CLARIFICATION: INVESTMENT BY A CIS IN SECURITIES INTO A CIS IN HEDGE FUNDS
Information Circular No. 25 provides a clarification from the Registrar of Collective Investment Schemes (the Registrar) regarding the ability of a collective investment scheme (CIS) in securities to invest in a CIS in hedge funds.
Despite being declared as a CIS, a participatory interest in a portfolio of a hedge fund CIS is currently not included in the definition of securities under Board Notice 90 of 2014 (BN 90) for inclusion in a CIS in securities. (BN 90 stipulates the type of securities, classes of securities and assets that may be included in a portfolio of a CIS in securities).
In view of what is provided under BN 90, the Registrar has now clarified in Information Circular No. 25 that a portfolio of a CIS in securities may not invest in a hedge fund CIS, be it a retail or qualified investor hedge fund.
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