The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Reforms to the Investment Funds Act will ensure improved investor protection and attract more business to The Bahamas, the deputy prime minister said yesterday.

K Peter Turnquest told Parliament that the changes, tabled in Parliament yesterday, were still being prepared by the Securities Commission when the initial Act was passed into law last year.

He explained that the latest reforms were necessary to meet evolving European Union (EU) standards, and ensure Bahamas-domiciled funds and their managers could maintain access to investors and investments in the 28-nation bloc’s markets.

“Upon review of the investment Funds Act 2019 to address the issue of substance being raised specifically in relation to the investment funds industry, the commission identified two further areas that needed to be addressed, which were the standards being proposed by the EU,” Mr Turnquest said.

“These amendments are prompted by the need to provide minor clarifications, and to correct and close any existing or perceived legislative gaps, and to clarify the law where there is ambiguity or uncertainty with regards to the Act.”

Mr Turnquest added that the proposed amendments “introduce new definitions and amendments to current definitions, clarify the requirements for a fund to appoint an investment fund manager, licensed or registered by the commission; clarify the obligations of an investment fund administrator; provide a valuation regime for standard investment funds; clarify the categories of persons eligible to be appointed as custodians for an investment fund; address the stamp duty exemptions for investment funds; and provide for the approval of an external AIFM (alternative investment fund management) custodian by the commission.”

The deputy prime minister continued: “Of the proposed amendments, two are substantive changes, being the creation of valuation and custodian regimes for standard funds. The need to introduce these systems became apparent when the Securities Commission was asked to provide the European Union with a summary of its supervisory regime for investment funds specifically.

“It was brought to the commission’s attention that certain standards for substance requirements were being contemplated for investment funds by the European Union. These standards include having regimes for annual audits, ongoing reporting obligations as well as having oversight regimes for valuation funds offered to retail investors as well as oversight for custodians appointed to hold the assets of an investment fund.”

Mr Turnquest said the Securities Commission was able to confirm that the 2019 Act had contemplated all the required standards save for the requirements related to valuation and custodians.