**Hillary H. Deaveaux
Acting Executive Director
Securities Commission of The Bahamas**
The new Investment Funds Act positions the regulatory infrastructure of The Bahamas at the cutting edge of modern investment fund administration. It serves both to update the general legislative and supervisory environment, and provides flexibility to adequately cater to the evolving needs of the global marketplace.
In a public announcement during December, Hillary Deveaux, Acting Executive Director of the Securities Commission of the Bahamas, (SCB) advised that the Investment Funds Act, 2003 had been brought into force, and that the Investment Funds Regulations, 2003 were promulgated.
The SCB has released an **”Information Paper”** covering key areas of the Act and Regulations, including transitional provisions. These provisions became effective upon the commencement of the Act. *(See link below)*
Mr. Deveaux also recently pointed out that the new funds legislation positions the nation well to deal with fall out from the scandals affecting the $7 trillion US mutual funds industry. The SCB now regulates all Bahamian-domiciled investment funds and their administrators. Regular onsite inspections have long been an integral part of the regulatory agency’s supervisory regime. According to Mr. Deveaux, the on-site inspection process ensures compliance to provisions in a fund’s Offering Memorandum that specifically address policies relating to subscription and redemption of shares.
As part of its endeavour to keep abreast in an ever-changing global regulatory environment, and to ensure a Bahamian contribution in improving the efficiency and conduct of international markets, the SCB became a member of the International Organization of Securities Commissions (IOSCO) in 1996 – shortly after its inception in 1995 – conforming to its global due diligence standards. It became a member of the Council of Securities Regulators (COSRA) in 1997.
**Regulatory Approach Complements Market Interests**
The Government, Regulator, and industry participants all confirm the right balance between regulatory and market interests afforded by the Investment Funds Act. Speaking at a Funds Sector “Special Programme for Intermediaries in Nassau” (SPIN), the Hon. Allyson Maynard-Gibson, Minister of Financial Services and Investments, said The Bahamas Government is committed to providing a red carpet experience to international and Bahamian firms involved in all aspects of financial services, including the funds sector.
Minister Maynard-Gibson also spoke to the consultative approach on the new legislation and other sector initiatives. *”Not only do we seek input from Bahamian and international financial services firms, we also ensure that their thoughts on strategy formulation, legislative, service and productivity improvement initiatives and promotion opportunities are duly considered, and where possible incorporated in our programmes and policies.”*
With a commitment to the long-term sustainability of the sector, industry participants led by the Bahamas Funds Association, have worked with Government to meet the requirements of the Securities Commission whilst expanding on the product options available in The Bahamas.
The Bahamas Financial Services Board’s CEO Wendy C. Warren also points out that the Investment Funds Act and Regulations recently coming into effect will create a risk-based regulatory approach appropriate to the market and product offerings. She says the impetus for the bill derived from the need of the regulators to better supervise the Investment Funds industry and eliminate the provisions of exempt funds. Having greatly strengthened its regulatory and supervisory functions in 2000, it was recognised by both the public and private sectors that the concept of a fund which was exempt from the supervisory authority of the Securities Commission was no longer appropriate.