Bermuda’s AIFMD-ready regime in process of application

Bermuda’s regulator is in the process of implementing changes to the country’s financial regime which are designed to bring it in line with that of Europe, and facilitate its application for an Alternative Investment Fund Manager Directive passport, a spokesperson for the authority told pfm.

The Investment Funds Amendments Act, which was approved by the Bermudian government in June, is expected to enter into force “in due course”, the Bermuda Monetary Authority spokesperson said.

“The Bermuda Monetary Authority continues to press forward with implementation of the AIFM regime in Bermuda. All the legislative instruments have been adopted by the Government of Bermuda and the focus of the Authority’s work is now in relation to entry into force of this regime,” she said.

The changes were made to allow funds based in Bermuda to be marketed to professional investors across the EU via the AIFMD passporting scheme.

In its review of Bermuda’s application for a passport, delivered to the European Commission in July, the European regulator ESMA said the country had met three of the five criteria it assessed in order to issue advice on whether or not a passport should be extended to the country.

ESMA was not able to say when, or if, the country would be reassessed following the regime change, which addresses the two outstanding issues. But the Bermudian regulator said it continues to engage with its European peer.

“Overall, our discussions with ESMA are positive, and we reiterate our commitment to this project and to European Authorities that the Authority is a trusted partner with respect to passporting under the AIFM regime,” the Bermudian regulator said.

Bermuda was one of 12 non-EU countries whose application for an AIFMD passport was assessed by ESMA earlier in the year. The European regulator said it was unable to deliver advice on whether it or the Cayman Islands should be given a passport before regulatory reform in both territories was introduced.

The final decision on whether to grant the territory a passport will be taken by the European legislature, which includes the commission, council and parliament. This must be done within three months of receiving advice on the matter from ESMA, under the rules set out by the AIFMD.