‘Bermuda’s Candidacy Has Taken Step Forward’
Bermuda’s candidacy for a European “passport” to facilitate business for Bermuda-based fund managers has taken a step forward, the Bermuda Monetary Authority said.
“The European Securities and Markets Authority [ESMA] announced that Bermuda had met three of the five criteria it assessed in order to issue advice on the extension of Alternative Investment Fund Managers [AIFM] passports. Further review is needed on the remaining two assessment criteria for approval,” the BMA said.
“A year ago, the European Commission tasked ESMA with reviewing 22 jurisdictions considered to be contenders for passporting. So far, 12 jurisdictions, including Bermuda have been assessed, and the assessment process continues. ESMA will make recommendations to the Commission, which will make the final decision.
“ESMA says there are no significant obstacles impeding the issue of an AIFM passport to Bermuda in relation to standards on competition, market disruption and monitoring of system risk, but more time is needed to review enforcement and investor protection measures.”
Jeremy Cox, Chief Executive Officer of the Bermuda Monetary Authority said, “Efforts towards passporting for alternative investment fund managers effectively began four years ago with the signing of cooperation agreements with the majority of European Union [EU] Member States in relation to the AIFM Directive [AIFMD].
“These agreements constitute a pre-condition for non-EU AIFMs seeking access to EU markets or wanting to perform fund management activities on behalf of EU managers.”
By May 2013, ESMA had approved agreements between securities regulators from the 28 EU Member States, the European Economic Area and 34 of their global counterparts [including the Authority]. Since then, the Authority has developed a full AIFM regime which will come into force shortly.
Information on Bermuda’s AIFM regime – including legal requirements and instructions on applying for an AIFM licence – is posted on the Authority’s website.
Mr. Cox said, “The Authority commends ESMA on releasing their detailed report in such a timely fashion and looks forward to demonstrating the strengths of Bermuda’s AIFM regime – notably the recent legislative approval of the Investment Funds Amendment Act which gives the Authority additional enforcement powers.
“We remain fully committed to ESMA’s assessment process because it will benefit Bermuda-based investment managers with products and services for the European fund industry.”
This should be a huge embarrassment for the BMA. Other islands succeeded in showing they meet European standards; Bermuda failed. A A failed test is not a “step forward”.
Regulation of funds, banks, trusts, investment and corporate services in Bermuda are all far behind places like Cayman and Jersey. This is mainly because the BMA does not have enough expertise in any area except insurance. Without expertise, all that the BMA can do is copy what other countries have done, years too late.
The Government spends tens of millions on a low-revenue tourism industry but is fine with letting the funds, banking and trust industries whither. The opposition whips up nativist strikes and protests against reforms to attract foreign financial services experts from coming to Bermuda.