an act or omission which would constitute drug trafficking or a relevant offence had it occurred in Bermuda.
Proceeds of Crime Money Laundering Regulations, 1998
Provides that banks, trusts, deposit companies and other categories are regulated institutions and must observe the rules
Regulated institutions required to establish & maintain procedures concerning;
appointment of compliance officer
Proceeds of Crime Amendment Act, 1998
Changes definition of relevant offences under ‘criminal conduct’ to mean all indictable offences.
Criminal Tax Evasion - only indictable tax offence in Bermuda
“ any willful act by a person with intent to defraud and where (a) the person knows a substantial amount of tax would otherwise be due (b) the conduct involved constitutes a systematic effort or pattern of activity designed to falsify material records
Conyers Dill & Pearman
The Legislative Framework for Collective Investment Schemes in Bermuda
be independent of the scheme and other functionaries
Warning language - regulated to a lesser degree
Establishing a Mutual Fund
Incorporation by registration
application to BMA
BMA to approve offering materials
Prospectus filed if public offering
Officers or Representatives
Two Resident Directors
One Resident Director and a Resident Secretary
Resident Representative and a Resident Secretary
On-going Reporting Requirements
Declaration filed annually with fees
Monthly statistical report
Prospectus - refiling on material changes
Minimum capital lowered
No annual prospectus refiling
Fergus Healy Vice President Bank of Bermuda
Substance to Investment Fund Business In Bermuda
Bermuda is in an almost unique position in the offshore world as many facets of the investment management industry have a substantial presence on the island.
Leading jurisdiction for the incorporation, management and administration of investment funds of all types and the provision of custody services.
1,339 open ended funds constituted in Bermuda with nearly $40 billion in assets as at 30th June 2000.
Very Good Infrastructure
Excellent telecommunication network
Regular flights to the US, London and Canada
Safe, stable economic and political environment
Excellent accounting, legal and technical professional support services
Strong but Flexible Regulation
Bermuda Monetary Authority (“BMA”) has a sound track record for prudent regulation
Excellent working relationship/partnership between government and industry
Bermuda is not on the FATF or OECD “blacklists” due to strong “Know your Customer “requirements.
KPMG recognized Bermuda’s strong regulatory environment in its Review of Financial Regulation in the Caribbean Overseas Territories and Bermuda for the UK Government.
Pending Licensing of Fund Administrators
Experience with Different Fund Structures
Electronic links to Brokers
Huge growth in European based sponsors
Fund of Funds
Very popular in 2000
Allow investors to be exposed to a number of hedge funds
Seeing a trend for lower minimums
Many large custodian do not want the custody side of the buisness
Experience with Different Fund Structures
Private Equity Funds
A large number of Private Equity Funds have been set up in the last three years in Bermuda by European Managers
Very unique accounting requirements
Bermuda has built up an expertise in the administration and auditing of Private
Emerging Market Funds
Seeing a revival after September ‘98
Can be very effectively used for some commercial transactions
Expertise in Administration
Many well respected administrators in Bermuda
Ability to service funds from many jurisdictions
State of the art systems
Exposure to developments in many jurisdictions
And most importantly . . . . . . . . . for the fund sponsor
A Great Place for Board Meetings!
“ QI” Status
Bermuda recognized as an approved jurisdiction
Benefit the custody business but also the unit trust business
QI’s who are non-US Custodians and Trustees - No disclosure of client details to IRS
Removal of “Ten Commandments”
Has not had the drastic impact some thought
Expertise, cost effectiveness and flexibility
Many investors still look to a 3rd party administrator for comfort
Provided opportunity for many of Bermuda’s administrators to move some of their operations on-shore
Opens up new market - domestic U.S. Hedge fund market
Bermuda has a substantial multi-faceted investment management industry.
Fund administration is major component of the investment management industry.
Bermuda’s Administrators are among the leading off-shore fund administrators in the world.
The BMA enforces a strong but flexible regulatory regime.
Bermuda’s continues to take steps to protect its good reputation.
Bank of Bermuda Contacts
Johann Wong President & Founder HedgeWorld Ltd.
Alternative Investments E-Commerce Risk Transfer
“ All Good Things Converge In Bermuda”
Bermuda is the premium offshore jurisdiction where alternative investments, risk transfer and electronic commerce converge to offer a seamless solution for businesses
Bermuda: The Convergence Island
Bermuda: The New New Thing
Innovative building blocks, include:
Seamless Solution - accounting, administration, banking, capital markets, custody, insurance, Internet infrastructure, legal...
Rule of Law - Electronic Transaction Act, 2000 and Investment Business Act, 1998 and respective Code of Conducts...
Estimated $10 billion + in reporting hedge funds domiciled and/or custodied in Bermuda (TASS+)…
PlusMarkets joint-venture with the BSX and Plusfunds.com
HedgeWorld.com, HedgeTrust Exchange and the BSX...
Annual MAR/Hedge industry conference…
Estimated $84 billion in total assets and $23.4 billion in capital in insurance companies (Deloitte & Touche 12/31/99), 1,500 insurance companies
XL Capital, MaxRe, Imagine, Tremont Insurance...
Regulatory Overview & Links
Bermuda International Business Association
Bermuda Monetary Authority
Bermuda Stock Exchange - FIBV, IOSCO Member
Insurance Advisory committee
IRS Qualified Intermediary - Bermuda is Qualified
KPMG Report - Recognized jurisdiction
OECD - FATF - Not on any black lists
U.S. Treasury Advisory - Not on black lists
The Convergence Island
Why Bermuda Mean Business
DotRisk.com - insurance site
HedgeWorld.com - hedge fund B2B infrastructure solution
Imagine Re - reinsurance wrapped around hedge funds
Invesdex - online alternative investments index
Max Re - reinsurance wrapped around hedge funds
PlusMarkets - online trading of hedge funds with BSX
Principal Guaranteed: ACE, XL, Zurich - insurance-based principal guarantee of hedge funds products
Tremont International Insurance Ltd. - insurance and annuities wrapped around hedge funds
“ Hedge Fund” Insurance Companies Widely Held Moore Capital Fixed Income AlternativeAssets Portfolio, Managed by Moore Capital Life and P&C Reinsurance (Low Volatility) $500 million MAX RE * First class insurance management team * Class 4 licence $350 million $150 million 60% 40% TOTAL ASSETS NOTES : Not a PFIC or CFC Tax Free Income Roll-Up Leverage Using Premium Flow IPO Likely-Multiple