Tuesday, January 05, 2010

BVI FSC Updates the Status of Reserve International Liquidity Fund

The BVI FSC issued the sixth public statement concerning the status of Reserve International Liquidity Fund Ltd. The first directive on the Fund was issued by the Commission in October 2008, upon receiving the complaints from investors and allegations that the Fund has improperly valued its bond holdings. It required from the Fund to suspend shares redemption and to pay redemption proceeds to the Fund investors.

On January 13 2009, the Commission amended the first directive to allow the fund to make interim payments of redemptions proceeds, with the prior written consent of the Commission. The first interim payment in the amount of US$1.875 billion was made on 30 January 2009 to investors who had submitted redemption requests on or before 26 January, 2009; the second amount of US$400 million was approved by the Commission and paid to shareholders in June 2009.

By the document issued on November 20, 2009, the BVI FSC approved the third interim payment of minimum US$200 million by the Fund through the proceeds of the redemption of shares.

According to the document, the approval is subject to receipt by the Commission of the following information: accounting validation of distributable amounts, confirmation of the balance on the shareholders' accounts prior to and post payment of the proceeds of shares redemption, confirmation of the payment to be made to each shareholder, and details of the remaining assets to be distributed.

Also, in accordance with the amendment to the first directive, no other payments of the proceeds of the redemption of shares will be made by the Fund without the Commission's prior written consent.

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