Stakeholder Letter - Proposed Enhancements to Supervisory Powers within the Investment Funds Act 2006 (2023-06-30)

Summary

This is a stakeholder letter from the Bermuda Monetary Authority (BMA) responding to industry feedback on its earlier consultation paper proposing enhanced supervisory powers under the Investment Funds Act 2006. It sets out how the BMA has revised its proposed late fees and penalty provisions in response to comments, and confirms next steps toward finalising amendments to the Act and related Rules.

• Late filing fees (sections 5B(4A), 6(4A), 26(6)): Revised to a single flat late fee of $1,000, rather than an accumulating monthly fee.
• Offering document changes (section 6(3E)(c)): BMA agreed to limit the obligation to filing an offering document reflecting all material changes.
• Material change notifications (section 25): Late fee for failing to notify the Authority of material changes revised to $500 (from the higher amount stakeholders objected to).
• Transition period: BMA declined to introduce a transition period, stating amendments will take effect as soon as passed since they only add penalties for existing requirements, not new substantive obligations.
• Audited statements (Rule 13(3), Rule 14(4)): Late filing fee for audited financial statements revised to a flat fee of $1,000.
• Nature of penalties: BMA will expand its existing power under section 17(8) to impose late fees for filing, certification and notification breaches, distinguishing these from existing civil penalty provisions.
• NAV late filing: A new section 37(2A) and amendment to Rule 7 of the Investment Fund Rules will introduce a late fee for late filing of a fund's Net Asset Value, replacing the erroneous reference to section 26(1)(b) (corrected to relate to 26(1)(a)).
• Late audits and offering document delays: Late fees for late audits (via new section 37(2A) and amendments to Rules 13(3), 14(4), 14(5)) and for delayed publication of offering documents reflecting material changes (via new section 38(9) and amendment to Rule 5(1A) of the Offering Document Rules) will be incorporated directly into the Act rather than solely the Rules.

The BMA states it will now finalise the wording of the amendments to the Investment Funds Act 2006 and associated Rules based on this feedback, with no fixed transition period once the amendments are passed by the Legislature. Stakeholders seeking further clarification are directed to contact the Authority at policy@bma.bm.

Applies to

operators of investment funds, authorised and registered mutual funds, fund administrators and service providers regulated under the Investment Funds Act 2006