Discussion Paper - Development of a Bermuda AIFM Regime - November 2014

Summary

This is a 2014 discussion paper in which the Bermuda Monetary Authority sets out its thinking on creating a voluntary Bermuda AIFM (Alternative Investment Fund Manager) opt-in regime, modelled on the EU AIFMD, and invites industry feedback. It does not itself create binding rules; it summarises the existing Bermuda funds framework, outlines the EU AIFM requirements the BMA expects to mirror, and raises open questions for stakeholder input on how such a regime would be implemented via amendments to the Investment Business Act 2003 and new AIFM regulations.

• Purpose: Invites industry views on establishing an opt-in Bermuda AIFM regime to help Bermuda fund managers market into the EU under AIFMD, without affecting managers who do not market in Europe.
• Proposed legal mechanism: Amend the Investment Business Act 2003 to create an enabling framework, with detailed EU-style AIFM requirements (capital, organisational, operating, depositary and transparency rules) set out in new Bermuda AIFM regulations.
• Topics under discussion: Initial capital and own funds thresholds, delegation and letter-box entity restrictions, risk/portfolio management separation, remuneration policy, depositary arrangements, transparency and reporting on material changes, and treatment of leverage and AUM thresholds.
• Fees: Possible amendment to the Bermuda Monetary Authority Act 1969 to allow fees on opt-in AIFMs commensurate with supervision costs; no final decision reached.
• Feedback request: Stakeholders are asked to comment on the broad implications of the regime and on the specific discussion points and policy options highlighted in italics throughout the paper.

As a discussion paper, it does not impose binding compliance obligations on any regulated entity at this stage; it is a consultation intended to shape future legislation and regulations for those who choose to opt into a Bermuda AIFM regime.

Key obligations

• Stakeholders wishing to comment must submit feedback to policy@bma.bm by 9 January 2015

Applies to

Bermuda fund managers, investment business licensees under the Investment Business Act 2003, Bermuda investment funds under the Investment Funds Act 2006, prospective Bermuda AIFMs (opt-in managers), fund administrators

Deadlines

• 9th January 2015: Deadline for industry stakeholders to submit feedback on the discussion paper to policy@bma.bm