The new announcement published by the BVI FSC has the purpose to inform public on the changes in the status of the BVI-domiciled Reserve International Liquidity Fund Ltd.
Along with the new Directive, the Commission named all the actions taken and correspondence submitted by the Fund which led to the new resolution. The amendments are added to its previous enforcement directive against the Reserve Fund, issued in October 2008, which required from the Fund to take some actions in connection with ongoing litigation involving the Fund and initiated by its investors. In November 2008, the Fund submitted a draft Plan of Liquidation and Distribution of Assets to the Commission. A month later, the Commission conducted a detailed review of the proposals and sent its requirements to the Fund. In its response on 8 December 2008, the Fund addressed some FSC requirements, but failed to address most essential issues.
On 31 December 2008, the BVI Fund submitted an amended proposal for the payment of the proceeds of the redemption of shares, where proposed to amend its Articles of Association to permit the Fund to make interim payments as partial payment of redemption requests of its investors, and expected to make the first payment of approximately $1.6 billion.
By the Amended Directive, published on January 13, 2009, the Commission removed the suspension on shares redemption and the payment of redemption proceeds to the Fund investors. In accordance with this resolution, the BVI Fund will be able to make an interim payment of the proceeds of redemption of shares, in accordance with its proposal submitted on 31 December. The Commission also directed that, following the first interim payment of redemptions proceeds, no further payments should be made without the Commission's prior written consent.
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