NOTICE - Grandfathering of Class A/Class B Exempt Funds (2016-09-23)

Summary

This BMA notice announces an extension of the grandfathering period that allows certain older Bermuda exempt investment funds to reclassify under the newer Class A or Class B Exempted Fund categories created by the Investment Funds Amendment Act 2013. Following passage of the Investment Funds Amendment Act 2016, the reclassification deadline has been pushed from the third anniversary to the fourth anniversary of the 2013 Amendment Act's implementation, i.e. to October 2017.

• Background: The 2013 Amendment Act created Class A Exempted Funds and Class B Exempted Funds and repealed the prior Section 7 exemption provisions of the Investment Funds Act 2006.
• Grandfathering: Funds previously exempt under the repealed Section 7 provisions were grandfathered for three years from the 2013 Amendment Act's implementation, originally requiring reclassification by around October 2016.
• Extension: The Investment Funds Amendment Act 2016 extends this deadline to the fourth anniversary of the 2013 Amendment Act's implementation, now October 2017.
• Consequence of non compliance: Grandfathered funds that fail to reclassify as Class A or Class B Funds by the new deadline will lose their exempted status and fall out of compliance with the Investment Funds Act.

Key obligations

• Grandfathered Bermuda exempt funds must reclassify as either a Class A Exempted Fund or a Class B Exempted Fund by the fourth anniversary of the implementation of the 2013 Amendment Act (October 2017).
• Failure to reclassify by the deadline results in loss of exempted status and non-compliance with the Investment Funds Act 2006, as amended.

Applies to

Bermuda exempt funds, grandfathered funds, Class A Exempted Funds, Class B Exempted Funds, investment funds

Deadlines

• October 2017: New deadline (fourth anniversary of the 2013 Amendment Act's implementation) for grandfathered exempt funds to reclassify as Class A or Class B Exempted Funds.