Seychelles mutual funds (“Seychelles investment funds”) are a popular choice for private equity funds (“private funds”) or funds limited to sophisticated investors (“professional funds”). In Seychelles, mutual funds are governed by the Seychelles Mutual Fund and Hedge Fund Act 2007 and are licensed by the Seychelles Financial Services Authority.
The Seychelles Mutual Fund and Hedge Fund Act 2007 defines a “mutual fund” as a company, unit trust or partnership that collects and pools funds for collective investment purposes including hedge fund purposes or with the aim of spreading investment risks, and issues equity interests enabling investors in the mutual fund to receive or have the right to receive a portion of profits or gains derived from the investments and includes (i) an umbrella fund whose equity interests are split or segregated into different funds or sub funds and (ii) a hedge fund.”
An “equity interest” means a share, trust unit or partnership that (a) carries an entitlement to participate in the profits or gains of the company, unit trust or partnership; and (b) is redeemable or re-purchasable at the option of the investor before commencement of the winding-up, termination or dissolution of the company, unit trust or partnership, but does not include a debt.
Therefore the Act only regulates open-ended funds and does not regulate nor license closed-ended funds.
The Seychelles Mutual Fund and Hedge Fund Act 2008 prescribes for the mutual fund administration to be conducted from –
Under the Act, “recognized jurisdictions” currently include Austria, Australia, Belgium, Bahamas, Bahrain, Bermuda, British Virgin Islands, Canada, Cayman Islands, Cyprus, Denmark, France, Germany, Gibraltar, Guernsey, Holland, Hong Kong, Isle of Man, Ireland, Japan, Jersey, Luxembourg, Malaysia (including Labuan), Mauritius, New Zealand, Singapore, South Africa, Switzerland, United Arab Emirates, United Kingdom and United States of America.
This provides a great deal of flexibility in terms of the fund administration options of Seychelles mutual funds.
The Seychelles Mutual Fund and Hedge Fund Act prescribes four different types of funds:
A Private Fund” is a mutual fund
A Professional Fund means a mutual fund; the equity interests which can only be acquired by professional investors and in respect of which the initial minimum investment per investor is not less than $100,000 or its equivalent in any other convertible currency.
A Professional Investor means a person –
A Public Fund is any mutual fund which is not a private fund or a professional fund.
Exempt Foreign Funds are those holding a current license or other authorisation to operate as a mutual fund issued under the laws of a “recognised jurisdiction”. The Act allows foreign funds to receive an exemption from the Financial Services Authority to operate from within Seychelles without being licensed under the Act if the fund is:
Another distinct advantage of mutual and hedge funds licensed in Seychelles are the variety of options for fund vehicles:
Click here to read the full text of the Seychelles Mutual Fund and Hedge Fund Act 2008.
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