Bermuda Authorised Fund

Introduction

The Bermuda Investment Funds Amendment Act 2019 sets forth the regulatory environment for operation of mutual funds in Bermuda. The Amendment Act brings within scope closed-ended investment funds and overseas investment funds. A person operating a closed-ended fund or an overseas investment fund prior to 1 January 2020 may continue to operate the fund without the fund being authorised, registered or designated under the Funds Act for a period of 6 months. Operators of funds should use the transition period to assess whether the changes to the Funds Act are applicable to them. Open-ended investment funds are currently required to be classified as one of the Authorised Funds or Registered Funds under the Funds Act. Authorised Funds include Institutional Fund; Administered Fund; Standard Fund; Specified Jurisdiction Fund.

Legal Requirements

Categories

Entity Requirements

The entity making the application is Bermuda:
a) Company
b) Limited partnerships,
c) Unit trust or

The license will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction

The license will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction.

Shareholder requirements

The license will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction.
• The investment dealer will need at least one shareholder.
• Corporate shareholding is allowed and 100% foreign ownership is permitted.

Compliance Officer

The License must establish and maintain an appropriate and effective compliance function within the firm which operates independently of all operational and business line functions and senior or supervisory management.

Licensed Principle

The Applicant must employ at least one individual who is licensed as a principal. The Principle must:
a) Have sufficient educational or other qualifications or experience;
b) Have sufficient authority within the company;
c) Be a fit and proper person, to supervise the business for which the company that has nominated him is licensed or is applying to be licensed

Fund Manager

The Applicant must employ a fund manager with no local requirement

Custodian

• The applicant must have a custodian approved by the BMA.
• A Custodian licensed and approved locally the minister.
• A Custodian licensed and approved under the laws of a recognized country or jurisdiction.
• A person with a written permission from the Minister to carry on Business as a Custodian.

Auditor

The License, within one month after becoming licensed, shall appoint an external auditor who is acceptable to theAuthority

Insurance

The applicant must have indemnity insurance coverage or a fidelity bond acceptable to the regulator

Minimum Capital Requirements

Ongoing Obligations

• Licenses are to be renewed annually after the date of registration. On application for renewal of a Licence, the Bermuda Monetary Authority , if satisfied that the applicant is a licensee of good standing, may grant the renewal on payment by the applicant of the annual renewal Licence fee
• Filing of Audited Accounts: The licensee shall for the financial year beginning on the day on which it commences to carry on securities business; and for each subsequent year submit to the authority, within ninety days after the end of the financial year, audited financial statements prepared in accordance with international accounting standards, and which contain such additional information as may be prescribed.
• The License must maintain appropriate policies of insurance for the purpose of indemnifying such licensee against any liability that may be incurred as a result of any act or omission by the licensee or any of its officers or employees in the conduct of the licensee’s securities business.