The Investment Funds Amendment Bill, 2020 was passed yesterday in the House of Assembly, allowing for 24 new provisions of the principal act, which came into force in September last year.
The original act – the Investments Funds Act, 2019 – was introduced to modernize the investment funds industry in The Bahamas by overhauling its legal and regulatory framework, to make it compliant with international standards and best practices.
“The proposed amendments strengthen the act by clarifying the scope of approval and activity of investment fund manager, investment funds administrator, the custodian and the auditors. The amendments also expand the provisions for sharing information with other regulators and adjusts the transitional period for the Investment Funds Act, 2019 to facilitate the adjustments being proposed in the amendment bill itself,” Minister of Financial Services, Trade and Industry and Immigration Elsworth Johnson said yesterday while leading debate on the amendments in the House of Assembly.
“Importantly the bill also addresses concerns which may be hampering the European Union’s full endorsement of the Bahamas investment fund’s regulatory regime, particularly in regard to how the determination of a professional investor is made.”
Parliament passed the Investment Funds Bill, 2019 last March to address deficiencies in the country’s investment fund legislation related to insufficient obligations regarding conduct in the valuation, pricing and redemption of underlying securities; and to ensure that managers/advisers of hedge funds were not subject to appropriate oversight.
When The Bahamas underwent a peer review under the International Monetary Fund’s (IMF) Financial Sector Assessment Program in 2012, the country’s investment fund legislation failed four of the IMF’s five principles, leading government to update the laws to bring it in line with international standards established by the European Union (EU) under the Alternative Investment Fund Managers Directive.