Licensing, registration requirements
2) The CIS operator, together with its related companies, must have assets under
management of at least $500m globally. The companies are said to be related where a company a) is the holding company of another company2, (b) is a subsidiary of another company3, (c) is a subsidiary of the holding company of another company.
AUM would include discretionary funds but exclude property funds or REITs
3) The trustee/fund supervisor must be domiciled and regulated in the same jurisdiction as that of the qualifying CIS it oversees.
4) The CIS operator must maintain shareholders’ equity of at least $1m. In addition to this, where the CIS operator has assets over $500m, it must maintain additional capital, equivalent to 0.1% of the assets in excess of $500m.
5) CIS operator, which participates in this framework, would have to consent that home and host regulators may share information relating to the CIS operator and the qualifying CIS with one another.
6) Where the fund management function is to be delegated, up to an aggregate of
20% of the assets of a qualifying CIS may be delegated to foreign sub-managers/ delegates that are not regulated by a signatory to the framework.
7) The assets of a qualifying CIS must be segregated from the custodian’s assets and other clients’ assets.
Independence of trustee / fund supervisor
- It holds directly or indirectly 10% or more of total issued shares in the CIS operator or vice versa;
- There is a common shareholder between the trustee or fund supervisor and the CIS operator, and the common shareholder holds directly or indirectly 10% or more of the total issued share capital of the trustee or fund supervisor and the CIS operator respectively; or
- The trustee or fund supervisor has one or more directors who is or are also ultimately responsible for the CIS operator.