Investment Funds (Definition) Order 2019

Summary

This Order, made under the Bermuda Investment Funds Act 2006, sets out specific categories of arrangements that are excluded from the statutory definition of an investment fund. It does not create new licensing or filing duties; instead it clarifies scope, meaning that entities structuring or operating an excluded arrangement fall outside the Investment Funds Act framework administered by the BMA.

• Business-related exclusions: Arrangements not operated by way of business, or entered into by participants carrying on non-investment commercial business for purposes related to that business.
• Group and holding structures: Arrangements where all participants are in the same corporate group as the operator, or that are holding entities under regulation 14 of the Economic Substance Regulations 2018.
• Single-asset or non-pooled property arrangements: Arrangements involving rights in only one asset, or property that is managed but not pooled property.
• Employee and family arrangements: Schemes limited to employees (or former employees and certain family members) of a group company relating to money or securities of a group member.
• Deposit-based arrangements: Arrangements where each participant's contribution is a deposit or sum paid by an institution, between commonly controlled companies, or by close relatives/directors.
• Shared-use, transferable securities, and clearing arrangements: Arrangements for shared enjoyment of an asset, arrangements where participants' interests are transferable securities, and clearing services operated by a recognized clearing house or exchange.
• Named excluded fund/entity types: Pension funds, sovereign wealth funds, securitization special purpose vehicles, joint ventures, debt issues, contracts of insurance, occupational pension schemes, credit unions licensed under the Credit Unions Act 2010, insurers registered under the Insurance Act 1978, and digital asset businesses licensed under the Digital Asset Business Act 2018.

Because these arrangements are carved out of the statutory definition, persons operating them are not required to seek authorisation or comply with the Investment Funds Act 2006 in respect of those specific arrangements. The Order came into operation on 1 January 2020.

Applies to

investment fund operators, credit unions, insurers, digital asset businesses, pension funds, securitization special purpose vehicles

Deadlines

• 1 January 2020: Commencement date of the Investment Funds (Definition) Order 2019.

Related documents

• This document commences Investment Funds Act 2006
• This document is made under Investment Funds Act 2006