United States: Investment Funds Bill, 2019

Last Updated: May 29 2019
Article by Epstein Becker & Green


1. Short title and commencement.

  1. This Act may be cited as the Investment Funds Act, 2019
  2. This Act shall come into operation on such day as the Minister by notice published in the Gazette, may appoint and the Minister may cause different provisions of this Act to come into operation on different days by notice or notices published in the Gazette.

2. Purposes of Act.

The purpose of this Act is to —

  1. modernize the regulatory framework for investment funds in The Bahamas to achieve international standards and best practices of the investment funds industry
  2. enhance the provisions of the Securities Industry Act, 2011 (No. 10 of 2011) to maintain the status of The Bahamas as a reputable international financial centre.

3. Interpretation.

In this Act –

"accredited investor" has the same meaning as in the Securities Industry Regulations, 2012 (S.I. No. 1 of 2012);

"administrator" or "governing administrator" in relation to an investment fund that is an investment condominium, has the same meaning as in section 2 of the Investment Condominium Act, 2014 (No. 38 of 2014);

"AIFM" means a company incorporated under the Companies Act (Ch. 308) or the International Business Companies Act (Ch. 309) who —

  1. markets an investment fund or an EU AIF in the EU; or
  2. manages an EU AIF whether or not it is marketed in the EU, and is licenced under section 29;

"AIFMD" means Directive 2011/61/EU of the European Parliament and of the Council of the 8th June, 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No. 1060/2009 and (EU) No. 1095/2010;

"AIFMD custodian" means a person appointed under section 91;

"alternative investment fund" has the same meaning assigned to an AIF under article 41(a) of AIFMD;

"auditor" means a person who is —

  1. a professionally qualified accountant; or
  2. an accountant licensed to practice as such under The Bahamas Institute of Chartered Accounts Act, 2015 (No. 13 of 2015); and
  3. approved by the Commission to act on behalf of a regulated person;

"carry on business in or from The Bahamas", and its derivatives, means —

  1. to incorporate, register or establish an investment fund in The Bahamas;
  2. to establish a unit trust where the governing law is the Commonwealth of The Bahamas;
  3. to operate as a fund licensed under this Act;
  4. to make an invitation to a person in The Bahamas who is not an accredited investor to subscribe for equity interests in an investment fund, regardless of where the investment fund is incorporated, registered or established; or
  5. to engage in investment funds business in The Bahamas as an investment fund manager, investment fund administrator, investment fund advisor or AIFM;

"Chief Executive Officer" means a person appointed under section 38;

"clearing facility" has the same meaning as in section 4 of the Securities Industry Act, 2011 (No. 10 of 2011);

"Commission" means the Securities Commission of The Bahamas established under the Securities Industry Act, 2011 (No. 10 of 2011);

"company" means a body corporate incorporated or registered under the laws of The Bahamas or of any other jurisdiction;

"competent authority" means the regulatory authority that is empowered by the laws of a foreign jurisdiction to supervise AIFMs, EU AIFMs, investment funds, EU AIFs and AIFMD custodians in that jurisdiction;

"Compliance Officer" means a person appointed under section 39;

"connected person" means —

  1. any individual or company beneficially owning, directly or indirectly, ten per cent or more of the ordinary share capital of an investment fund or able to exercise, directly or indirectly, ten per cent or more of the total votes in that fund;
  2. any individual or company controlled by an individual or company referred to in paragraph (a);
  3. any member of a group where the fund or a person referred to in (a) or (b) forms a part;
  4. any director or officer of the fund or any director or officer of a company referred to in paragraphs (a), (b) or (c); or
  5. any person being a promoter, broker, underwriter, banker, investment banker or professional advisor who has a special relationship with any person described in paragraph (a), (b) or (c);

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