Order · As enacted · 7 parts
Mutual Funds Order, 2001
Part I
Official textFrom Attorney General's Chambers, unchanged
This Order may be cited as the Mutual Funds Order, 2001 and shall commence on a date to be appointed by the Minister, with the approval of His
Majesty the Sultan and Yang Di-Pertuan, by notification in the Gazette.
The long title of this Order is "An Order to provide for the regulation of mutual funds in Brunei Darussalam, the supervision and licensing of such funds and of persons promoting and providing services in connection therewith and for other matters related to mutual funds".
Interpretation.
s 2( 1)
In this Order, except where the context otherwise requires -
157
"administrative service", in relation to a registered fund, means any service which is administrative in nature but is neither a management service nor service as a trustee or custodian;
"administrator" means, in relation to a registered fund, a person who provides one or more administrative services as regards the fund;
"approved auditor" has the meaning ascribed thereto in the International
Business Companies Order, 2000 (S 56/2000);
"arrangement" includes a proposed arrangement;
"Authority" means such person or body as is appointed by His Majesty the Sultan an Yang Di-Pertuan to be the Authority for the purposes of this Order;
"bearer share" has the meaning given by section 5(2);
"category", in relation to a mutual fund, means a private fund, professional fund or public fund;
"current" means in force for the time being or, as regards a permission, given and not withdrawn;
"custodial licence" means a licence issued for the purposes of section 13;
"custodial permission" means a permission given for the purposes of section 13;
"custodian", in relation to a mutual fund, means any person who-
pursuant to or under a trust deed or other instrument or agreement (whether executed or made under the law of Brunei
Darussalam or that of a country, territory or recognised jurisdiction outside Brunei Darussalam); or
under the law of such a country, territory or recognised jurisdiction, is the person in whom the property of the fund is vested or the person who is otherwise responsible to the fund or its participants for the safe-keeping of that property;
"dedicated shares" has the meaning ascribed thereto in Part XIIA of the
International Business Companies Order, 2000 (S 56/2000);
11designated day", in relation to a fund described in section 7(4), means the day specified as such under section 10(l)(d);
"director" includes an alternate or substitute director and any person occupying the position of director of a company, by whatever name so called;
"fund interest" means, in relation to a mutual fund, a share, an interest in a limited or other partnership, a unit of participation in a unit trust to which this Order applies or any other security which is a unit of proprietorship (however that unit is described) which
(a} is issued or is otherwise offered by the fund; and
represents rights in or carries an entitlement to receive income or participate in profits or other gains or which otherwise confers or constitutes an entitlement so to receive and participate, but "fund interest" does not include a bearer share;
158
159 10th. MARCH, 2001
"inspector" means a person appointed under section 28{2);
"Islamic fund" means a mutual fund which does not offend against the
Islamic Religion;
"jurisdiction", except in the expression "recognised jurisdiction", means-
{a) a legal jurisdiction extending to
every place within a particular state;
lii) where a state is a federation or confederation (whether it is styled or otherwise described as being such), every place within a state, province, canton or other federal or confederated territory which forms part of the state;
where a state is a unitary state . .with two or more distinct legal systems, every place to which any particular such system applies; and
{b)
the civil jurisdiction of a court or other tribunal which extends to two or more independent states and which is created by a treaty or other international agreement between those states;
"management service", in relation to a mutual fund, includes any of the following
{a) giving investment advice;
{b) acquiring, disposing of or otherwise dealing in investments or other property on behalf of a mutual fund;
{c) the exercise of day to day control over the management of a mutual fund's assets;
{d) any other service or activity which is prescribed for the purposes of this definition;
"manager", in relation to a registered fund, means subject to subsection
, the person who provides one or more management services as regards the fund, and in this Order, apart from sections 4, 25, 28(9) and 39, "manage", "management" and kindred words shall be construed in accordance with the foregoing;
"Minister" means the Minister of Finance;
"mutual fund" shall be construed in accordance with section 4 and any related reference to a "fund" shall be construed accordingly;
"mutual fund licence" means a licence issued on an application under section 7;
"mutual fund permission" means a permission given on an application under section 7;
"operator's licence" means a licence described in section 11;
"operator's permission" means a permission described in section 11;
"participant", in relation to a mutual fund, shall be construed in accordance with paragraph (a) or, as the case may be, paragraph (b) of section 4(1) (and regardless of whether the fund concerned refers to those participating therein as participants, members or otherwise);
"prescribed" means prescribed by regulations made under section 3;
"private fund" means a mutual fund which is not a professional fund and whose terms-
limit the number of participants for the time being to not more than 50, and
enable the participants at any time to remove from office in terms provided by the mutual fund the person who is the manager of the mutual fund for the time being;
"a professional fund" means a mutual fund whose terms-
limit the nU.mber of participants for the time being to not more than 50; and
{b)
also require each participant to contribute, subject to subsection
, not less than $500,000 or, if the mutual fund is not denominated in the currency of Brunei Darussalam, not less than an equivalent amount in the currency in which the mutual fund is denominated, such amount being calculated by reference to the foreign exchange rate obtaining in Brunei Darussalam on the designated day;
"prospectus" means any kind of offering document, whether the document is a single document or one of a series and however it is described;
160
"public fund" means any mutual fund other than a professional fund or a private fund;
"recognised authorisation" shall be construed in accordance with section 35;
"recognised jurisdiction" means a jurisdiction which is for the time being recognised for the purposes of this Order by an order made by the
Minister and published in the Gazette;
"record" includes any electronic or other means of storing information which enables the information when stored to be retrieved or reproduced;
"Register" means the register established pursuant to section 18;
"registered fund" means a mutual fund to which a current mutual fund licence or a current mutual fund permission rdates;
"regulations" means regulations made under section 3;
"shares" shalC where the context so admits, have the meaning ascribed thereto in the International Business Companies Order, 2000 (S 56/2000);
"unit trust to which this Order applies" means a unit trust which, whether it is established under the laws of Brunei Darussalam or under those of any jurisdiction outside Brunei Darussalam, is by virtue of section 4 a mutual fund.
Where in relation to a particular mutual fund the currency used as regards its fund interests is a currency other than that of Brunei Darussalam, in applying this Order as regards that fund, the definition of "professional fund" in subsection (1) shall be construed and have effect as if for "$500,000" there were substituted "the amount of the currency used as regards the mutual fund's fund interests needed on the designated day to purchase $500,000".
For the purposes of this Order, an individual shall be regarded as being ordinarily resident in Brunei Darussalam during any period of 12 months if during that period he has resided in Brunei Darussalam for an aggregate period of at least 170 days or if he establishes to the satisfaction of the Authority that he has a genuine intention of so residing and holds any necessary permits to live, and be employed in Brunei Darussalam.
For the purposes of this Order -
{a}
a company registered under the Companies Act (Chapter 39) or the
International Business Companies Order, 2000 (S 56/2000) shall be deemed to be ordinarily resident at its registered office or, in case
BRUNEI DARUSSALAM GOVERNMENT GAZETTE another address has been furnished in relation to it at such registered office or, if the Authority so determines, at that other address;
every other body corporate and every unincorporated body of persons shall be deemed to be ordinarily resident -
in case its registered or principal office or place of business is in
Brunei Darussalam, at such registered office or place or, in case another address has been so furnished in relation to it, at such office or place or, if the Authority so determines, at that other address; or
in case its principal office or place of business is outside Brunei
Darussalam, at any office or place in Brunei Darussalam at which it carries on business or, in case another address has been so furnished in relation to it, at such office or place or, if the Authority so determines, at that other address.
References in this Order to a manager include, except where the context otherwise requires, references to a person appointed pursuant to paragraph 4(1)(d)
of the Second Schedule to be the manager of a registered fund.
Regulations.
The Minister may, with the approval of His Majesty the Sultan and Yang
Di-Pertuan, make the following regulations-
prescribing any matter referred to in this Order as prescribed or to be prescribed;
regulating the use of any name or any word or expression in a name connected with mutual funds;
designating mutual funds or a class or classes thereof as private funds;
regulating the publication of advertisements offering the services of dealers in securities 0r offering securities for purchase or sale and the form or content of such advertisements;
regulating the particulars to be included in a statement by the manager under section 7(3);
without limitation making such incidental or supplementary provisions as may appear to the Minister to be necessary or proper for any purpose of this Order or in consequence of, or to give full 162
effect to, any of its prov1s1ons including prudential and due diligence principles, principles of supervision, operation and marketing, capitalisation, methods of valuation and any other relevant matter.
{g) prescribing any fees m respect of any requirements under this
Order.
Regulations made under this Order may make different provisions for different cases or classes of case and for different purposes of the same provision.
s 4Mutual funds
( 1)
Subject to the following provisions of this section, for the purposes of this Order each of the following is a mutual fund -
163
an arrangement under which property belongs benefi.cially to, and is managed, either as a whole or in two or more separate parts, by or on behalf of, a body corporate whether incorporated or otherwise established in Brunei Darussalam or elsewhere) having as its purpose or effect -
the investment of its funds with the aim of spreading investment risk; and
to give the persons taking part in the arrangement ("the participants") the benefi.t of the results of the management of those funds by or on behalf of that body and to participate in or receive profi.ts or other gains or income arising from the acquisition, holding, management or disposal of the property or any part thereof or of any sums paid out of such profi.ts or income;
a unit trust, a limited or other partnership or other arrangement with respect to property, whose purpose or effect is -
to enable persons taking part in the arrangement ("the participants"), whether by becoming owners of the property or any part thereof or otherwise, to participate in or receive profi.ts or other gains or income arising from the acquisition, holding, management or disposal of the property or any part thereof or of any sums paid out of such profi.ts or income; and
to spread risk by means of pooling in the manner described in subsection (3)(a);
BRUNEI DARUSSALAM GOVERNMENT GAZETTE and in this subsection "property" means property of any description, including money or any fund interest;
In the case of such an arrangement as is mentioned in subsection (l)(a}, the rights of the participants must be represented by shares in or securities of that body at least some of which shares or securities, either on demand or within a specified period after demand -
(a}
are redeemable or repurchasable at the option of the participant concerned; or
the body ensures can be sold by the participants at a price, whether incorporating a premium or profit or a discount or loss, related to the value of the property to which they relate.
A unit trust, partnership or other arrangement such as is mentioned in subsection (l)(b}-
(a}
must be such that the participants do not have day to day control over the management of the property, whether or not they have rights to attend and vote at meetings of the body or to be consulted or to give directions;
must have both of the characteristics mentioned in subsection (4);
and
must be such that -
at least some of the fund interests issued or otherwise offered under the arrangement are, under the arrangement, redeemable or repurchasable at the option of the participant concer9ed on demand or within a specified period after demand; or
must be such that the fund interests issued or otherwise offered under the arrangement are, under that arrangement, transferable by the participants at a price related to the value of the property to. which they relate.
The characteristics referred to in subsection (3}(b} are-
(a} that the contributions of the participants and the profits or income out of which payments are to be made to them are pooled either in a single pool or in two or more pools however segregated; and fb}
that the property in question is managed as a whole by or on behalf of the manager of the fund.
Subject to subsection (3}, neither a mutual fund licence nor a mutual fund permission shall be issued or given as regards any arrangement which issues or offers/ or has at any time issued or offered/ bearer shares.
In this Order, "bearer share" means any share, bond or other security the title to which is vested in a particular person by reason only of his being in possession of or the bearer of a particular certificate or other document relating to the security.
The Minister may in any particular case and on such terms and conditions as he thinks fit exempt a mutual fund, in whole or in part, from the application of this section.
Part II
Part III