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Listing of Mutual Funds on the Irish Stock Exchange Back  
A walk through the basic procedures for listing mutual funds on the Irish Stock Exchange.
by LK Shields

The Irish Stock Exchange is a major listing centre for offshore Mutual Funds The first listing of an offshore Fund took place in 1989, and as at the date of this guide, there were 890 offshore funds listed on the Irish Stock Exchange. The reasons for the success of the Irish Stock Exchange include the low cost involved in and the relative efficiency of the listing process.

Application procedures
An application for listing of a Mutual Fund will be processed by a sponsoring member firm of the Irish Stock Exchange and generally Funds can be listed in approximately four to five weeks of the listing document being submitted to the Irish Stock Exchange for the first time.

Basic requirements for listing
The following basic requirements must be satisfied:

• the Fund must be set up in accordance with the laws of the jurisdiction of its establishment or incorporation;

• the persons responsible for managing the Fund must be shown to have integrity and suitable experience and expertise;

• Funds that are regulated by the Central Bank of Ireland are not required to have independent directors, but Funds that are not so regulated are required to have two directors who are independent of and who have no executive function with the Investment Manager/Advisor to the Fund or a related entity;

• the Trustee/Custodian of the Fund must be a separate legal entity from the Investment Manager, Administrator or Investment Advisor to the Fund but it may form part of the same group of companies;

• the securities of the Fund are required to be freely transferable but restrictions on transfer may be accepted for tax or regulatory reasons;

• the Fund’s investment policy should provide for an adequate spread of risk;

• a listing document must be prepared setting out all relevant information about the Fund demonstrating compliance with the Irish Stock Exchange’s listing rules, including disclosure of potential conflicts of interest involving persons responsible for managing the Fund and how these will be resolved;

• the application for listing must be sponsored by a member firm of the Irish Stock Exchange and the sponsoring firm must be satisfied that the Fund is suitable for listing and that the Directors of the Fund (or Directors of the Fund Manager in the case of a Unit Trust) understand the requirements of the Irish Stock Exchange, and

• the Directors of the Fund (or Directors of the Fund Manager in the case of a Unit Trust) must take personal responsibility for the information contained in the listing document.

Investment policy and restrictions
The following general investment restrictions apply to listed Funds:

• Funds are not permitted to take legal or management control over underlying investments, although venture capital Funds may exercise legal (but not management) control of underlying investments

• Funds are not allowed to invest more than 20 per cent of gross assets in the securities of any single issuer, although dispensations may be permitted up to 100 per cent in the case of:
(I) securities issued or guaranteed by sovereign issuers or certain public bodies;

(II) currency and derivative Funds;

(III) Index Tracker Funds which are confined to sophisticated investors. Immediate corrective action must be taken if it is discovered that any of these restrictions have been breached.

• except in exceptional circumstances and subject to shareholder approval, Funds are required to adhere to the investment objective and policy statement set out in the listing document for a minimum period of three years following admission to listing, and

• Funds which have commenced business prior to listing must disclose the initial investments made or to be made (if known).

Sophisticated investor funds
Funds must be confined to sophisticated investors if they are registered outside EU member states, Hong Kong, the Isle of Man, Jersey, Guernsey and Bermuda or if they are Property Investment Funds. Also, Funds which have an Investment Manager with Funds under management of less than USD 100 million must be confined to sophisticated investors.

Sophisticated investors are defined as those whose investment in a Fund is not less than $100,000 or the equivalent in another currency.

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