The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Securities Commission yesterday said it expects “substantial and substantive” legislation governing Bahamas-domiciled investment funds, with the initial draft set for completion in the next several weeks.

Mechelle Martinborough, the Comnmission’s legal counsel, told Tribune Business: “We currently have a first draft that we hope to be finished with in another month or so, and we will put it out to the industry for their consultation.

“It is quite an extensive piece of legislation. One of our main goals is to make some adjustments that could really impact the development of the industry.

“We want to ensure that we have the industry involved in that process in all stages and all levels, and so far I think it’s been a very positive experience. We are going to be making some real substantial and substantive changes which we think will be good for all stakeholders at the end of the day.”

Ms Martinborough said of the proposed amendments: “One of the biggest changes is with regards to the licensing regime around the funds. We are looking at changing the trigger for the licensing of funds, which is the appointment of an administrator.

“Currently, the law requires that if you want to have a fund domiciled in the Bahamas you have to appoint a Bahamian administrator. We are taking that requirement out of the legislation so now funds can appoint an administrator they want. That will liberalise the investment funds sector to some extent. It’s a big change, and something the industry has been talking about and looking for for a while.”

She continued: “The next big change is with regards to administrators. We have some rules around how they qualify to be licensed. We are taking away one category of licensing there.

“That would be the category of the exempt administrator. We will have them move into the category of restricted administrator. We are going to try and do that without causing them any extra cost in terms of obligations and duty.”

Ms Martinborough said the revised Act will also contain provisions that allow industry participants to qualify for the Alternative Investment Fund Manager Directive (AIFMD).

“It will enable them to qualify to do business with and for European entities, and also to get into the European market to manage European funds, and so there are provisions in the legislation to deal with that,” she added.

The Securities Commission launched the Investment Funds Act 2003’s overhaul last July, in a bid to strengthen regulation of the sector and improve competitiveness.