Consultation Paper - Framework Enhancements Introducing Sustainability Disclosures and Prohibition on the Use of Misleading Fund Names (2025-09-02)

Summary

This is a BMA consultation paper proposing two related enhancements to Bermuda's investment funds regulatory framework: new sustainability-related disclosure requirements for funds making sustainability claims, and a general prohibition on misleading fund names. The proposals would amend the Investment Funds Act 2006, the Investment Fund Offering Document Rules 2019, and the Investment Fund Rules 2019. Designated overseas funds are out of scope since the Authority does not regulate them. The Authority is seeking industry comment before finalising any rule changes.

• Sustainability disclosures: Funds that make sustainability-related claims would need to provide enhanced, accurate, clear and substantiated disclosures covering investment objectives/focus, investment strategy and sustainability criteria, risks and limitations, reference benchmarks, valuation methodology, conflicts of interest, and ad hoc sustainability reporting.
• Material change notification: If a fund's investment objectives cease to include sustainability-related considerations, this would be treated as a material change requiring notification to both the Authority and investors.
• Misleading fund names prohibited: The Investment Fund Rules 2019 would be amended to prohibit fund names that do not accurately reflect a fund's actual business activities (e.g. sustainability or ILS-related terms used by funds that do not pursue those strategies); this would apply to all funds, not just those with sustainability claims.
• Remediation for breaches: A fund found in breach of the naming prohibition would be required to take corrective measures, such as renaming the fund or revising its strategy, guided by implementation criteria to be added to the Investment Funds Guidelines.
• Transitional period proposed: The Authority proposes a six-month transitional period for all Bermuda-authorised and registered funds on the Investment Funds Act register to comply with the amended legislation once finalised.

As a consultation paper, this document does not itself impose binding obligations; it invites stakeholder feedback on the proposed changes before they are enacted through amendments to the Act and related rules.

Key obligations

• Interested stakeholders must submit comments on the proposals to policy@bma.bm no later than 25 November 2025
• Once enacted, funds making sustainability-related claims will be required to disclose accurate, clear, complete and substantiated information on investment focus/objective, strategy, risks, benchmarks, valuations, conflicts of interest and ad hoc reporting
• Once enacted, funds will be required to notify the Authority and investors when a fund's investment objectives cease to include sustainability-related considerations, as a material change
• Once enacted, Bermuda-authorised and registered funds must ensure fund names accurately reflect their business activities and will need to remedy any breach (e.g. by renaming the fund or revising its strategy)
• Funds on the Investment Funds Act register would have a proposed six-month transitional period to comply with the amended legislation once finalised

Applies to

Bermuda-registered and authorised investment funds, funds making sustainability-related claims, fund operators

Deadlines

• 25 November 2025: Deadline for stakeholders to submit comments on the consultation paper to policy@bma.bm
• six-month transitional period: Proposed transitional period for Bermuda-authorised and registered funds on the Investment Funds Act register to comply with the amended legislation once enacted