Section 29Part 5 — Duties and Powers of the Authority
Authority to administer this Act
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It is the duty of the Authority to administer this Act and in particular to examine and make determina tions with respect to —
applications for mutual fund administrators ’ licences under sections 11 a n d 12 ; ( aa ) an application for licensing or registration of an EU Connected Fund under section 22B ;
applications for mutual fund licences under section 5 ;
proposals for waivers under section 12(3);
proposals for approvals or waivers under section 13 ;
proposals for refusals or directions under section 18 ; and
requirements and applications under section 31(10) and (11).
The Authority shall —
maintain a general review of mutual fund business and any EU Conn ected Fund business in the Islands and submit an annual report thereon to the Cabinet;
be responsible for supervision and enforcement in respect of persons to whom this Act applies, and for the investigation of persons where the Authority reasonably be lieves that they are or have been in breach of section 4(2), 7, 10 or 19; and
whenever the Authority considers it necessary, examine, by way of scrutiny of prescribed regular returns, on - site inspections or auditors ’ reports, or in such other manner as the Authority may determine, the affairs or business of any regulated mutual fund or any regulated EU Connected Fund or licensee for the purpose of a general review under paragraph (a) or for the purpose of satisfying itself that this Act and any regulations made under this Act or under the Proceeds of Crime Act (2025 Revision) are being complied with. (2A) For the purposes of subsection (2)(c), a mutual fund shall submit to the Authority a return in the prescribed form and manner, at such intervals as may be prescribed, and the return shall be accompanied by the prescribed fee.
The Authority may in writing authorise any other person to assist it in the exercise and performance of its powers and functions under t his Act . 30. Powers of Authority in respect of regulated mutual funds or regulated EU Connected Funds 30 . ( 1 ) The Authority may take all or any of the actions specified in subsection (3) if it is satisfied that —
a regulated mutual fund or a regulate d EU Connected Fund is or is likely to become unable to meet its obligations as they fall due;
a regulated mutual fund or a regulated EU Connected Fund is carrying on or attempting to carry on business or is winding - up its business voluntarily in a man ner that is prejudicial to its investors or creditors; ( ba ) a regulated mutual fund or EU Connected Fund has contravened any provision of this Act or of the Anti - Money Laundering Regulations (2025 Revision) ;
a regulated mutual fund, in the case of a licensed mutual fund, is carrying on or attempting to carry on business without complying with any condition of its Mutual Fund Licence contrary to section 5(5); ( cc ) a regulated EU Connected Fund is carrying on business without complying with any conditio n of its licence;
the direction and management of a regulated mutual fund or a regulated EU Connected Fund , has not been conducted in a fit and proper manner; or
a person holding a position as a director, manager or officer of a regulated mutual fu nd or a regulated EU Connected Fund is not a fit and proper person to hold the respective position. ( 2 ) For the purposes of alerting it as to whether or not an event referred to in subsection (1) has occurred or is likely to occur, the Authority shall imme diately enquire into and ascertain the reason for any failure by a regulated mutual fund or a regulated EU Connected Fund — ( a ) to change its name in accordance with a direction given to it under section 6(2); ( b ) to have its accounts audited in accordance with section 8(1) or to send its audited accounts to the Authority in accordance with section 8(2); ( c ) to pay its prescribed annual licence or registration fee in accordance with section 9 ; or ( d ) to have its accounts audited or to submit the audited accounts to the Authority when instructed to do so under section 23(1). ( 3 ) For the purposes of subsection (1), the actions the Authority may take in respect of a regulated mutual fund or a regulated EU Connected Fund are to — ( a ) cancel any Mutual Fund Licence, or any registration under section 4(1)(b), 4(3) or
(4)
, in force in respect of the mutual fund; ( aa ) cancel the licence or registration of a regulated EU Connected Fund;
impose condition s or further conditions on the mutual f und and to amend or revoke those conditions; ( bb ) impose conditions or further conditions on a licence granted to a r egulated EU Connected Fund pursuant to section 22C or amend or revoke conditions attached to that licence;
require the substitution of any promoter or operator of the mutual fund or the regulated EU Connected Fund ;
appoint a person to advise the mutual fund or the regulated EU Connected Fund on the proper conduct of its affairs; and
appoint a person to assume control of the affairs of the mutual fund or the regulated EU Connected Fund . ( 4 ) If the Authority takes action under subsection (3), it may apply to the Grand Court for an order to take such other action as it considers necessary to protect the interests of investors in, and creditors of, the mutual fund or the regulated EU Connected Fund and, subsequently, take any other action provided for in that subsection.
Where it considers it necessary or appropriate to do so, and if it is practical to do so, the Authority shall inform the investors of a mutual fund or a regulated EU Connected Fund of any action i t is taking or intending to take in respect of the mutual fund or the regulated EU Connected Fund under this section.
A person appointed under subsection (3)(d) or (e) is appointed at the expense of the relevant fund, and any expenses incurred by the A uthority by virtue of the appointment is an amount due to the Authority payable by the mutual fund or the regulated EU Connected Fund .
A person appointed under subsection (3)(e) has all the powers necessary, to the exclusion of any operator, to administer the affairs of the mutual fund in the best interests of the investors and creditors of the mutual fund or the regulated EU Connected Fund .
The powers referred to in subsection (7) include the power to terminate the business of the mutual fun d or the regulated EU Connected Fund .
A person appointed in respect of a mutual fund or a regulated EU Connected Fund under subsection (3)(d) or (e) shall —
when requested to do so by the Authority, supply the Authority with such information in res pect of the mutual fund or the EU Connected Fund as is specified by the Authority;
within three months of that person’s appointment, or within such other period as the Authority may specify, prepare and supply to the Authority a report on the affairs o f the mutual fund or the EU Connected Fund making, where appropriate, recommendations in respect of the mutual fund or the EU Connected Fund ; and
if that person’s appointment is not terminated after supplying the report referred to in paragraph (b), su bsequently supply to the Authority such other information, reports and recommendations as the Authority specifies.
If a person appointed under subsection (3)(d) or (e) fails to comply with an obligation under subsection (9), or, in the Authority ’ s opi nion, is not carrying out that person’s obligations in respect of the relevant mutual fund or EU Connected Fund satisfactorily, the Authority may revoke the appointment and appoint some other person in that person’s place.
On receipt of any informatio n or a report under subsection (9) in respect of a mutual fund or the regulated EU Connected Fund , the Authority may —
require the mutual fund or the regulated EU Connected Fund to reorganise its affairs in a manner specified by the Authority;
if the mutual fund or the regulated EU Connected Fund is a company, apply to the Grand Court under section 94 of the Companies Act (2025 Revision) for the company to be wound up by the Court in accordance with that Act ;
if the mutual fund or the regula ted EU Connected Fund is a unit trust governed by the laws of the Islands, apply to the Grand Court for an order directing the trustee to wind up the fund; or
if the mutual fund or the regulated EU Connected Fund is a partnership governed by the laws o f the Islands, apply to the Grand Court for an order to dissolve the partnership, and may take such action in respect of the appointment or continued appointment of the person appointed under subsection (3)(d) or
as it considers appropriate.
If the Authority takes action under subsection (11), it may apply to the Grand Court for an order to take such other action as it considers necessary to protect the interests of investors and creditors of the mutual fund or the regulated EU Connected Fund , and take any other action provided for in that subsection or subsection (3).
Where a regulated mutual fund or regulated EU Connected Fund is a partnership formed under the laws of the Islands and the Authority revokes any Mutual Fund Licence of the mutual fund in accordance with subsection (3)(a) the partnership is to be taken to have been dissolved.
Without prejudice to any other powers of the Authority, the Authority may at any time cancel a Mutual Fund Administrators Licence, if the Authority is sa tisfied that the mutual fund administrator has ceased to carry on or to attempt to carry on business or has been placed in voluntary winding - up or is dissolved.
Where the Grand Court makes an order on an application made in accordance with subsection (11)(c), the Court may grant the trustee such indemnity as it considers appropriate out of the assets of the mutual fund or the regulated EU Connected Fund .
Without prejudice to any other power of the Authority, the Authority may, at any time, cancel any Mutual Fund Licence, or any registration under section 4(1)(b), 4(3) or 4(4)(a) , in force in respect of a mutual fund if the Authority is satisfied that the fund has ceased to carry on or to attempt to carry on business as a mutual fund or has been pla ced in winding - up or is dissolved. ( 16A ) The Authority may, at any time, cancel a licence granted or registration, under section 22C if the Authority is satisfied that the regulated EU Connected Fund has ceased to carry on business as an EU Connected Fund o r has been placed in winding - up or is dissolved.
Nothing in this section shall be construed as limiting any power conferred on the Authority by section 29 or by any other provision of this Act or the regulations made hereunder.
Cross References
- Section 94 of Companies Act
Reference to Companies Act