The asset management landscape in Bermuda
First published in Canadian Hedgewatch September 2017
With a continuing commitment to excellence, through turbulent economic times, the asset management landscape in Bermuda has been evolving with an unrelenting focus on servicing the needs of a diverse and demanding global clientele. In a world of increasing international pressure for heightened regulatory oversight, Bermuda has been well placed and ahead of the game, having consistently maintained the highest of standards, and continues to adapt, applying a risk based approach to regulation. In an environment where one size definitely does not fit all, products aretailored and government works closely in tandem with the regulator and the financial services sector to ensure the requirements of industry are met.
Funds in Bermuda have traditionally been structured as companies, partnerships or unit trustswith the choice of vehicle being driven primarily by investor familiarity and the flexibility offered instructuring. Recent legislative developments have both created new products and amended the rules applicable to existing products to provide increased flexibility.
In 2013 industry stakeholders were asked what was needed for Bermuda to better serve the funds industry. The answers led to substantive amendments to the Investment Funds Act 2006 (IFA), the legislation governing the exclusion, exemption and authorisation of investment funds. These amendments to the legislation saw the creation of more streamlined fund products in the form of two new exempted fund classes, the Class A exempt and the Class B exempt fund offering previously unprecedented speed to market, with lighter touch regulation. The IFA also provides forthe registration of various classes of authorised fund under the IFA having greater oversight fromthe Bermuda Monetary Authority (BMA), Bermuda’s financial regulator. It should be noted that allfunds are required to register under our Anti-Money Laundering (AML) regulations.
More recently, client demand for limited liability companies (LLCs) has led to the introduction of theLimited Liability Companies Act 2016 (LLC Act) which has been effective since October 2016. The LLC Act introduced into Bermuda the first completely new structure in approximately 100 years with our LLC Act being modelled substantively on the equivalent Delaware legislation.