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  • CIU-B.5 CIU-B.5 Categories of CIUs

    • Retail CIUs

      • CIU-B.5.1

        Retail CIUs are CIUs that may be offered to all types of investors.

      • CIU-B.5.2

        The requirements in this Module are framed such that retail CIUs are subject to relatively detailed requirements, including restrictions on the types of financial instruments or other assets that may be held in the CIU, in order to limit risks to the general investor.

    • Expert CIUs

      • CIU-B.5.3

        Expert CIUs are CIUs that may be offered only to expert investors, and impose a minimum initial investment of USD 10,000 (or equivalent in foreign currency).

      • CIU-B.5.4

        Expert CIUs are subject to less restrictive requirements than retail CIUs: specifically, expert CIUs have greater investment flexibility, notably in terms of asset classes and risk concentration limits. They therefore potentially offer higher risks and are therefore only suitable for expert investors, who are better able to assess those risks than less sophisticated investors.

      • CIU-B.5.5

        The minimum initial investment requirement specified in Rule CIU-B.5.3 means that the first payment made by an investor into the CIU must be at least USD 10,000 (or its equivalent in foreign currency). Subsequent investments may be for smaller amounts.

      • CIU-B.5.6

        Expert investors are:

        (a) Individuals holding financial assets (either singly or jointly with their spouse) of USD 100,000 or more;
        (b) Companies, partnerships, trusts or other commercial undertakings, which have financial assets available for investment of not less than USD 100,000; or
        (c) Governments, supranational organisations, central banks or other national monetary authorities, local authorities and state organisations.
        Amended: July 2007

    • Exempt CIUs

      • CIU-B.5.7

        Exempt CIUs are largely unregulated CIUs that may be offered only to accredited investors, and impose a minimum initial investment of USD 100,000 (or equivalent in foreign currency).

      • CIU-B.5.8

        Exempt CIUs are only regulated to the extent that they must register with the CBB prior to being offered to investors; may only be offered to accredited investors; and are subject only to high-level disclosure and reporting requirements. They are not subject to any restrictions on their investment policies, as a result of which they may exhibit high risk characteristics, such as high levels of leverage and the taking of large speculative positions. Because of this, exempt CIUs may only be offered to a highly restricted investor base (i.e. those defined as accredited investors).

      • CIU-B.5.9

        The minimum initial investment requirement specificed in Rule CIU-B.5.7 means that the first payment made by an investor into the CIU must be at least USD 100,000 (or its equivalent in foreign currency). Subsequent investments may be for smaller amounts.

      • CIU-B.5.10

        Accredited investors are:

        (a) Individuals holding financial assets (either singly or jointly with their spouse) of USD 1,000,000 or more;
        (b) Companies, partnerships, trusts or other commercial undertakings, which have financial assets available for investment of not less than USD 1,000,000; or
        (c) Governments, supranational organisations, central banks or other national monetary authorities, and state organisations whose main activity is to invest in financial instruments (such as state pension funds).
        Amended: July 2007

      • CIU-B.5.11

        Note that the definition of accredited investors, compared to that of expert investors, not only imposes higher liquid asset thresholds, but also prevents local authorities, as well as state organisations whose main activity is not related to investing in financial instruments, from investing in exempt funds. Investors that satisfy the definition of accredited investor also satisfy the definition of expert investor.

    • Overseas Domiciled CIUs

      • CIU-B.5.12

        Overseas domiciled CIUs are classified as retail CIUs, expert CIUs, or exempt CIUs, depending on whether they fall under the same or equivalent definitions as those provided in Rules CIU-B.5.1, CIU-B.5.3 and CIU-B.5.7.

      • CIU-B.5.13

        If a relevant person is in doubt as to which of the definitions provided in Rules CIU-B.5.1, CIU-B.5.3 and CIU-B.5.7 an overseas domiciled CIU satisfies, that person must consult with the CBB to confirm the classification of the CIU in question.