Stephen Carty, Investment Funds partner, Maples and Calder

On a longstanding basis there have been operational and regulatory challenges to efficiently terminating investment funds.

IOSCO has now published its final report on Fund Termination Good Practices – view the report in full here.

Based on the recommendations in this report, new and existing funds can now proceed to take proactive steps and develop the necessary tools to avoid many of the pitfalls that have previously prevented funds from terminating in an efficient manner.

Key elements that should be covered in a fund termination enhancement project include:

– putting in place an uncontactable investors policy and a residual assets policy;

– developing a standard form of termination plan in line with the detailed recommendations in the report; and

– making appropriate updates to the fund’s offering document (and constitutional document where appropriate) and considering, in the context of existing funds, the appropriate notifications/approvals from existing investors.

IOSCO Report on Good Practices for the Termination of Investment Funds