MAS Suspends 3 Non-Retail Collective Investment Schemes

Singapore, 18 June 2004...The Monetary Authority of Singapore (MAS) today suspended 3 foreign collective investment schemes to protect the interests of the investing public. 

2   The 3 schemes are CSA Absolute Return Fund, CSA Absolute Return Fund (Dublin) Ltd and CSA Absolute Return Plus Fund.  They were offered to sophisticated investors only.

3   With immediate effect, no further subscriptions to the 3 schemes can be made in Singapore.  MAS advises investors not to subscribe, and distributors to stop accepting further subscriptions.  MAS also directed the schemes to inform investors, whose applications have not been processed, that they can cancel their subscriptions.  

4   MAS' action follows the restriction notice by the Hong Kong Securities and Futures Commission (HK SFC) on 15 June 2004 to prohibit the manager of the schemes, Charles Schmitt and Associates Limited (CSAL), from carrying on fund management, investment advisory and corporate finance activities.  The notice was issued on suspicion that client assets might have been misappropriated from the CSA Absolute Return Fund.

5   MAS is in contact with the HK SFC, which is currently investigating the matter.

6   Besides the above 3 schemes, CSAL does not manage any other collective investment scheme being offered in Singapore.

***

Notes to Editors:

1   CSAL is licensed under the Hong Kong Securities and Futures Ordinance for advising on securities, corporate finance and asset management. CSAL is neither a licensed nor exempt fund manager in Singapore; CSAL is not regulated by MAS.

2   For a foreign scheme to be recognised for offer to sophisticated investors, the manager of the scheme must be licensed or regulated in its home jurisdiction and be a fit and proper person. [please see Securities and Futures (Offers of Investments) (CIS) Regulations 2002 Fifth Schedule paragraph 3]. Restricted schemes offered only to sophisticated investors are not subject to the investment guidelines and other requirements in the Code on Collective Investment Schemes.

3   The CSA Absolute Return Fund was recognised for offer to sophisticated investors on 30 Dec 2002. The CSA Absolute Return Fund (Dublin) Ltd and the CSA Absolute Return Plus Fund were recognised on 11 March 2004.

4   As defined in section 305 of the Securities and Futures Act, "sophisticated investor" means -

(a)  a person who acquires units in a collective investment scheme, pursuant to the offer or invitation in question, as principal if the aggregate consideration for the acquisition is not less than $200,000 (or its equivalent in a foreign currency) for each transaction whether such amount is paid for in cash, by exchange of shares or other assets; or

(b)  a person who acquires units, pursuant to the offer or invitation in question, as principal and

(i)  whose total net personal assets exceed $2 million (or its equivalent in a foreign currency) or whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) at the time of the acquisition; or

(ii)  in the case of a corporation, whose total net assets exceed $10 million in value (or its equivalent in a foreign currency) as determined by the last audited balance-sheet of the corporation, or (if the corporation is not required to prepare audited accounts) a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance-sheet, which is a date that is no earlier than 12 months before the date on which the offer or invitation is made to the corporation; or

(c)  an officer of the person making the offer or invitation or a spouse, parent, brother, sister, son or daughter of that officer or of the person making the offer or invitation, if he is an individual.