As the Investment Funds bill is debated in the Bahamian parliament, CEO and Executive Director of the Bahamas Financial Services Board Wendy Warren believes the new regulatory environment will offer stronger protection whilst giving the fund industry greater flexibility.
"The impetus for the bill derived from the need of the regulators to better supervise the investment funds industry and eliminate the provisions of exempt funds," explained Warren in a recent statement issued by the BFSB. She continued:
"With a commitment to the long-term sustainability of the sector, the Bahamas Funds Association proposed a mechanism that met the requirements of the Securities Commission whilst expanding on the product options available in The Bahamas."
"After refinement by the Securities Commission and in dialogue with the private sector, the SMART (Specific Mandate Alternate Regulatory Test) Fund is set to be brought into law with the passage of this bill," noted Mrs Warren, adding:
"The securities industry is one of the most innovative sectors of the economy. As clients develop new products, they have the ability to submit through an entity licensed by the Securities Commission proposals to establish entities with a specific mandate. After consideration of risk ﾖ including the degree of sophistication of investors, the number of participants and the provision of service by a recognised licensed service provider ﾖ the Securities Commission may declare the mandate suitable for the alternative regulatory regime."
The Chairman and CEO detailed how the new law will work in practical terms.
"As each specific mandate is approved, the Model of SMART fund setting the regulatory requirements for the specific mandate will be made available to the industry. The wider community is then able to make use of this Model for any number of clients. One Model that will likely be well received by the market is the common practice of pooling funds for administrative efficiency where a private bank has received a discretionary investment mandate from its clients."
by Carla Johnson, Invstors Offshore.com
