A manager of a QI fund—
| (a) |
may only invite or permit qualified investors to invest in a QI fund; |
| (b) |
must ensure that only qualified investors, who have provided a declaration of their eligibility, are included in the QI fund; |
| (c) |
must employ a structure that limits the liability of an investor to give effect to the principle that an investor will not suffer a loss in excess of the value of its investment or contractual commitment in the QI fund; |
| (i) |
a custodian as contemplated in section 68 of the Act; or |
| (ii) |
an independent fund administrator, |
to perform the functions set out in section 70(1) to (3) of the Act;
| (e) |
must, where an independent fund administrator has been appointed as contemplated in sub paragraph (d), appoint a separate depository for safekeeping of the assets; |
| (f) |
may, where a custodian is appointed, appoint a separate depository for safekeeping of the assets; |
| (g) |
may include assets as set out in its founding documents in the Q1 fund, provided that the following principles are adhered to— |
| (i) |
the liquidity of securities may not compromise the liquidity terms of the portfolio; |
| (ii) |
securities based on the value of commodities may be traded, provided that— |
| (aa) |
the security is listed on an exchange; |
| (bb) |
specific disclosure is made to investors of the nature and extent of the exposure to physical delivery; |
| (cc) |
the liquidity terms of the QI fund are not compromised; and |
| (dd) |
the position is closed out before physical delivery is required. |
| (iii) |
securities must be subject to reliable valuation by the manager and must be negotiable and transferable; |
| (h) |
may only delegate the management of the assets of the portfolio to a hedge fund FSP. |
Special Investigating Units and Special Tribunals Act, 1996
