In a drive to complement the ever increasing portfolio of corporate solutions, the legislator sought to create a legislative framework regulating International Funds. The Mutual Fund & Hedge Fund Act 2008 was enacted to create a regulatory regime, which could adequately balance, investor-friendly solutions with investor protection.
The Mutual Fund & Hedge Fund Act sets out a regulatory regime for both retail and professional clients. Funds open to professional clients are characterised by a markedly more flexible regime, regard being had to the experience of the investor (individuals or corporate entities) subscribing to the units within these Funds. The minimum investment for Professional Investors is set at US$100,000 or its equivalent in any other currency.
Private funds (with less than (50) investors) make an ideal setup for family, small and medium sized enterprises and investment clubs, and a valid alternative to other wealth management products such as foundations and trusts. Private funds are prohibited from soliciting the general public to subscribe to units therein, a prohibition which does not subsist for public funds, which may freely solicit retail clients.
To complement the licensing framework, the legislator has also provided for a robust and flexible regimes for entities providing adminsitrative and management services to licensed Seychelles entities. By way of illustration, Seychelles funds may be either administered in Seychelles or in a recognised foreign jurisdiction. Furthermore, foreign funds which satisfy the following criteria:
- are already licensed in a Recognised Jurisdiction; and
- are managed by a Seychelles-licensed fund administrator; and
- are listed on a stock exchange in a Recognised Jurisdiction; or
- where the minimum investment by each investor is not less than US$100,000
shall be exempt from the need to obtain a Seychelles investment services licence. This derogation shall strongly appeal to overseas fund managers seeking to manage their fund from a reputable yet investor-friendly jurisdiction, which scores highly on price competitivity.
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