Being the sector that brings the most income, Bermuda's financial sector is well developed and with ...
Being the sector that brings the most income, Bermuda's financial sector is well developed and with an advanced infrastructure. The total number of Bermuda collective investment schemes increased by approximately 16% between 1999 and 2000, with corresponding net asset value growth of 36%. That rate of growth continues with the figures for the first quarter of 2001 showing a 15% increase over Q1 of 2000, with net asset value growth of 31%.
There have been two important regulatory/legislative changes made over the last year. The first is the amendment to the Companies Act to remove the requirement for non-Bermuda incorporated funds to obtain a permit from the Bermuda authorities where the fund administrator is Bermuda based. Going forward, Bermuda-based administrators will be able to administer non-Bermuda funds without the additional cost and delay of obtaining a permit for the fund.
The second important change was made to the Collective Investment Scheme Regulations. Under the old regulations institutional schemes had to raise $50m in their initial offer period. While the regulators were willing to waive this requirement, this led to uncertainty in the industry with potential clients. The institutional scheme is the most appropriate classification for hedge funds. The removal of this $50m minimum amount should make Bermuda a much more attractive jurisdiction for the incorporation of hedge funds.
The centre is also in the process of updating its protected cell legislation and its institutional fund structure in an attempt to bolster the fund management industry.
There will also be modifications to Segregated Account Company legislation, a fund structure introduced in 2000, which is very much like the Protected Cell Company in Guernsey on which it was largely modelled. Instead of having umbrella companies with share classes, this structure means fund sponsors can have a company with lots of cells without any cross liability. Previously it was aimed at insurance companies. Now they will tweak it to make it practical for funds to be set up using the structure. The legislation will be redesigned over the summer and be introduced in the autumn.
The Companies Amendment Act 2000 came into force on 11 August 2000. It amends provisions of the Companies Act 1981, the legislative foundation of international business in Bermuda. The act provides that local companies are not able to carry on business in Bermuda unless they are 60% owned by Bermudians, or have a license to conduct business. Such companies may conduct foreign business from a Bermuda base, but may not conduct domestic business. They are free from exchange controls and can hold assets in any currency except Bermudian dollars.
The act now recognises it valid to hold a general meeting with a sole shareholder and requires that exempted companies must satisfy certain Bermuda residency requirements including the requirement to appoint a resident representative.
Bermuda insurance companies form the world's third largest insurance market, after London and New York, and have been providing new solutions to international problems, including the introduction of Property Cat, D&O and Excess Liability in response to the world-wide crisis in excess liability capacity.
Bermuda is home to approximately 1,500 international insurers and is the world's largest captive insurance, reinsurance and financial line insurance market. The market continues to enjoy growth and foster innovation.
The chief administrative officer under the Insurance Act is the Registrar of Companies. As required by the act, the Minister of Finance has appointed an Insurance Advisory Committee which the Minister may consult before exercising his powers under the Act. The IAC comprises representatives of business, professional and Government regulatory agencies.
Under the Bermuda Government's policy, the Insurance Act requires certification by appropriate officers and professionals connected with each company as to its compliance with statutory standards.
Location: Bermuda consists of a chain of some 180 coral islands and islets lying 1046km (650 miles) off the coast of North Carolina, in the Atlantic Ocean
Regulatory contact: The Bermuda International Business Association (BIBA), Century House, 16 Par-La-Ville Road, Hamilton, HM 08, Bermuda
Tel: +441 292 0632
Fax: +441 292 1797
Email: [email protected]
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Total of 72 accredited firms
23% fall since Q1
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