Notice - Investment Funds Amendment Act 2013

Summary

This is a Bermuda Monetary Authority (BMA) notice circulating a draft Bill, the Investment Funds Amendment Act 2013, for public comment. The Bill would substantially expand the BMA's enforcement powers over the investment funds sector by amending the Investment Funds Act 2006, mirroring similar enforcement powers already introduced for insurers, banks, deposit companies and trust businesses.

• New enforcement powers: The Bill would empower the Authority to impose civil penalties (up to $500,000 per contravention), issue prohibition orders banning individuals from certain positions, seek injunctions, and publish statements and decisions.
• Due process safeguards: Warning notices and decision notices would be required before directions, licence revocations, civil penalties or prohibition orders are imposed, with rights of representation and appeal to a tribunal.
• Expanded investigation powers: A new section 64A would widen the Authority's power to investigate suspected contraventions, fitness and propriety of individuals, and former licensed funds or administrators, including recovery of investigation costs from the person under investigation.
• Specific compliance duties carried over or introduced: Fund administrators would remain required to submit an annual statement of compliance within four months of financial year end, with a civil penalty (up to $5,000 per week in default) for late filing; operators of exempted funds face similar weekly penalties for late certificate filing or unpaid fees.
• Commencement: The amendments would come into force on a date (or dates, for different provisions) to be appointed by the Minister of Finance by notice in the Gazette.

As a consultation notice, the document itself does not yet impose binding obligations on funds or administrators; it invites industry feedback on the draft Bill and its Explanatory Memorandum before the amendments are finalised and brought into force.

Key obligations

• Interested parties must send comments on the proposed Bill to policy@bma.bm by May 30, 2013
• Once in force, a licensed fund administrator must submit to the Authority, within four months of the end of its financial year, a statement confirming compliance (or particulars of any breach) under section 47
• Once in force, an operator of an exempted fund that fails to file a required certificate or pay a prescribed fee on time becomes liable to weekly civil penalties under section 7
• Once in force, a person under investigation must produce documents, answer questions and pay the expenses of the investigation as required by the Authority under sections 64, 64A and 65

Applies to

investment funds, fund operators, licensed fund administrators, service providers to funds, individuals performing functions in relation to a regulated activity

Deadlines

• May 30, 2013: Deadline for submitting comments on the proposed Investment Funds Amendment Act 2013 Bill to policy@bma.bm
• within four months from the end of its financial year: Proposed deadline for a licensed fund administrator to submit its statement of compliance under amended section 47
• on a day appointed by the Minister of Finance by notice in the Gazette: Commencement of the Act (may differ for different provisions), per clause 22

Related documents

• This document amends Investment Funds Act 2006