Directive - Porcupine Absolute Return Fund Inc. (2011-08-15)

Summary

This is an enforcement directive issued by the British Virgin Islands Financial Services Commission under section 40(1)(b) of the Financial Services Commission Act, 2001, against a group of investment funds managed by Castlestone Management Incorporated, including Porcupine Absolute Return Fund Inc. and seventeen related funds. It imposes specific ongoing reporting and financial control restrictions on the named funds.

• Weekly reporting: The Funds must provide the Commission, on a weekly basis, full details of their activities.
• Internal controls: The Funds must provide the Commission with a proposal to implement more robust internal controls.
• Restriction on payments: The Funds must not make any payment of fees and expenses without the Commission's prior written consent, except for payments relating to fund administration services, brokerage, custody services, and audit and legal services.

The directive names eighteen funds under common management (Matter ID INV0811/092), reflecting a coordinated enforcement action rather than a rule of general application; it does not set out a stated end date or review period for the restrictions.

Key obligations

• The named Funds must provide the Commission with full details of their activities on a weekly basis.
• The named Funds must submit to the Commission a proposal to implement more robust internal controls.
• The named Funds must not pay any fees or expenses without prior written consent of the Commission, except for fund administration, brokerage, custody, audit and legal service fees.

Applies to

investment funds, Porcupine Absolute Return Fund Inc. and related funds managed by Castlestone Management Incorporated

Deadlines

• weekly: Funds must report full details of their activities to the Commission on a weekly basis