Investment fund legislation tabled in the House of Assembly yesterday is being heralded as a “game-changer” by the Securities Commission of The Bahamas (SCB) as it brings 2003 legislation in line with international standards established by the European Union (EU) under the Alternative Investment Fund Managers Directive (AIFMD), a press release sent from the SCB said yesterday.
The more than 100-page Investment Funds Bill 2019 was tabled in the House of Assembly yesterday by Acting Prime Minister and Minister of Finance Peter Turnquest.
According to the release, the new bill introduces licensing requirements for fund managers and regulatory oversight for custodians; introduces triggers for the licensing of investment funds; includes the definitions of Bahamas versus non-Bahamas based funds, which ensures compliance with the EU’s substance requirements; introduces provisions to allow international administrators without requiring them to hold a license in The Bahamas; and establishes a regulatory regime compliant with the EU under the AIFMD.
SCB Chairman Robert Lotmore said in the release that the new legislation now aligns The Bahamas’ laws with international standards and best practices.
“The new legislation closes deficiencies identified in the previous framework, which fell short of the international standard in four of five areas, based on the International Monetary Fund’s 2012 evaluation of the jurisdiction under its Financial Sector Assessment Programme,” Lotmore said.
“The commission leveraged this opportunity to truly modernize the legislative framework—increasing provisions to protect investors and the markets, and making the jurisdiction more competitive simultaneously.”
SCB’s Executive Director Christina Rolle said it took many consultations and industry briefings to get the legislation to this point.
“The tabling of this new legislation marks the culmination of more than two years of benchmarking, drafting, consultation and redrafting, so we are now looking forward to its passage and enactment in order to focus on implementation,” she said.
“With its new provisions and potential to increase investor protection, we believe this legislation will provide opportunities for growth in the investment funds industry in The Bahamas.”
The release explained that in meeting the AIFMD standard, The Bahamas can “qualify for an EU Passport, which would enable Bahamian investment funds to be offered in EU member countries, by EU investment fund managers”, while the reverse would also be true, allowing “EU or Bahamian investment fund managers to conduct fund management business in the EU and with EU based funds”.
The commission said it has 749 licensed investment funds and 62 licensed investment fund operators in The Bahamas.
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