2019 bill passed in HOA
NASSAU, BAHAMAS – The new Investment Funds Bill, which was passed in parliament on Wednesday, will introduce a “new chapter” in Bahamian Financial Services while attracting new opportunities to the jurisdictions and improving the ease of doing business.
Deputy Prime Minister and Minister of Finance, Peter Turnquest said the Bill would satisfy the “gaps” that left this jurisdiction non-compliant with four out of five principles of securities regulations with international standards.
“It proposes to open the industry in key ways that will allow Bahamians greater access to international service providers to enhance their operations and client offerings,” said Turnquest, who moved the bill in the House of Assembly yesterday.
“Simultaneously, it announces that Bahamian investment fund professionals and the industry are ready to compete internationally.
“It aims to ensure market access, both to the investment products of other jurisdictions, such as the European Union, but also of those jurisdictions to Bahamian markets.”
In the new Bill, to be licensed as an investment fund, entities have to fit the definition of an investment fund carrying on, or attempting to carry on business in or from The Bahamas.
This applies to any investment fund that is incorporated in this jurisdiction or offered for sale to non-accredited investors in The Bahamas.
“These new definitions mean that investment funds are eligible for licensing based on the activity they conduct or intend to conduct and who will be impacted by those activities, and not on whether or not certain service providers to the fund are located or licensed in The Bahamas,” Turnquest said.
“The new definitions provide the wealth management industry some new flexibility.”
The Bill also clarifies that non-Bahamas-based investment fund is to mean an investment fund that is incorporated, registered or established in a jurisdiction other than The Bahamas, but has a nexus to The Bahamas through it being administered or managed in or from The Bahamas.
A Bahamas-based fund is no longer required to appoint an investment fund administrator in the country to provide its principal office, under the new Investment Bill.
Another change from the 2003 Bill is that businesses structured as an international business company will not be licensed as investment fund administrators and will subject directors, officers and senior managers to fitness and propriety standards.
The investment fund administrator will also be required to appoint a compliance officer and must have two senior officers residing in The Bahamas to meet new physical presence requirements under the new Bill.
“All Bahamas-based investment funds must appoint an investment manager,” said the Minister, “except where the investors are the fund manager itself, the parent or subsidiary of the fund manager, or a feeder fund that invests one hundred per cent of its assets in a master fund.”
Turnquest said the bill’s strong compliance with best practices and international standards, comprehensive and inclusive development process, and forward-looking approach to market growth and development, promises that it is the right legislation to ensure this chapter is one in which the investment funds industry continues to flourish in The Bahamas.