Regulatory Alerts2009-02-27
Added · Updated
Investment Funds (SMART Fund) Rules, 2009
The Securities Commission of The Bahamas establishes requirements for funds operating as SMART Fund Model SFM 006, restricting eligibility to investors who qualify for professional funds. These funds must maintain identical shareholders, creditors, and assets to an originating Bahamian investment fund, with no more than 30% of the originating fund's gross assets invested in the SMART fund. The rules waive annual audit and net asset valuation requirements, mandating instead that operators file performance reports every six months and certify fund qualification by January 31 annually.
· , Citation. Interpretation. Description of SFM 006. Parameters and requirements of SFM 006. Ch. 369A THE INVESTMENT FUNDS ACT (CHAPTER 36 9A) ",C.lRITIES eOA/Al/S: "''"" RECEIVED ~/O", FEB 2 0 2009 THE INVESTMENT FUNDS (SMART FUND) RULES, 2009 In exercise of the powers conferred by section 5 (3) of the Investment Funds Act, Chapter 369A, the Securities Commission of The Bahamas makes the following Rules -
- These Rules may be cited as the Investment Funds (SMART Fund) Rules, 2009.
- In these Rules -
" SFM 006" means SMART Fund Model SFM 006 as licensed under rule 3; "term sheet" means the offering document of a SMART' Fund that complies with the offering document requirements as provided in Schedule 1. No fund shall be licensed to operate as a SFM 006 unless an investor of the fund is a person to whom a professional fund may be offered. 4. (1) Subject to paragraph (2), the Investment Funds and Regulations 2003 shall apply to a fund operating as a SFM 006. (2) A SFM 006 in relation to the items set out in column 1 of the table appearing in Schedule 1, shall comply with the provisions prescribed in column 2 of that table. S.I. No. Z8 '~ ?Coq Extraordinary Gazette dated I ~ . d2... d1 Supplement Part n dated~;;<:; _____ _ Sigaed, ______ e./ _____ _
OFFERING DOCUMENT/TERM SHEET SCHEDULE 1 A term sheet is required and shall contain the following information - i. Name of Fund; ii. Date established; iii. Reason for the Fund; iv. Name and address of Operators; v. Nature of Equity Interest; vi. Redemption policy including a Statement that redemptions shall only occur with the prior written notice from time to time by the Operators of the Fund to all shareholders of record giving a notice period within which shareholders shall be required vii. viii. to redeem their shares; Name and address of all parties related to the Fund; A Statement that all of the holders of the equity interests, creditors of the Fund (unlimited in number) and assets are the same as those of another specified investment fund or group of funds (excluding recognized foreign funds) ; ix. A Statement that no new subscribers are permitted into the Fund once the Fund is launched; x. A Statement that the Fund shall not be audited annually and that a performance report/management accounts shall be filed every six
· '. CONSTITUTIVE DOCUMENTS months with the Securities Commission and each shareholder of record; xi. A Statement that net asset valuation reports are not required and shall only be effected at the discretion of the Operators; xii. A Statement by the Operators of the Fund that they are in possession of satisfactory due diligence on each shareholder of record; xiii. A Statement that at least seventyfive percent (75%) of the shareholders who would, be the shareholders and creditors of the originating investment fund, approved the establishment of the Fund; xiv. A Statement whether the assets require a custodian/prime broker; xv. Fees and expenses; xvi. Termination. The Constitutive Documents shall provide that only shareholders of an Bahamian investment fund restricted to investors to identified which is whom a professional fund may be offered (excluding recognized foreign funds) may become shareholders of the Fund and that no new subscribers are permitted into the Fund.
. , • SUBSCRIPTION AGREEMENT ADMINISTRATOR The Subscription Agreement is optional. However, when required, the Subscription Agreement of the Fund shall contain confirmation - (i) that the investor of the Fund agrees with the regulatory requirements applicable to the SMF 006; and (ii) that the due diligence process were previously satisfactorily completed. The Fund is not required to have as its administrator, an entity licensed as such under the Investment Funds Act, Ch. 369A in which case the Operators are responsible for the day-to-day administrative functions of the Fund. These functions may be delegated to any reputable person in any jurisdiction on an as needed basis. Where the Fund does not appoint a licensed Administrator, it shall be licensed by the Commission.
• • LICENSING REQUIREMENT PERCENTAGE RESTRICTIONS FINANCIAL REPORTING REQUIREMENTS ANNUAL CERTIFICATION The Operators of the Fund shall submit to the Licensor no later than 30 days after the date of its licence- (i) certification by the Operators that the holders of equity interests, creditors and assets are the same as those of another specified investment fund (excluding recognized foreign funds) . No more than 30% of the gross assets of the identified Bahamian investment fund may be invested in the Fund (SFM 006). No annual audit or net asset valuation reports are required. A performance report/management accounts shall be filed every six months with the Securities Commission and each shareholder of record. The Operators of the Fund no later than January 31 of each year shall certify to the Commission that the Fund is qualified to operate as a SFM 006. Made the \ ~.xt... day o~~, 2009. The Securities ~~ Commission of The Bahamas