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Sai Kung Orchard Partners invites the public to contribute to a scheme that buys and runs fruit farms as one business, sharing the profits with contributors. Contributors vote quarterly and may give directions but do not run the farms day to day. Is this a collective investment scheme under the SFO?
Paragraph (a) of the definition applies to arrangements 'in respect of any property' where (i) participants do not have day-to-day control over management, 'whether or not they have the right to be consulted or to give directions'; (ii) the property is managed as a whole, or contributions and profits are pooled; and (iii) the purpose is for participants to receive profits, income or other returns from the property. All three are met here. Voting and giving directions are expressly not day-to-day control. The property can be anything, including farms. The legal form does not matter: the definition looks at the arrangement, not whether it is a trust or a company. Source: SFO (Cap. 571) Sch. 1 Pt 1 s.1, definition of 'collective investment scheme', para (a) (as at October 2026).
Candidates assume a right to vote or direct means control. The definition says the right to be consulted or give directions does not stop it being a CIS.
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