The Board of the International Organization of Securities Commissions (IOSCO) has published 14 good practices on the voluntary termination of investment funds that seek to protect investors’ interests during the termination process.
The 14 good practices are categorized under the following five headings: Disclosure at Time of Investment, Decision to Terminate, Decision to Merge,During the Termination Process andSpecific Types of Investment Funds
IOSCO in a statement said this is contained in its final report titled: IOSCO Report on Good Practices for the Termination of Investment funds.
It also highlighted the importance for investment funds, adopting termination procedures that take into account investor protection issues. It stressed that the decision to terminate an investment fund can have a significant impact on investors, including their ability to withdraw their funds in a timely manner.
The good practices apply to voluntary terminations, as legislation at a national level in most jurisdictions addresses involuntary terminations, such as those caused by insolvency. Voluntary terminations typically occur because an investment fund, although still solvent, is no longer economically viable or can no longer serve its intended objectives.
The report sets out additional good practices for the voluntary termination of investment funds with illiquid or hard-to-value securities, such as commodity funds, real estate funds or hedge funds.
IOSCO is the leading international policy forum for securities regulators and is recognized as the global standard setter for securities regulation. The organization’s membership regulates more than 95 percent of the world’s securities markets in more than 115 jurisdictions and it continues to expand.
The IOSCO Board is the governing and standard-setting body of the International Organization of Securities Commissions (IOSCO) and is made up of 34 securities regulators. Ashley Alder, the Chief Executive Officer of the Securities and Futures Commission (SFC) of Hong Kong, is the Chair of the IOSCO Board. The members of the IOSCO
Board are the securities regulatory authorities of Argentina, Australia, Belgium, Brazil, China, Egypt, France, Germany, Hong Kong, India, Indonesia, Ireland, Italy, Jamaica, Japan, Kenya, Malaysia, Mexico, Morocco, Nigeria, Ontario, Pakistan, Quebec, Saudi Arabia, Singapore, South Korea, Spain, Sweden, Switzerland, theNetherlands, the United Kingdom, and the United States of America.