One of the most significant and immediate implications for financial service professionals locally is the requirement to license existing Exempt funds, as these funds are no longer recognised under the new legislation.
Existing Exempt Funds have three months to appoint a Fund Administrator licensed by the Securities Commission of the Bahamas (a list of whom may be found on the Securities Commission’s website) and a total of nine months to reorganise the Fund under the 2003 Act.
The options are to:
* Apply for a license as a SMART Fund as defined within the Regulations.
Currently, the Securities Commission recognises four classes of SMART Fund, which are defined by means of SMART Fund Rules published by the Commission. One of these Rules (SMART Fund No 3) has been designed to provide a simple conversion mechanism for existing Exempt Funds. The Securities Commission and an Unrestricted Fund Administrator have the authority to license each of these classes of Fund.
* Apply for a license as a Professional Fund as defined within the Regulations.
In this case the Administrator and / or a local Attorney should sign off on the necessary documentation. The Securities Commission and an Unrestricted Fund Administrator have the authority to license this Fund.
* Apply for a license as a Standard Fund as defined within the Regulations.
In this case the Administrator together with a local Attorney should sign off on the necessary documentation and submit such to the Securities Commission for licensing. Standard Funds can be licensed only by the Securities Commission.
* Cease operations in The Bahamas within the defined time period.
Practitioners with portfolio of Exempt Funds should review the relevant legislation and approach a licensed Fund Administrator, legal counsel or the Securities Commission to instigate the process of licensing these funds.
BFSB’s CEO & Executive Director Wendy Warren says, “The SMART Fund class designed for the smooth transition of the previously exempt fund is one of the many features proposed during industry discussions with the Securities Commission on the development of the Investment Funds Bill. This ongoing dialogue with the SCB will continue with a meeting on Thursday to identify all matters associated with the transition from the Mutual Funds Act 1995 to the implementation of the Investment Funds Act 2003.”
