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New Bermuda funds legislation: creation of 'registration only' class of investment funds

Bermuda’s Investment Funds Act 2006, the legislation that provides the regulatory framework for the creation and operation of investment funds in Bermuda, has been amended pursuant to the provisions of the Investment Funds Amendment Act 2013. The amendment is designed to enhance Bermuda’s offering of investment fund products and is aimed at further attracting Bermuda’s core fund constituents: sophisticated investors and their advisers. The amendment is further evidence of the strong collaborative process that exists between the government of Bermuda, the Bermuda Monetary Authority or BMA (the independent regulator of the investment industry in Bermuda) and the funds industry, both in Bermuda and internationally.

Qualified new and existing investment funds organised in Bermuda now have the option to register with the BMA in one of two new exempted fund categories: (i) Class A Exempt Funds; or (ii) Class B Exempt Funds. These new exempted funds will be exempted from the requirement to be authorised pursuant to the provisions of the act, with the result that they will be deemed to be registered as qualified funds, but not regulated, by the BMA. Both options will offer operators of Bermuda-incorporated funds swift access to market and regulatory certainty as Class A Exempt Funds require no regulatory approvals to launch and commence operations and Class B Exempt Funds require only minimal regulatory involvement…

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