The Bermudan Government has passed new legislation, entitled the Investment Funds Act 2006, was passed unanimously in the House of Assembly shortly before Christmas.
The new legislation makes a clearly defined distinction between public (retail) funds and institutional or non-public funds; puts on place powers to exclude funds from particular requirements, so that there is certainty as to what minimum requirements must be met by fund operators; better defines exclusions from fund regulation to protect funds of a ‘private nature’; covers partnerships s well as mutual fund companies and unit trusts; regulates and licenses fund administrators; defines the rules for the appointment of service providers and the delegation of powers; enables unit trustees to hold property in segregated accounts and defines how these accounts will be managed; sets out rules for prospectuses of funds and how they are distinguished from the general rules under the Companies Act of 1981; gives the Bermuda Monetary Authority (BMA) enhanced powers to require more information and to inspect; sets out the requirements and powers for sharing of information with other regulators; and introduces a right of appeal to an appeal tribunal.
“BIBA’s collective investment scheme committee spent enormous hours scrutinizing, reviewing and suggesting changes throughout ongoing consultation with Government and the Bermuda Monetary Authority,” says Cheryl Packwood, CEO of BIBA. “The result is an Act that brings clarity and certainty about the process for registering and licensing funds and greatly enhances Bermuda’s competitive edge in the international fund community.”
Minister of Finance Paul Cox emphasizes the need for regulation in the fund investment industry.
“Regulation has become more important to the ongoing successful development of this sector,” he says. “To gain recognition in the global marketplace, the stakeholders of this sector support regulation.”