The Tribune

The Bahamian financial services industry and regulators have moved to understand the potential impact on this nation’s investment fund sector from recent European Union (EU) initiatives.

The EU’s Alternative Investment Fund Managers Directive (AIFMD) entered into force on 22 July, 2013.

It introduces “European authorisation and conduct of business” requirements, and covers those responsible for the portfolio or risk management of all types of alternative investment funds (AIFs) - hedge funds and private equity funds. AIFMD also introduces a harmonised regime for the promotion of such funds to professional investors.

The Bahamas Financial Services Board (BFSB) has partnered with the Ministry of Financial Services, the Securities Commission (SCB) and corporate sponsor, Ernst & Young, to promote a better understanding of the EU initiative.

Ernst & Young’s New York-based executive director, John Sampson, gave an overview of the Directive, including key questions and areas of concern; the opportunities and challenges; AIFMD in different EU countries; and generally focussing on the implementation and regulatory reporting.

The Securities Commisison’s legal counsel, Mechelle Martinborough, gave a presentation on the likely impact on the Bahamas, with a focus on implementing AIFMD through co-operation.

This included an overview of the scope of co-operation, cross-border onsite visits, requests for assistance and cooperation on enforcement, etc.

Ms Martinborough also gave a comparative analysis of the provisions of the EU/EEA Memorandums of Understanding and the one used by IOSCO, the global securities industry regulatory body.

In July last year, the Securities Commission signed Memoranda of Understanding (MoUs) with counterpart securities regulators in the European Union and the European Economic Area (EEA) that effectively allowed Bahamas-based fund managers to continue to market their product or perform fund management activities in Europes on an interim basis.