Reserve International Liquidity Fund Ltd. - Public Statement No. 6 of 2009 (25 November 2009)

Summary

This is a public statement issued by the British Virgin Islands Financial Services Commission under Section 37A(4) of the Financial Services Commission Act, 2001, concerning Reserve International Liquidity Fund Ltd (the Fund). It informs the public that the Commission approved a third interim payment of a minimum of $200 million by the Fund from the proceeds of share redemptions, and it recaps the regulatory history leading to that approval.

• First Directive (17 October 2008): The Commission directed the Fund to suspend subscriptions, redemptions and payment of redemption proceeds, and to submit weekly reports on cash balances, investments, security liquidations and litigation.
• Amendment (13 January 2009): The First Directive was amended to allow the Fund to make interim redemption payments with the Commission's prior written approval.
• First interim payment: On 30 January 2009 the Fund paid $1.875 billion (about 65% of assets) to investors who had submitted redemption requests by 26 January 2009.
• Second interim payment: Approved 12 June 2009 and paid on 19 June 2009, totalling up to $400 million.
• Third interim payment: Approved 20 November 2009, a minimum of $200 million, conditional on the Commission receiving accounting validation of distributable amounts, confirmation of shareholder account balances pre and post payment, confirmation of payment details per distributee, and details of remaining assets to be distributed.
• Ongoing restriction: No further redemption proceeds payments may be made by the Fund without the Commission's prior written approval.

The statement is informational and specific to Reserve International Liquidity Fund Ltd; it does not impose new general requirements on other regulated entities. The Commission states it will continue to provide updates as matters progress.

Key obligations

• Reserve International Liquidity Fund Ltd must not make further payments of redemption proceeds without the Commission's prior written approval.
• Reserve International Liquidity Fund Ltd must submit weekly reports to the Commission covering cash balances, investment details, security liquidations, and ongoing litigation, per the First Directive.
• Before any interim redemption payment, the Fund must provide the Commission with accounting validation of distributable amounts, confirmation of shareholder account balances pre and post payment, per-distributee payment confirmation, and details of remaining assets.

Applies to

Reserve International Liquidity Fund Ltd (mutual fund)

Deadlines

• 20 November 2009: Commission approved the third interim payment of a minimum of $200 million by the Fund.