Section 25Part 5 — Duties and Powers of the Authority
Powers of Authority in respect of a pr ivate fund
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The Authority may take all or any of the actions specified in subsection
if it is satisfied that —
a private fund is or is likely to become unable to meet its obligations as they fall due;
a private fund is carrying on business fraudulently or otherwise in a manner detrimental to the public interest or to the interests of its investors or its creditors ;
a private fund is carrying on or attempting to carry on business or is winding up its business volun tarily in a manner that is prejudicial to its investors or creditors;
a private fund is carrying on or attempting to carry on business without complying with —
any condition of its registration imposed under this Act ; or
any other provision of this Act or of the Anti - Money Laundering Regulations (2025 Revision) ;
the direction and management of a private fund has not been conducted in a fit and proper manner; or
a person holding a position as a n operator , manager or officer of a private fund is not a fit and proper person to hold the respective position. ( 2 ) For the purposes of subsection (1), the actions the Authority may take in respect of a private fund are to — ( a ) cancel any registration under section 7 in respect of the private fund; ( b ) impose conditions or further conditions on any private fund and to amend or rev oke those conditions; ( c ) require the substitution of any promoter or operator of the private fund ; ( d ) appoint a person to advise the private fund on the proper conduct of its affairs; and ( e ) appoint a person to assume control of the affairs of the private fund .
If the Authority takes action under subsection ( 2 ), it may —
apply to the Grand Court for an order to take such other action as it considers necessary to protect the interests of investors in, and creditors of, the private f und ; and
subsequently, take any other action provided for under subsection (2) .
Where it considers it necessary or appropriate to do so, and if it is practical to do so, the Authority shall in form the investors of a private fund of any action it is taking or intending to take in respect of the private fund under this section.
A person appointed under subsection ( 2 )(d) or (e) is appointed at the expense of the private fund, and any expense incurred by the Authority by virtue of the appointment is an amount due to the Authority and payable by the private fund .
A person appointed under subsection ( 2 )(e) has all the powers necessary, to the exclusion of any operator, to administer the affairs of the private fund in the best interests of the investors and c reditors of the private fund , and to appoint delegates to assist in that task .
The powers referred to in subsection ( 6 ) include the power to terminate the business of the private fund .
A person appointed in respect of a private fund under subsection ( 2 )(d) or (e) shall —
when requested to do so by the Authority, supply the Authority with such information in respect of the private fund as may be specified by the Authority;
within three months of the person ’ s appointment, or within su ch other period as the Authority may specify, prepare and supply to the Authority a report on the affairs of the private fund making, where appropriate, recommendations in respect of the private fund ; and
if the person ’ s appointment is not terminated a fter supplying the report referred to in paragraph (b), supply to the Authority such other information, reports and recommendations as the Authority specifies.
If a person appointed under subsection ( 2 )(d) or (e) fails to comply with an obligation unde r subsection ( 8 ) or, in the Authority ’ s opinion, is not carrying out the person ’ s obligations in respect of the private fund satisfactorily, the Authority may revoke the appointment and appoint an other person under subsection (2)(d) or (e) .
On receipt of any information or a report under subsection ( 8 ) in respect of a private fund , the Authority may —
require the private fund to reorgani s e its affairs in a manner specified by the Authority;
if the private fund is a company incorporated under the Companies Act (2025 Revision) , apply to the Grand Court under section 94 of the Companies Act (2025 Revision) for the company to be wound up by the Grand Court in accordance with that Act ;
if the private fund is a foreign company as defined by section 18 3 of the Companies Act (2025 Revision), apply to the Grand Court for an order to wind up the foreign company ;
if the private fund is a limi t ed liability company, apply to the Grand Court under Part 8 of the Limited Liability Companies Act (2025 Revision) for the company to be wound up by the Grand Court in accordance with that Act ;
if the private fund i s a unit trust governed by the laws of the Islands, apply to the Grand Court for an order directing the trustee to wind up the private fund; or
if the private fund is a partnership governed by the laws of the Islands, apply to the Grand Court for an order to dissolve or wind up the partnership, and may take such action in respect of the appointment or continued appointment of the pers on appointed under subsection ( 2 )(d) or (e) as it considers appropriate.
If the Authority takes action under subsection (1 0 ), it may apply to the Grand Court for an order to take such other action as it considers necessary to protect the interests of investors and creditors of the private fund, and take any other action provided for in that subsection or subsection ( 2 ).
Where the Grand Court makes an order on an application made in accordance with subsection ( 10 )( e ), the Grand Court may grant the trustee such indemnity as it considers appropriate out of the assets of the private fund .
Without prejudice to any other power of the Authority, the Authority may, at any time, cancel any registration under section 7 in force in respect of a private fund if the Authority is satisfied that the private fund has ceased to carry on or to attempt to carry on business as a private fund or is winding up or is dissolved.
Nothing in this section shall be construed as limiting any power conferred on the Authority by section 24 or by any other provision of this Act or the regulations made under this Act .
In determining for the purposes of this Act whether a person is a fit and proper person, regard shall be had to all ci rcumstances, including that person ’ s —
honesty, integrity and reputation;
competence and capability; and
financial soundness.
Cross References
- Section 94 of Companies Act
Reference to Companies Act