CFCL Investment regulation - Saint Vincent and the Grenadines
Reference
Holding restrictions – CSD Market
Disclaimer
The information contained in the Holding Restrictions is based on the legal opinion obtained by CBL that was issued on 28 November 2018. 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
There are no general restrictions on client residency for holdings held through CFCL. However, certain funds may impose specific restrictions on investor domicile. Clients must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions.
Restrictions on settlement
There is no general restriction on settlement on Saint Vincent and the Grenadines 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
Clearstream Fund Centre (CFCL) may be required to disclose the identity and holdings of clients and ultimate beneficial owners, upon request, in the case of holding of securities in Saint Vincent and the Grenadines (SVG) investment funds.
Consent
In order to comply with the local legislation, clients with holdings in SVG investment funds or entering into transactions in the SVG market must consent and are hereby deemed to consent to the required legal disclosure. Such consent includes the appointment of the requestor (for example, the Fund Manager, Transfer Agent, Regulator) 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 the local laws and regulations oblige CFCL to disclose the requested information on CFCL clients and ultimate beneficial owners to the party that is entitled by law to receive such information.
Under the SVG anti-money laundering (AML) laws and regulations, the Registrar/SVG investment fund are considered as “service providers”. Consequently, they are required to obtain client due-diligence (CDD) information on every customer, third party and beneficial owner.
The Financial Intelligence Unit of SVG (FIU) provides guidelines on the type of due-diligence information required and has the primary oversight on the enforcement of these requirements.
Background and legal basis
In the case of holding of securities in SVG investment funds, CFCL is obliged under the following legislation to disclose the identity and holdings of clients, third parties and/or ultimate beneficial owners.
- Mutual Funds Act Cap 154;
- Mutual Funds Regulations;
- Anti-Money Laundering and Terrorism Financing Regulations 2014.
Sanctions
No statutory penalties are expected to be imposed on CFCL or its clients for non-compliance. However, if CFCL’s clients/beneficial owners fail to comply with the disclosure request, the Investment Fund would commit an offence under the Mutual Funds Act and would be liable on summary conviction to a fine or imprisonment or both. The Investment Fund which did not receive the required documents may refuse subscriptions from CFCL in order to comply with the Mutual Funds Act and AML/KYC requirements.
Disclaimer
The information contained in the Disclosure Requirements is based on the legal opinion obtained by CBL acting as a sub-custodian for CFCL that was issued on 28 November 2018. 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.