Bermuda: New legislation to meet European standards for AIFMs

By added on 20/07/2015

A collaborative effort by Bermuda’s regulator and government, supported by industry stakeholders and the Bermuda Business Development Agency [BDA], has lined up new legislation to position the Island as a strong contender among jurisdictions vying to meet European standards set for alternative fund managers, reports Bernews.

“Newly drafted amendments to the Investment Business Act [IBA] reinforce Bermuda’s highly-respected regulatory reputation and place the domicile in a favourable situation to be considered for “third-country,” or non-European Union, passport rights under the Alternative Investment Fund Managers Directive [AIFMD],” the BDA said.

“It is anticipated that non-EU fund managers covered by the passport would generally be allowed to register in one EU member state and market their funds more freely in other states, subject to a regulatory regime that applies on an equivalent basis to EU managers.

“The move comes as the European Securities Market Authority [ESMA] is poised to make a decision July 22 on whether to open up the EU market; ESMA is expected to announce a list of jurisdictions that should be considered by the European Commission [EC] for extension of passport rights in the funds business. Bermuda, which is being considered among 44 domiciles worldwide, is home to almost 900 investment funds overseen by a highly-regarded independent regulator, the Bermuda Monetary Authority [BMA].”

“This is an important milestone for Bermuda’s funds industry and we applaud the inclusive public-private team approach that has been taken to ensure that our global reputation and regulatory environment support the AIFMD regime and that we are considered in the best possible light,” said BDA CEO Ross Webber. “

There are procedural unknowns at this point, and it may be a phased process, but we anticipate Bermuda will now be seen to have a sufficiently rigorous and well-resourced structure for fund managers located in our jurisdiction to operate in line with European rules and requirements.