CFCL Investment regulation - Gibraltar

Holding restrictions – Register market 

Disclaimer

The information contained in the Holding Restrictions is based on the legal opinion obtained by CBL acting as a sub-custodian for CFCL that was issued on 30 December 2020. CFCL believes the information to be correct as 
of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Holding Restrictions do not constitute legal advice and Clients should seek advice from independent professional counsel.
Clients are responsible for ensuring compliance with the holding restrictions and agree to indemnify and hold harmless, CFCL, for any loss, expense, liability, damage, or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.

Restrictions on clients

Pursuant to the Sanctions Act 2019, individuals domiciled in countries which are subject to international sanctions recognised by Gibraltar, will not be accepted as investors of any Gibraltar-based funds.

U.S. investors can only be accepted in accordance with U.S. law. Thus, the Gibraltar fund will generally accept U.S. investors as long as the fund is compliant with U.S. law. 

Restrictions on settlement

There is no general restriction on settlement of Gibraltar investment funds through CFCL. However, certain funds may impose specific settlement/transfer restrictions. Clients must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions.

Disclosure requirements

Introductory information and categories​

This section provides general information about the disclosure requirements for fund securities holdings with which Clearstream Fund Centre must, according to the information available at the time of the present publication, comply with each of the domestic markets and fund markets covered by the Disclosure Requirements.

Fund securities that are held remotely are usually not disclosed by CFCL. A disclosure request received by CFCL regarding such a holding will be forwarded to the relevant client without assessing its validity and the CFCL Client shall handle the request on a voluntary basis.

Disclosure requirements are only available for those countries where CFCL has a link to the respective domestic market or direct access to local domiciled funds that are held in Clearstream’s name on the register.

For fund securities holdings where CFCL has no such link or direct access to the register, clients must be aware that local laws might provide for mandatory disclosure. A disclosure request in this regard will be forwarded to clients without assessing its validity. Clients commit not to unreasonably withhold their consent to such a request and agree to indemnify CFCL for damages resulting directly from non-compliance with mandatory local disclosure requirements.

In most cases, the obligation to disclose is based on the domestic equivalent of a Companies Act, relevant investment funds act or anti-money laundering act and covers all security types.

In some instances, the obligation to disclose is based on stock exchange laws or regulations and only applies to listed domestic and foreign securities.

The Disclosure Requirements do not constitute legal advice and the Clients should seek independent professional advice in relation to fund securities deposited with CFCL, especially as, for those jurisdictions in which no disclosure obligation falls on CFCL, there may be separate disclosure requirements that apply directly to clients of CFCL, shareholders and beneficial owners.

Please note that CFCL is not always given comprehensive information or advised of changes affecting local disclosure requirements.

It remains the sole responsibility of the Client to ensure compliance with local disclosure requirements. If a requirement is not met, it is the Client who will be liable to any related penalty. Clients are therefore advised to seek independent legal advice on the existence and interpretation of local disclosure requirements.

In the case of a discrepancy between the general information contained in this document and the information provided by CFCL for a specific market, as applicable (irrespective of whether this information has been obtained from an agent of Clearstream Fund Centre, or, as the case may be, a foreign regulator of a branch of CFCL), the information provided by CFCL for the specific market as applicable, shall prevail.

N.B.: In all countries, if it is suspected that a disclosure obligation has been breached (for example, that a threshold of holdings under custody has been crossed without being reported), the regulators and the authorities may have the power to investigate. Moreover, in all countries, disclosure obligations might be triggered by enforceable judgements of the competent jurisdiction of the country in question.

Disclosure categories

Clearstream Fund Centre classifies disclosure scenarios according to the following market categories:

Category 1

Markets where disclosure by Clearstream Banking to issuers, investment fund managers and/or to regulators or market authorities is mandatory under applicable law;

Category 2

Markets where disclosure by Clearstream Banking of account holders to issuers, investment fund managers and/or foreign regulators or market authorities is a legal obligation in respect of securities in specific circumstances;

Category 3

Markets where there is no obligation for Clearstream Banking as custodian of Clearstream Fund Centre to disclose account holders to issuers, investment fund managers and/or regulators, notwithstanding any disclosure requirement falling directly on clients of Clearstream Banking, shareholders and/or beneficial owners or notwithstanding disclosure necessary to obey an enforceable judgement of the country in question.

Disclosure requirements – Register market 

Disclosure Category: 2

In the case of holding investment funds in Gibraltar, Clearstream Fund Centre (CFCL) may be required under the laws and regulations of Gibraltar to disclose, upon request, the identity, information, and holdings of CFCL clients and ultimate beneficial owners.

Consent

In order to comply with the applicable legislation, clients with holdings in Gibraltar investment funds or entering into transactions in the Gibraltar market must consent and are hereby deemed to consent to the required legal disclosure. Such consent includes the appointment of the requester (for example, the Fund Manager, Transfer Agent, Regulator, Tax authority) as their attorney-in-fact, under power of attorney, to collect from CFCL the required information to be disclosed. Clients who do not grant such authority cannot hold such investment funds or financial instruments in their accounts with CFCL.

Disclosure Requirements

Clients are advised that under local laws and regulations, investment funds and its agents may require CFCL, on request, to disclose information on CFCL clients and ultimate beneficial owners.

Background and legal basis

Disclosure of information on CFCL clients and ultimate beneficial owners may arise from the following Gibraltar laws and regulations:

• Section 23 of the Proceeds of Crime Act 2015 (“POCA”);
• Section 10A of the Proceeds of Crime Act 2015 (“POCA”) – the Registrar would need to verify that any person purporting to act on behalf of the client is so authorised and identify and verify the identity of the person;
• Proceeds of Crime Act 2015 (“POCA”) Section 6;
• Regulation 8 of the UBO regulations.

Sanctions

Non-compliance with the disclosure requirements may result in the fund manager or its agent refusing acceptance of the proposed investment, and/or mandatory redemption of the existing holdings. A person guilty of an offence under the disclosure requirements may be convicted to imprisonment for a term not exceeding six months or to a fine not exceeding level 5 on the standard scale or to both; or on conviction on indictment, to imprisonment for a term not exceeding fourteen years or to a fine or to both

Disclaimer

The information contained in the Disclosure Requirements is based on the legal opinion obtained by CFCL that was issued on 3 March 2022. CFCL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Disclosure Requirements do not constitute legal advice and Clients should seek advice from independent professional counsel.
Clients are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless, CFCL, for any loss, expense, liability, damage, or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.