the issue, sale, repurchase and redemption prices of units in the collective investment scheme on each day that it holds itself out as willing to issue, sell, repurchase or redeem the units; and

1.  

   (b)     in any event, publish the prices at least twice a month unless the Commission authorises a reduction of the frequency to once a month if such a reduction will not prejudice the interests of participants.

40.   Units and accumulation units

1.  

   (1)   The interests of participants in a collective investment scheme shall consist of units and each unit shall be treated as representing one undivided share in the capital property of the collective investment scheme.

1.  

   (2)   Where accumulation units are in existence, any accumulation units issued otherwise than in pursuance of the initial offer shall, when issued, each represent the same number (including fractions) of undivided shares in the capital property of the collective investment scheme as each other accumulation unit then in existence.

41.   Payments out of and into the property of a collective investment scheme

1.  

   (1)   The following expenses only may be paid out of the property of a collective investment scheme—

   1.  

      (a)     the costs of dealing in the property of the collective investment scheme;

   1.  

      (b)     interest on borrowings permitted under the collective investment scheme and charges incurred in effecting or varying the terms of such borrowings;

   1.  

      (c)     the costs and expenses incurred in obtaining a listing of the units of the collective investment scheme on any licensed securities exchange;

   1.  

      (d)     taxation and duties payable in respect of the property of the collective investment scheme, the formation documents of the collective investment scheme and the creation and sale of units;

   1.  

      (e)     any costs incurred in modifying the formation documents of the collective investment scheme;

   1.  

      (f)     any costs incurred in the preparation and publication of the collective investment scheme particulars and of any amended or supplementary particulars;

   1.  

      (g)     any costs incurred in respect of meetings of the participants;

   1.  

      (h)     any periodic charge payable to the management company;

   1.  

      (i)     the fees of the custodian;

   1.  

      (j)     any expenses or disbursements of the custodian which are authorised by the formation documents of the collective investment scheme to be paid out of the property of the collective investment scheme;

   1.  

      (k)     the fees and expenses of the auditor;

   1.  

      (l)     the costs incurred in respect of the distribution of income to participants;

   1.  

      (m)     the costs incurred in respect of the printing and posting of certificates;

   1.  

      (n)     the costs incurred in keeping the register;

   1.  

      (o)     costs reasonably incurred in respect of the publication of prices of units and in respect of the publication and distribution of the collective investment scheme particulars, annual and interim reports and accounts;

   1.  

      (p)     the costs incurred in the establishment of the collective investment scheme as stated in the collective investment scheme particulars, amortised over the period, not exceeding 5 years, specified in those particulars;

   1.  

      (q)     the costs incurred by the management company and permitted by the formation documents; and

   1.  

      (r)     any fees payable to the Commission.

1.  

   (2)   All payments or repayments of an income nature properly payable out of or into the property of a collective investment scheme shall be paid out of or into the income property of the collective investment scheme.

1.  

   (3)   All payments or repayments of a capital nature properly payable out of or into the property of a collective investment scheme shall be payable out of or into the capital property of the collective investment scheme.

1.  

   (4)   All payments of an income nature properly payable out of the property of a collective investment scheme shall, to the extent that the income property of the collective investment scheme is insufficient to meet them when they fall due for payment, be paid out of the capital property of the collective investment scheme.

42.   Creation, etc. of units, repurchases and redemptions

1.  

   (1)   The formation documents of a collective investment scheme shall provide for the creation, cancellation, sale, repurchase and redemption of units, the valuation of the property of the collective investment scheme and the calculation of the sale, issue, repurchase and redemption prices of units.

1.  

   (2)   Subject to this regulation, a participant in a collective investment scheme shall be entitled to have his or her units repurchased or redeemed in accordance with the terms of the formation documents of the collective investment scheme at a price related to the net value of the property to which the units relate and determined in accordance with those terms.

1.  

   (3)   A collective investment scheme shall be treated as complying with subregulation (2) if the formation documents require the management or investment company to ensure that a participant is able to sell his or her units on a licensed securities market at a price not significantly different from that mentioned in subregulation (2).

1.  

   (4)   The management company—

   1.  

      (a)     may, with the prior agreement of the custodian of the collective investment scheme; or

   1.  

      (b)     shall, if the custodian of the collective investment scheme so requires,

1.  

   suspend the repurchase or redemption of units at any time for a period not exceeding 30 days, if it or the custodian is of the opinion that there is good and sufficient reason to so suspend the repurchase or redemption of units having regard to the interests of the participants.

1.  

   (5)   The management company shall give notice in writing of any suspension under subregulation (4), stating the reasons for the suspension, to the Commission.

1.  

   (6)   The Commission may by notice in writing to the management company require it to suspend the repurchase or redemption of units for a period specified in the notice, if the Commission is satisfied that the suspension is necessary in the interests of the participants or in the public interest.

43.   Valuation and pricing

1.  

   (1)   Offer and redemption prices should be calculated on the basis of the net asset value of the collective investment scheme divided by the number of units outstanding.

1.  

   (2)   Such prices may be adjusted by fees and charges for management of the collective investment scheme, which shall first be charged against investment income, next against dealing profits from the issue and redemption of units in the collective investment scheme, and lastly against the capital value of the investments of the collective investment scheme.

1.  

   (3)   The amount or method of calculating such fees and charges shall be clearly disclosed in the collective investment scheme particulars.

44.   Advertising

1.  

   (1)   A collective investment scheme shall not issue, use or cause to be issued or used for any purpose any advertisement for or in connection with the collective investment scheme unless a copy of the advertisement is forwarded to the Commission, together with the fee set out in Schedule 3 to the Securities (Licences and Fees) Regulations, 14 days prior to the date of first use.

1.  

   (2)   If on receipt the Commission is not satisfied with the advertisement, it shall before the date of first use require the collective investment scheme to amend, withdraw or refrain from issuing or using an advertisement as in its discretion it may determine.

1.  

   (3)   For the purposes of subregulations (1) and (2), “advertisement” does not include any publication of the issue, sale, repurchase or redemption prices of units.

1.  

   (4)   An advertisement of a collective investment scheme shall include a warning statement that—

   1.  

      (a)     the price of units, and the income from them (if the collective investment scheme pays a dividend), may decrease or increase; and

   1.  

      (b)     in certain circumstances a participant's right to redeem his or her units may be suspended.

1.  

   (5)   Warning statements shall be printed in type of the same size as the rest of the text in the advertisement; despite this, they may be in smaller text if printed in bold type or prominently outlined.

45.   Fees of custodian

The fees of the custodian paid out of the property of a collective investment scheme shall be calculated and accrue and be paid in the manner determined by the formation documents of the collective investment scheme.

46.   Inclusion of performance data

1.  

   (1)   If performance data or estimated yield is quoted in any collective investment scheme particulars, advertisement or any other invitation to the public to invest, the Commission may require justification of the calculation.

1.  

   (2)   No forecast of the collective investment scheme's performance may be made but for this purpose the publication of a prospective yield does not constitute a forecast of performance.

47.   Changes to collective investment scheme documentation

1.  

   (1)   Subject to subregulation (2), no alteration may be made to the formation documents of a collective investment scheme except by a special or extraordinary resolution of a participant and subject to the prior approval of the Commission.

1.  

   (2)   The formation documents may be altered by the management company and custodian, without consulting participants, provided that the custodian certifies in writing that in its opinion the proposed alteration—

   1.  

      (a)     is necessary to enable compliance with fiscal or other statutory or official requirements;

   1.  

      (b)     is necessary to correct a manifest error;

   1.  

      (c)     does not materially prejudice participants' interests;

   1.  

      (d)     does not to any material extent release the custodian, management company or any other person from any liability to participants; or

   1.  

      (e)     does not increase the costs and charges payable from the collective investment scheme property.

48.   Transactions with connected persons

1.  

   (1)   A person shall not enter into underwriting or sub-underwriting contracts on behalf of a collective investment scheme—

   1.  

      (a)     without the prior consent of the custodian; and

   1.  

      (b)     unless the collective investment scheme provides in writing that all commissions and fees payable under such contracts and all investments acquired pursuant to such contracts form part of the collective investment scheme's assets.

1.  

   (2)   If cash forming part of the collective investment scheme's assets is deposited with the custodian, the management company, the investment adviser or with any connected person of these companies (being an institution authorised to accept deposits), interest must be paid on the deposit at a rate not lower than the prevailing commercial rate for a deposit of that size and term, negotiated at arm's length.

1.  

   (3)   All transactions carried out by or on behalf of the collective investment scheme must be at arm's length and, in particular, any transactions between the collective investment scheme and—

   1.  

      (a)     the management company;

   1.  

      (b)     the investment adviser;

   1.  

      (c)     the directors of the collective investment scheme; or

   1.  

      (d)     any of their connected persons as principal,

1.  

   may only be made with the prior consent of the custodian.

1.  

   (4)   No single dealer should account for 50% or more of the collective investment scheme's transactions in value in any one financial year of the collective investment scheme.

49.   Meetings

A collective investment scheme shall arrange to conduct general meetings of participants as follows—

1.  

   (a)     participants must be able to appoint proxies;

1.  

   (b)     votes should be proportionate to the number of units held, or to the value of units held where there are accumulation units;

1.  

   (c)     the quorum for meetings at which a special or extraordinary resolution is to be considered shall be the holders of 25 % of the units in issue, and 10% if only an ordinary resolution is to be considered;

1.  

   (d)     if within half an hour from the time appointed for the meeting a quorum is not present, the meeting should stand adjourned for not less than 14 days; the quorum at an adjourned meeting will be those persons present in person or by proxy;

1.  

   (e)     if the possibility exists of a conflict of interest between different classes of participant there should be provision for class meetings;

1.  

   (f)     an extraordinary general meeting shall be called for the following purposes—

   1.  

      (i)     to modify, alter or add to the formation documents, except as provided in regulation 47,

   1.  

      (ii)     to terminate the collective investment scheme (unless the means of termination of the collective investment scheme are stipulated in the formation documents, in which case termination shall be effected in accordance with the provisions of the formation documents),

   1.  

      (iii)     to increase the maximum fees paid to the management company, custodian or directors of the collective investment scheme, or

   1.  

      (iv)     to impose other types of fee;

1.  

   (g)     the directors of the collective investment scheme, the custodian, the management company, investment adviser and their connected persons shall be prohibited from voting their beneficially owned shares at, or counted in the quorum for, a meeting at which they have a material interest in the business to be conducted;

1.  

   (h)     an ordinary resolution may be passed by a simple majority of the votes of those present and entitled to vote in person or by proxy at a duly convened meeting; and

1.  

   (i)     a special or extraordinary resolution may only be passed by 75% or more of the votes of those present and entitled to vote in person or by proxy at a duly convened meeting.

PART 9
RESTRICTIONS ON INVESTMENT POWERS OF COLLECTIVE INVESTMENT SCHEMES

50.   Application of this Part

1.  

   (1)   This Part applies to all authorised collective investment schemes.

1.  

   (2)   For the purposes of this Part—

“securities exchange” means a securities exchange licensed by the Commission;

“near cash” means money, deposits or investments which fall within any of the following—

1.  

   (a)     money deposited with a licensed bank or financial institution which is in a current account, or in a deposit account provided that the money can be drawn immediately and without payment of a penalty exceeding 7 days interest calculated at ordinary commercial rates;

1.  

   (b)     certificates of deposit issued by a licensed bank or financial institution if immediately redeemable at the option of the holder;

1.  

   (c)     Government and other public securities if redeemable at the option of the holder or bound to be redeemed within 2 years;

“net asset value” means the net value of the property of the securities collective investment scheme after deducting—

1.  

   (a)     any outstanding borrowing whether immediately due to be repaid or not;

1.  

   (b)     any capital sum outstanding on a mortgage of an immovable to secure money borrowed under regulation 64(2)(b);

“regulated market” means any stock exchange, over-the-counter market or other organised securities market that is regulated, operates regularly, is open to the international public and is recognised by the Commission.

51.   General investment powers

1.  

   (1)   The property of a collective investment scheme may be invested only in accordance with this Part and within any relevant upper limit that is specified.

1.  

   (2)   The collective investment scheme particulars may restrict—

   1.  

      (a)     the descriptions of asset in which the property of the collective investment scheme may be invested;

   1.  

      (b)     the proportion of the capital property of the collective investment scheme to be invested in assets of any description;

   1.  

      (c)     the description of transactions permitted;

   1.  

      (d)     the borrowing powers of the collective investment scheme,

1.  

   and any such restrictions shall be observed as if they were included in this Part.

52.   Core requirement

The investments of a collective investment scheme must consist solely of—

1.  

   (a)     transferable securities admitted to official listing on a securities exchange;

1.  

   (b)     transferable securities admitted to listing or traded on or under the rules of a regulated market;

1.  

   (c)     recently issued securities provided that—

   1.  

      (i)     the terms of issue include an undertaking that application will be made for admission to official listing on a securities exchange or to be admitted to listing or traded on a regulated market, and

   1.  

      (ii)     such admission is secured within a year of issue.

53.   Spread of investments

Subject to regulation 54, a collective investment scheme—

1.  

   (a)     may invest no more than 15% of its net asset value in the transferable securities issued by any single issuer;

1.  

   (b)     may acquire no more than 25% of a security issued by any single issuer.

54.   Government and other public securities

Up to 30% of a collective investment scheme's net asset value may be invested in Government and other public securities of the same issue.

55.   Financial futures

A collective investment scheme may not enter into any financial futures contracts and options except for hedging purposes.

56.   Warrants and options

A collective investment scheme may invest no more than 10% of its net asset value in warrants and options, in respect of transferable securities.

57.   Investment in other collective investment schemes

1.  

   (1)   A collective investment scheme may not acquire the units of any other collective investment scheme unless that other collective investment scheme is also authorised or approved by the Commission.

1.  

   (2)   If a collective investment scheme's objective is to invest primarily in investments restricted by this Part, such holding must not be in contravention of the relevant limitation.

1.  

   (3)   A collective investment scheme may invest in aggregate no more than 5% of its net asset value in the units of other authorised or approved collective investment schemes.

1.  

   (4)   A collective investment scheme may acquire no more than 10% of the units of any single authorised collective investment scheme.

1.  

   (5)   Despite subregulations (2), (3) and (4), a collective investment scheme may invest all of its assets in a single collective investment scheme and be authorised as a feeder collective investment scheme, provided that—

   1.  

      (a)     the underlying collective investment scheme is authorised by the Commission;

   1.  

      (b)     the collective investment scheme particulars must state that the collective investment scheme is a feeder collective investment scheme into the underlying collective investment scheme; and

   1.  

      (c)     the borrowing of the feeder collective investment scheme may not exceed 10 % of its net asset value and shall be restricted to facilitating redemptions or defraying operating expenses.

1.  

   (6)   No increase in the overall total of initial charges, the management company's annual fee or any other costs and charges borne by the participants or by the collective investment scheme may result, if the collective investment scheme in which a collective investment scheme invests is managed by the same management company or by a connected person of that company.

58.   Prohibition of real estate investments

A collective investment scheme may not invest in any type of real estate (including buildings) or interests in real estate (including options or rights but excluding shares in real estate companies).

59.   Restriction on lending of money

1.  

   (1)   None of the money in the property of any collective investment scheme may be lent.

1.  

   (2)   Purchasing a debenture is not lending for the purposes of subregulation (1), nor is the placing of money on deposit or in a current account.

60.   Restriction on lending of property other than money

1.  

   (1)   None of the property of a collective investment scheme other than money may be lent by way of deposit or otherwise.

1.  

   (2)   Stock-lending transactions are not lending for the purposes of subregulation (1).

1.  

   (3)   None of the property of the collective investment scheme may be mortgaged, except to secure money borrowed under regulation 64 (2) (b).

61.   Unlimited liability

A collective investment scheme may not acquire an asset that involves the assumption of a liability that is unlimited.

62.   Limitations on securities in which directors or officers have interests

A collective investment scheme may not invest in any security of any class in any company or body if any director or officer of the management company owns more than ¹/₂% of the total nominal amount of all issued securities of that class, or, collectively the directors and officers of the management company own more than 5% of those securities.

63.   Limitations on nil-paid or partly paid securities

The portfolio of a collective investment scheme may not include any security where a call is to be made for any sum unpaid on that security unless that call could be met in full out of cash or near cash by the collective investment scheme's portfolio.

64.   Limitations on borrowing

1.  

   (1)   Subject to subregulation (2), a collective investment scheme may not borrow.

1.  

   (2)   A collective investment scheme may borrow—

   1.  

      (a)     up to a maximum of 10 % of its net asset value provided that the borrowing is temporary; and

   1.  

      (b)     in the case of an investment company, up to a maximum of 10% of its net assets if the borrowing is to enable the acquisition of immovable property essential for the direct pursuit of its business (and, together with any borrowing under paragraph (a), subject to the aggregate borrowing not exceeding in any case 15% of the net assets of the investment company).