The Mutual Funds Act requires a mutual fund’s offering document to describe the interests it offers to investors in all material respects and to contain such other information as is necessary to enable a prospective investor to make an informed decision whether or not to invest. The mutual fund and/or its promoters or officers could also incur liability in respect of any offering document that contains misrepresentations of fact (made intentionally or negligently), so should take steps to ensure that any factual statements are correct and not misleading.
CIMA has also issued a Rule on Contents of Offering Documents – Regulated Mutual Funds, which sets out specific information that must be contained in any offering document issued by a mutual fund, including:
Basic information about the fund’s place and date of formation, type of entity, financial year and terms of its equity interests
Subscription and redemption procedures
Investment objectives and policy and any investment restrictions
Valuation methodology
Dividend/distribution policy
Material risks and any proposed borrowing
Remuneration of the operator, administrator, manager/ adviser, custodian, prime broker, auditors, legal counsel and any other service providers to the fund
Powers to enter into side letters
Accounting principles to be adopted and frequency of reporting to investors
Biographies of the directors/managers/principals of the fund, its general partner or trustee (as applicable) and its manager/adviser
Description of potential conflicts of interest
Summary of material contracts
Summary of material laws and regulations
Place where fund documents and periodic reports may be inspected and obtained
As part of the fund launch process CV5 Capital will circulate drafts of the fund managers offering memorandum (private placement prospectus/PPM) for input by the fund manager until it is in final form.
CV5 Capital is the leading solution for fund managers, emerging managers and well established managers, looking to launch a hedge fund or crypto fund. For more information, please contact us.
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