Notice - Investment Funds Amendment Act 2013 (draft Bill for consultation) (2013-07-09)

Summary

This is a Bermuda Monetary Authority (BMA) consultation notice, dated 9 July 2013, presenting a draft Bill to amend the Investment Funds Act 2006. It proposes a new registration based exemption from authorisation for certain investment funds, alongside expanded BMA powers of direction and wind up, and revised fees. As a draft for consultation, none of its provisions are yet in force.

• New exemption regime: A fund could register as a Section 8A Exempted Fund and skip the usual authorisation process (sections 11 to 14 of the Investment Funds Act) if it meets specified criteria, without BMA approval being required.
• Eligibility criteria: The fund must be open only to qualified participants or require a minimum investment of $100,000 per participant, must appoint an investment manager regulated by a competent authority in an equivalent jurisdiction, and must have its financial statements audited annually by a recognised auditor.
• Filing requirements: To register, a fund must file a statutory declaration, a registration form in the format directed by the BMA, and a copy of its offering memorandum; the fund is then exempt from authorisation once these are filed.
• Annual obligations: Exempted funds must make an annual filing (including audited financial statements and a certification that the fund still meets the exemption criteria and that its investment manager remains in good standing) and pay an annual fee.
• Expanded BMA powers: The BMA would gain power to issue directions (similar to existing section 30 directions) against exempted funds where directors, officers or service providers are no longer fit and proper, and expanded power under section 36 to petition to wind up a fund where it determines this is in the public interest.
• Fees: Registration and annual fees for Section 8A Exempted Funds would each be $1,500; other consequential fee changes are set out for existing exempted funds and fund administrators.
• AML/ATF applicability: Funds exempted under the new registration process would remain subject to anti-money laundering and anti-terrorist financing legislation.

The BMA had already consulted industry groups informally, so the public comment period on this draft Bill was shortened; comments were invited by 12 July 2013, only three days after the notice date.

Key obligations

• If enacted, an operator seeking Section 8A exemption must file a statutory declaration, a registration form, and a copy of the offering memorandum before relying on the exemption.
• If enacted, the operator must certify in writing to the BMA on or before 31 March each year that the fund continues to qualify for exemption, and must submit an annual filing and audited financial statements.
• If enacted, the operator must pay a registration fee on filing the declaration and registration form, and an annual fee of $1,500 by 31 March each subsequent year (no annual fee due in the year the filing fee is paid).
• Interested parties were asked to send comments on the draft Bill to policy@bma.bm by 12 July 2013.

Applies to

investment funds, fund operators, investment managers, fund administrators

Deadlines

• 12th July 2013: Deadline for industry and public comments on the draft Investment Funds Amendment Act 2013 Bill, sent to policy@bma.bm.
• on or before 31 March annually: Proposed deadline (once enacted) for a Section 8A Exempted Fund's operator to certify continued eligibility, submit its annual filing and audited financial statements, and pay the annual fee.

Related documents

• This document amends Bermuda Monetary Authority Act 1969
• This document amends Investment Funds Act 2006