Regulation, Operation, Compliance Conference
[Written by Kensley McDowall]
A well attended two day compliance conference entitled ‘Regulation, Operation & Compliance -Bermuda 2015′, ended on Friday, April 24 at the Fairmont Southampton.
This conference was put on by the US based Regulatory Compliance Association [RAC] with international and Bermuda based endowing organizational support, among them being the major Bermuda accounting and law firms and the Bermuda Development Agency [BDA].
Premier of Bermuda Michael Dunkley gave the opening key note address and spoke on the topic, ‘Bermuda – Creating the New Paradigm for Fund Managers,’ a very timely address.
Premier Dunkley’s full speech from conference the follows below:
Good morning,
On behalf of the Government of Bermuda, welcome to the 2015 Regulation, Operations and Compliance Symposium.
I’m a big believer in meetings like this because they reflect the value of sharing knowledge, building relationships and making connections – helping people work together more effectively.
The Symposium curriculum looks very interesting – focusing on the demands of a complex and changing world, dangers to avoid and opportunities to pursue.
It is safe to say that you will leave here more informed, more aware and more prepared to make decisions that work for clients, shareholders, regulators and you.
This symposium is also here in Bermuda because we are keen to attract new business to our shores, and I would ask you to think about possibilities while you are here.
As a commercial centre, we’ve done extraordinarily well in building an international economy that has provided our people with a quality of life that is rare in the world.
Our success is the work of generations of Bermudians who understood the benefits that would accrue to the Island with a strong and prosperous international business sector.
They exercised foresight, innovation, collaboration and patience to make it happen. It is a legacy Bermudians proudly carry forward.
Today Bermuda is a premier jurisdiction for insurance and reinsurance, and the major centre for Insurance-Linked Securities.
We achieved this leadership position by keeping a close eye on industry developments, and by making sure our industry partners get the support they need to continue succeeding. Close coordination between the government and the private sector, sensible risk-based regulation and a well-trained work force with industry-specific skills and knowledge underpins this success.
As a Bermudian, I am proud of what we have achieved, proud that we’ve created a platform that enables companies to provide important services to people, businesses and countries worldwide.
As Premier of Bermuda, I am also mindful that our achievement is not a given, that we must keep providing an environment that works for business.
This symposium is part of that continuing effort.
We are very interested, for example, in growing our fund and asset management business – a business sector, some of you may recall, that Bermuda excelled in during the late 80s and early 90s.
Two developments underscore our commitment to making that happen.
The first began in the summer of 2013 when Bermuda initiated a major overhaul of its asset management legislation. The aim was to develop a more expeditious registration and efficient regulatory environment for Private Fund Managers. We worked closely with the private sector and regulators, with the BDA hosting an Asset Management Summit in which US-based hedge fund lawyers and prime brokers gave us their suggestions and feedback.
By the fall of 2013, Bermuda passed an amendment to the Investment Funds Act creating two new exempt fund classes that can be registered and launched on a fast-track basis.
One New York-based fund manager, who was part of the process, said his advice to clients today is that Bermuda “may be the best jurisdiction for offshore funds” considering its cost benefits, practical regulations and access to officials.
Many of the firms that participated in this overhaul of regulations are represented in the audience today. On behalf of Bermuda, thank you for your continuing support.
The second development is a bold, new initiative that will again set Bermuda apart as an innovator and leader.
I am proud to announce today that Bermuda has taken a revolutionary step by creating an Advanced Workforce Training Programme for compliance, legal and operation staff within Alternative Investment and Asset Management firms.
This programme, which stands as one more example of collaboration between the government, private sector and the regulator, is the first of its kind in any offshore jurisdiction.
Bermuda partnered with the Regulatory Compliance Association and through the RCA’s generosity received 150 scholarships to its Law and Masters Concentration in Asset Management Practice, Compliance and Regulation.
The scholarships have become the basis for retraining Bermudians to deliver unmatched compliance, legal and operation services to Fund Managers.
The Advanced Work Force Training Programme delivers an unequalled value proposition for Fund Managers by:
1. Lowering the cost structure to deliver Fund Administration and Outsourcing services
2. Implementing industry-recognized standards for compliance, legal and operations staff
3. Creating alumni camaraderie between RCA students in the US, UK and Bermuda, and
4. Assisting the Bermuda Monetary Authority in providing the most efficient regulatory environment possible.
Over the next 12 months the Chairman of the Advanced Workforce Training initiative, George Thomas, in close collaboration with the RCA, will engage in an awareness campaign in the US and UK to educate Fund Managers about Bermuda’s commitment to excellence in Alternative Asset Management.
Here in Bermuda Government has assembled a local curriculum committee to work with the RCA, composed of representatives from asset management, funds services, legal compliance and our regulator. Several members of that committee, including the Chairman George Thomas, are here today… Would you all please stand in order for the audience to see you.
I want to take this opportunity to personally express my gratitude to George, a New York-based Bermudian who continues to do all he can to fly the flag for his Island home. Thank you George.
The pilot session of the Advanced Workforce Training Initiative was launched earlier this week and over 20 Bermudians with varying educational backgrounds and professional experience have agreed to participate, including 7 students from Bermuda College.
Please take the time to speak with these individuals to learn more about this exciting programme.
If you wish to schedule time to learn more please speak with a member of the RCA staff at the registration desk. Ladies and gentlemen, we are very excited about the Workforce Training Programme because it demonstrates our commitment to meeting the needs of business while providing Bermudians with career opportunities to get ahead.
There is a synergy in this – synergy between you and us that works to our mutual benefit.
What we have created here in Bermuda is a situation where your success becomes our success.
Part of our mission as a government is to ensure that that beneficial relationship flourishes because of what it creates for our people.
And so our task is to continue to listen closely to what you have to say about your needs, your challenges and your opportunities.
We are here to work with you, to make sure you have the support and the stability you need to succeed.
I see this as a working partnership – a partnership for mutual growth and prosperity, and I look forward to it progressing from strength to strength.
The Symposium will end tomorrow, but the doors of this government remain open to hear your concerns, your needs and your ideas.
In closing, I want to say that Bermuda is proud to be hosting the 2015 Symposium.
I wish you the best in your discussions and urge you to take some time to get out and see the Island. It is a beautiful and unique place – friendly and cordial, great golf courses, fantastic beaches and a rich history that you can see around every corner.
For those of us fortunate enough to live here, we count our blessings each and every day.
Thank you for your time.
-
As the title suggests, the conference was not only aimed at Compliance Officers but at Fund Administrators and Fund Managers as well.
There was a battery of heavy weight instructors, among them, speakers from the RCA, the US Securities and Exchange Commission [SEC] the agency of the US Federal Government which holds primary responsibility for enforcing federal securities laws, the BIG Four Accounting Firms, the major Bermuda Law Firms, and the Chief Compliance Officers [CCO] and General Counsel of numerous Asset Management and Investment companies.
In the most popular session, Personal Liability for Legal Counsel, Compliance Officers and Portfolio Managers, attendees were warned about cutting corners.
CCOs were advised to do their job, be familiar with the applicable rules, know their Code of Ethics and Compliance Manual, document Annual Compliance Reviews and report to Senior Management, report all serious violations to Senior Management, ensure that the appropriate actions are taken to correct existing violations and to prevent further violations, not to ignore “Red Flags”, and where appropriate, seek advice from outside legal counsel.
Additionally, General Counsels were warned about the danger of wearing two hats, that of General Counsel and CCO. It not only leads to conflict of interest between the GC’s duty to maintain confidentiality and the CCO’s duty to disclose to the Regulatory Authority. Christian Luthi, Director of Dispute Resolution at Conyers Dill & Pearman, advised on liability of Company Directors and Fund Managers under the Bermuda Companies Act 1981.
Other topics of the conference included Fund Governance, Emerging Legal and Regulatory Challenges and Opportunities for Offshore Jurisdictions, Upgrading Practices, Controls and Testing for Fund Operations and Administration, Upgrading Compliance Processes, Controls, Reviews and Remediation, Due Diligence and Review of Administrators and Outsourcing Arrangements, Developing Forensic Testing and Compliance Analytics – a comprehensive Case Study.
On the second day of the conference Sir Russell Coutts, five time America’s Cup Champion , gave a key note address entitled, “Harness Your Team’s Winning Spirit”. An interesting Round Table discussion entitled “Navigating the New Landscape” was hosted by the SEC and the US Commodity Futures Trading Commission [CFTC].
The topics of Successfully Managing the Impact of Investigation and Enforcement Actions and Emerging Issues, Areas of Concern in Due Diligence and Ethics were discussed. The conference ended with a Bermuda Style Luncheon and allowed lots of time for networking and for visiting attendees and speakers to explore the island.
With Fund Management being an area that Bermuda has not fully and or aggressively exploited, the conference and the Premier’s key note address were timely as Bermuda looks to restructure and grow its ailing economy.
- Kensley McDowall is a Bermudian Attorney and Compliance Specialist, MD and Consultant of Caribbean Compliance Consultants [Bermuda]. For more information, email kamcdowall@gmail.com or visit online.
Following are just a few of the many relevant points brought to the forefront by Premier Michael H Dunkley:
“This symposium is also here in Bermuda because we are keen to attract new business to our shores, and I would ask you to think about possibilities while you are here. As a commercial center, we’ve done extraordinarily well in building an international economy that has provided our people with a quality of life that is rare in the world.
Our success is the work of generations of Bermudians who understood the benefits that would accrue to the Island with a strong and prosperous international business sector.
They exercised foresight, innovation, collaboration and patience to make it happen. It is a legacy Bermudians proudly carry forward.”
(Need more be said? I believe not…)