Public Statement No. 1 of 2009 (2009-01-13) - Reserve International Liquidity Fund Ltd.

Summary

This is a Public Statement issued by the British Virgin Islands Financial Services Commission (BVI FSC) concerning Reserve International Liquidity Fund Ltd. It announces that the Commission has amended an earlier enforcement directive against the Fund, following the Fund's submission of a liquidation and distribution plan.

Background: on 17 October 2008 the Commission had directed the Fund to suspend subscriptions and redemptions of shares and payment of redemption proceeds, and to submit weekly reports on cash balances, investments and litigation. After the Fund submitted and revised a Plan of Liquidation and Distribution of Assets (including a proposal to amend its Articles of Association to permit interim redemption payments), the Commission agreed to lift part of the suspension.

• Suspension lifted: The Commission removed the suspension on redemption of shares and payment of redemption proceeds, allowing the Fund to make the interim payment proposed in its 31 December 2008 letter.
• Condition precedent: The lifting of the suspension is conditional on the Commission receiving the duly executed directors' resolution amending the Fund's Articles of Association and the duly filed amended Articles.
• Ongoing restriction: After the first interim redemption payment is made, the Fund must not make any further redemption payments without the Commission's prior written consent.

The statement is issued under Section 37A(4) of the Financial Services Commission Act, 2001 to inform the public and protect investors and creditors of the Fund; it is specific to this named fund rather than a general rule for the industry.

Key obligations

• Reserve International Liquidity Fund Ltd must provide the Commission with the duly executed directors' resolution amending its Articles of Association and the duly filed amended Articles before the interim redemption payment is permitted
• After making the first interim payment of redemption proceeds described in its 31 December 2008 proposal, the Fund must not make any further redemption payments without the Commission's prior written consent

Applies to

mutual funds, Reserve International Liquidity Fund Ltd