THE UNITS TRUSTS ACT

27th April 197

PART I - Preliminary

 
1. This Act may be cited as the Unit Trusts Act. 

2.-(1) In this Act- Interpretation. "bank" means a commercial bank as defined in subsection (1) of section 2 of the Bank of Jamaica Act; 

"broker" means any person who carries on the business of doing any of the following things as an agent, that is to say, contriving, making, or concluding bargains or contracts for the acquisition or disposal of securities; 

"building society" means a society incorporated under the Building Societies Act;  "Commission" means the Financial Services Commission,, established under section 3 of the Financial Services Commission Act; 

"corporation" means any body corporate, whether incorporated in Jamaica or elsewhere;

 "debentures" means any debentures, debenture stock or bonds of a corporation, whether constituting a charge on the assets of the corporation or not;

 "life insurance company" means any corporation whose business involves the issue of policies of life insurance; 

"Minister" means the Minister responsible for finance, and references to the Minister in any provisions of section 164 of the Companies Act, shall be construed accordingly in the application thereof pursuant to any of the provisions of section 19; 

pensions" includes compensation, unemployment, retirement or superannuation allowances, and other allowances of a like nature; 

"industrial and provident society" means a society registered under the Industrial and Provident Societies Act; 

"registered unit trust scheme" means any unit trust scheme which is registered under Part II; 

"salesman" means any person who as a servant or agent of the manager under any registered unit trust scheme, or of a bank, broker or life insurance company, or of any institution approved by order of the Minister, does any of the following things, that is to say, making or offering to make with any other person, or inducing or attempting to induce any other person to enter into or offer to enter into, any agreement for, or with a view to, the disposal of any of the units under a registered unit trust scheme to such other person, not being the manager or trustee under the scheme; 

"securities" means- 

(a) shares or debentures, or rights or interests (described whether as units or otherwise) in any shares or debentures; or 

(b) securities of the Government of Jamaica or of any country or territory outside Jamaica; or 

(c) rights (whether actual or contingent) in respect of money lent to, or deposited with, any industrial and provident society or building society, and includes rights or interests (described whether as units or otherwise) which may be acquired under any unit trust scheme under which all property for the time being subject to any trust created in pursuant of the scheme consists of such securities as are mentioned in paragraphs (a), (b) and (c) of this definition or in any of such paragraphs;

(4) For the purposes of this Act, a person shall be deemed to be a director of a corporation if he occupies in relation thereto the position of a director, by whatever name called, or is a person in accordance with whose directions or instructions the directors of the corporation or any of them act:

Provided that a person shall not, by reason only that the 0 directors of a corporation act on advice given by him in a professional capacity, be taken to be a person in accordance
with whose directions or instructions those directors act.

(5) Any reference in this Act to business involving, or which involved, the acquisition or holding or disposal of any securities includes a reference to business involving, or which involved, their acquisition or holding or disposal, as the case may be, in the capacity of an agent.

3. The Commission shall be responsible for the general administration of this Act.

5.-(1) Upon application in that behalf being made in the prescribed manner to the Commission, it may register any unit trust scheme in relation to which it is satisfied-

1. (a)  that each of the persons who are respectively the manager and the trustee under the scheme is a corporation incorporated under the law of Jamaica and having a place of business in the Island at which
   notices and other documents are received on behalf of the corporation;

2. (b)  that the scheme is such that the effective control of each corporation which is the manager or trustee under the scheme is and will be exercised independently of the other such corporation;

(c) as respects the corporation being the trustee, either-

1. (i)  that the corporation has a capital (in stock or shares) for the time being issued of not less than one million dollars, of which an amount of not less than five hundred thousand dollars has been paid up, and that the assets of the corporation are sufficient to meet its liabilities (including liabilities in respect of the repayment of its capital); or

2. (ii)  that more than four-fifths of the said capital of
   the corporation is held by another corporation, being a corporation in relation to which the
   conditions as to capital and assets specified in sub-paragraph (i) are fulfilled;

(d) that the carrying on of business pursuant to the scheme would not be inexpedient in the public interest; and

(e) that the scheme is such as to secure that any trust created in pursuance thereof is expressed in a deed providing, to the satisfaction of the Commission, for the matters specified in the Schedule (references therein to units being references to securities, described whether as units or otherwise, which may be created in pursuance of the scheme):

Provided that the Commission may dispense with all or any of the foregoing requirements of this paragraph in relation to any trust, so far as it appears to it that it can properly do so without prejudicing the interests of the beneficiaries, if it is satisfied that the fulfillment of such requirements in relation to the trust is impracticable by reason of the special circumstances thereof; and that the officers and members of the corporation referred to in paragraph (a) are fit and proper persons as described in subsection(4).

(2) The Commission may, with the approval of the Minister by regulations made under this Act, amend the Schedule, so, however, that no amendment shall affect any scheme which was registered under subsection (1) prior to the

making of the amendment.

(3) Where the Commission registers any unit trust scheme it shall cause notice of such registration to be published in the Gazette, and where it refuses any such application as aforesaid, the applicant shall be served with the Commission’s written notice of such refusal and the reasons therefor shall be given in the notice.

(4) For the purposes of subsection (1) (f) a person is a fit and proper person if he is a person-

(a) who, whether in Jamaica or elsewhere-

(i) has not been convicted of an offense involving dishonesty; or

(ii) is not an undischarged bankrupt; whose employment record does not give the Commission reasonable cause to believe that he carried out any act involving impropriety in the handling of securities; who, in the opinion of the Commission, is a person of sound probity, is able to exercise competence, diligence and sound judgment in fulfilling his responsibilities in relation to the unit trust scheme and whose relationship with the unit trust scheme will not threaten the interests of investors, and for the
purpose of this paragraph the Commission shall have
regard to any evidence that he has-

1. (i)  engaged in any business practice appearing to the Commission to be deceitful or oppressive or otherwise improper which reflects discredit to his method of conducting business;

2. (ii)  contravened any provision of any enactment designed for the protection of the public against financial loss due to dishonesty, incompetence or malpractice by persons concerned in the provision of securities or due to bankruptcy.

Within the prescribed period after service of any notice under subsection (3) of section 5, the person so served may bring an appeal against the decision of the Commission in the prescribed manner.

(2) Every such appeal shall be made to the Tribunal, who shall, &er considering the appeal, give its decision in writing and may either-

(a) confirm the Commission's decision; or
(b) direct the Commission to register the relevant unit trust scheme,

9.-(1) Subject to subsection (3), no person, except a salesman acting as such under the authority of a licence granted to him under this Part, shall do or purport to do (whether as a principal or otherwise) in Jamaica any of the following things in the course or Mherance of business involving the disposal of any of the units under a registered unit trust scheme, that is to say, making or offering to make with any other person, or inducing or attempting to induce any other person to enter into or offer to enter into, any agreement for, or with a view to, the disposal of any of those units to such other person, not being the manager or trustee under the said scheme.

(2) Every person who contravenes subsection (1) shall be guilty of an offence and shall be liable-

(a) on conviction on indictment in a Circuit Court, to a fine or to imprisonment for a term not exceeding five years or to both such fine and imprisonment;

(b) on summary conviction in a Resident Magistrate's Court, to a fine not exceeding two million dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

(3) No person shall be deemed to have contravened subsection (1) by reason only of his having-

(a) effected any transaction with, or through the agency of, any person acting as a salesman under the authority of a licence granted to him under this Part; or

(b) made or caused any such distribution as is mentioned in subsection (4) of section 23.

(4) NopersonshallbelicensedunderthisPartunlesshe is registered thereunder and, if he is an undischarged bankrupt, unless the Court which adjudged him bankrupt has granted him leave to perform the actions of a salesman.

10.41) Upon application in that behalf being made by any individual in the prescribed manner to the Commission, it may register the applicant.as a salesman if it is satisfied-

(a) that the applicant is employed by a manager under any registered unit trust scheme, or by a bank, broker or life insurance company, or by an institution approved by order of the Minister, that has made effective arrangements for the provision to persons so employed of good and sufficient training in the proper performance of the functions of a salesman;

11.-(1) Within the prescribed period after service of any notice under subsection (2) of section 10, the person so served may bring an appeal under this section in the prescribed manner.

13.-(1) SubjecttotheprovisionsofthisPart,the registration of any person as a salesman shall entitle him,upon payment of the prescribed fee, to be granted a licence issued in the prescribed form by the Commission and such licence shall remain in force until the 31st of March next after its effective date as specified therein, and no longer, but without prejudice to the licensing in accordance with this subsection after the 31st March aforesaid of the person so registered.

(2) A licence issued in accordance with subsection (1) shall be granted subject to such conditions, if any, as may be specified therein, and may be suspended or revoked by the Commission where there has been any breach of the conditions so specified.

(3) If, at any time during the period for which a licence has been granted to any person, he becomes disqualified by virtue of subsection (4)of section 9 from being licensed, the licence so granted shall thereupon determine.

14. (1) The Commission may cause to be served on any person registered under this Part notice in writing that it proposes to cancel such person's registration, and shall in such notice give the reasons for such proposal and inform the person of the right of appeal conferred by section 15, if at any time the Commission is satisfied that the person has committed a breach of any of the Q conditions specified in his licence; circumstances are no longer such, in the case of the said person, that the like question with reference to him as is mentioned in paragraph (d)of the said subsection may be resolved in his favour; such registration was procured as a result of any misleading or false representation or in consequence of any incorrect information, whether such representation or information was made or supplied wilfully or otherwise; or such person has not hctioned as a salesman during any continuous period of one year after the date of such registration.

16.-(1) Where no appeal with respect to a proposal of the Commission under section 14 is made in accordance with section 15 or, if made, is withdrawn or results in confirmation of the Commission’s proposal, or in a direction subject under subsection(2)ofsection15toanyconditionandthesameisnot complied with t o the Commission’s satisfaction, the Commission shall give effect to its proposal. 

18A. (1) Every manager of a unit trust scheme shall keep proper accounts and other records in relation to its business in 2 such forms will permit-

(a) accurate recording of income, expenses, assets and liabilities; and

(b) adequate auditing of the matters referred to in paragraph (a);and

(c) the preparation of profit and loss accounts and balance sheets.

(2) Amanagershallappointannuallyanauditorfroma panel of persons approved by the Commission as being qualified by training and experience to audit the accounts of the unit trust scheme.

(3) Accounts of each unit trust scheme shall be audited annually by the auditor appointed pursuant to subsection (2), and each such unit trust scheme shall, within three months after the end of its financial year, submit a statement of its accounts so audited to the Commission and the report of the auditor thereon.

(4) The audited financial statements and the auditor’s report thereon shall be made available by the Commission for inspection by any persons upon payment of such fee as may be prescribed.

19.- (1) The Commission may appoint one or more competent inspectors to investigate and report on the administration of any registered unit trust scheme. 

20. (1) The inspectors appointed to investigate any registered unit trust scheme may make in their report (whether interim or final) any recommendations considered by them to be necessary for the administration of the scheme with due efficiency or economy.

(2) After consultation with the manager and trustee under the scheme, the Commission may, by notice in writing served on them or either of them, as the case may require, direct that effect be given within a specified time to all or any of the recommendations made in pursuance of subsection (1):

Provided that the Commission shall not be bound to consult with any manager or trustee that fails to avail itself of such reasonable opportunity for consultation as the Commissions hall provide.

21. (1) If, for the prevention or detection of any offence indictable under any provisions of this Act, there exist reasonable grounds so to do, the Commission may, at any time-

(a) by notice in writing to any person to whom this subsection applies, give directions requiring that person to produce such books or papers, at such time and place, as may be specified in the directions; or

(b) require any person to whom this subsection applies, or authorize any person to require him, to produce forthwith such books or papers as may be specified by the Commission or (as the case may be) that authorized person acting on like grounds, who shall, for the purpose of exercising such authority, produce evidence thereof if he be requested so to do.

(2) Subsection (1) applies to a person who is or was registered as a salesman under Part 111, and to any person who appears to the Commission, or any person authorized by the Commission under subsection (l) , to be in possession or to have
control of any books or papers the production of which it was competent for the Commission or such authorized person to require under subsect

22.-(1) Every person who, by any Statement, promise or forecast which he knows to be misleading, false or deceptive,or by any dishonest concealment of material facts, or by the reckless making of any statement, promise or forecast which is misleading, false or deceptive, induces or attempts to induce another person-

(a) to enter into or offer to enter into any agreement for, or with a view to, acquiring any of the units under a registered unit trust scheme;

24.-(1) Every person who, in furnishing any information for any of the purposes of this Act or regulations made thereunder, makes any statement which, to his knowledge, is false in a material particular, or recklessly makes a statement which is false in a material particular, shall be guilty of an offence against this Act.

(2) Every person who destroys, mutilates, falsifies or makes .any false entry in, any document which is required by virtue or in pursuance of any provisions of Part IV to be produced, or of which it is reasonable to suppose that production might be so required, shall be guilty of an offence against this Act, unless he proves that, in so doing, he had no intention to deceive or suppress information so as to contravene the law.

25. Where any offence against this Act committed by a corporation is proved to have been committed with the consent or connivance of any director, manager, secretary or other officer of the corporation,he,as well as the corporation, shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

26. Where any offence committed under section 9 by any person in relation to units under any registered unit trust scheme 3 is proved to have been committed with the consent or connivance of any other person whose business involved the disposal of such units, that other person, as well as the first-mentioned person, shall be deemed to be guilty of the said offence and shall be liable to be proceeded against and punished accordingly. 

27. Every person who is guilty of an offence against this Act for which no other penalty is provided shall be liable-

(a)on conviction on indictment in a Circuit Court to a fine or to imprisonment for a term not exceeding three years or to both such fine and imprisonment;

(b) on summary conviction in a Resident Magistrate's Court to a fine not exceeding two million dollars or to imprisonment for a term not exceeding two years, or to both such fine and imprisonment.

28. (1) The Commission may, with the approval of the

Minister, make regulations for the better carrying out of the provisions of this Act and, in particular, but without prejudice to the generality of the foregoing, such regulations may make provision in relation to all or any of the following-

1. the prescribing of anything authorized or required by virtue of this Act to be prescribed;
2. the books, accounts, and other documents to be kept, in relation to business conducted pursuant to registered unit trust schemes, by managers and trustees thereunder, and by salesmen and any persons whose business involves the acquisition, holding or disposal of any of the units thereunder;
3. the finishing to the Commission, or persons authorized in that be half by it, of information relating to any business conducted as aforesaid;
4. the conduct of business by persons who act as salesmen;
5. prescribing requirements which shall, in relation to any such circulars as mentioned in section 23, be observed, whether for the purpose of its being lawful to distribute or possess them, or to cause their distribution, as provided by subsection (3) or (4) of section 23 or otherwise;

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