Investment Fund Offering Document Rules 2019 (BR 134 / 2019)

Summary

These Rules set out mandatory requirements for the offering documents that Bermuda investment funds must prepare, have approved by the Bermuda Monetary Authority, and make available to investors. They replace the Fund Prospectus Rules 2007 and apply to all investment funds authorised or registered under the Investment Funds Act 2006.

• Approval before use: An offering document must comply with these Rules and be submitted to and approved by the Authority before it is used to offer units to participants or potential participants.
• Submission on application: Operators must submit the proposed offering document when applying for authorisation or registration, and for segregated accounts companies or unit trust funds operating segregated accounts, a separate offering document or supplement for each segregated account.
• Publication and availability: Operators must publish the offering document or otherwise make it available to participants and potential participants, and must forthwith publish any updated offering document reflecting material changes; failure to do so triggers a late fee under the Fourth Schedule to the Bermuda Monetary Authority Act 1969.
• Free access in Bermuda: Copies must be made available to participants without charge at the fund's registered or principal office in Bermuda or at the Bermuda office of at least one service provider.
• Prescribed contents: The offering document must contain an extensive list of prescribed disclosures, including fund identification, regulatory status, service provider details, investment objectives and risks, capital and unit rights, issue/redemption procedures, valuation basis, conflicts of interest, financial year end, custodian details, and (for closed ended Professional Closed Funds or Private Funds) the designate responsible for segregation and safekeeping.
• Mandatory disclaimer: The document must include a specified disclaimer statement about the limits of BMA authorisation or registration, worded differently depending on whether the fund is authorised or registered.
• Additional material information: Operators must also include any other material information within their knowledge or reasonably obtainable that investors would reasonably need to make an informed investment decision.

The Rules took effect on 1 January 2020 and were subsequently amended by BR 83/2023, which inserted the updated offering document publication duty and late fee provision, effective 29 September 2023.

Key obligations

• Every investment fund must prepare an offering document complying with these Rules and have it approved by the Authority before use in offering units.
• Operators must submit a copy of the proposed offering document to the Authority upon application for authorisation or registration, including a separate document or supplement for each segregated account where applicable.
• Operators must publish or otherwise make the offering document available to participants and potential participants.
• Operators must forthwith publish or make available an updated offering document whenever material changes are made, or become liable to a late fee under the Fourth Schedule to the Bermuda Monetary Authority Act 1969.
• The offering document or updated offering document must be made available to participants free of charge at the fund's Bermuda registered/principal office or at the Bermuda office of a service provider.
• The offering document must contain all contents prescribed in Rule 6, including fund details, regulatory status, service providers, investment objectives and risks, capital structure, unit rights, issue and redemption procedures, valuation basis, financial reporting, custodian particulars, and segregation/safekeeping designate for Professional Closed Funds or Private Funds that are closed ended.
• The offering document must include the prescribed disclaimer statement regarding BMA authorisation or registration.
• Operators must include any other material information reasonably required by investors to make an informed investment judgment.

Applies to

investment funds authorised or registered under the Investment Funds Act 2006, operators of investment funds, company funds registered as segregated accounts companies, unit trust funds operating segregated accounts, Professional Closed Funds, Private Funds

Deadlines

• 1 January 2020: Commencement date of the Investment Fund Offering Document Rules 2019.
• 29 September 2023: Effective date of amendments (BR 83/2023) inserting the updated offering document publication duty and late fee provision, and amending paragraph (2) of Rule 5.

Related documents

• This document is made under Investment Funds Act 2006