An overhaul of the Investment Funds industry brings changes to its outdated regulatory framework; which if left untouched, poses a risk to the country’s reputation as a leading financial services sector.
Moving for Investment Fund Bill 2019 in the House of Assembly yesterday, Deputy Prime Minister and Minister of Finance Peter Turnquest said the more fundamental changes include rewriting what an Investment Fund is for the purposes of licensing and regulation and what it means to carry on these businesses in and from The Bahamas.
“This bold piece of legislation seeks to fill those regulatory gaps with a framework of rationalized definitions of fundamental terms and the realignment of fundamentals through critical functions and responsibilities.
“The proposal is to open the industry in key ways that will allow Bahamians greater access to international service providers to enhance their operations and client offerings.
“Simultaneously, it announces that Bahamian Investment Fund professionals and the industry are ready to compete internationally,” the Minister said.
If passed, it is also expected to improve the ease of doing business within the sector, setting the foundation to attract new business.
“The Investment Fund Bill 2019 represents the introduction of a new chapter in Bahamian financial services.”
“Its strong compliance with best practices at international standards, comprehensive in inclusive development process and forward looking approach to market the growth and development promise that it is the right legislation to ensure this chapter is one in which the investment fund industry continues to flourish in The Bahamas. “
As of December 31, 2018, there were 749 licensed Investment Funds and 72 licensed investment fund administrators in The Bahamas.
Opposition Deputy Leader Chester Cooper in his contribution to the debate said that the push to broaden the scope of Investment Funds in The Bahamas bodes well for the industry and opens up the market on an international level through a much-needed modernization, to international best practice.
He added that the legislation seeks to modernize the country’s investment fund product offering, readying us to compete more effectively with Cayman Islands, for example.
“The bill will allow compliance with EU requirements, thus giving The Bahamas the ability to qualify for an EU Passport, which would enable Bahamian Investment Funds to be offered in EU member countries, by EU investment fund managers, while also allowing EU or Bahamian investment fund managers to conduct fund management business in the EU and with EU based funds.”
“The legislation allows the ability to appoint international administrators without requiring that they be licensed in The Bahamas.”
Mr. Cooper added that passing the bill alone will not be sufficient, he added that the government must invest in promotion.
He also said that the bill represents what can be achieved when government listens, instead of seeking to dictate in an arrogant manner as we have become accustomed.
