The Bahamas has made significant strides in the investment funds area, particularly in the past few years with the passage of the Investment Funds Act in 2003. The modern Act which established three primary categories of funds – Professional funds, SMART funds and Standard funds allowed for greater efforts to market The Bahamas as a domicile for investment funds and for the growth in this important sector.

With the introduction of the legislation, The Bahamas continued to adopt a licensing regime which is different to the registration system adopted by some jurisdictions. The Bahamas model for licensing is due to the membership by the Securities Commission of The Bahamas (SCB) in the International Organization of Securities Commissions (IOSCO). Although industry preferred the registration route, it recognised and agreed that IOSCO membership is in the best long-term interest of the funds industry in The Bahamas, since it reinforces the legitimacy of the jurisdiction as one which is properly regulated within established and recognised international standards.

The industry also recognised that The Bahamas provides an excellent alternative through the Unrestricted Fund Administrator (UFA). The UFA is one that has secured the delegated authority of the SCB to license funds – thus providing for the “same day” launch of investment funds and enabling it to compete with timelines offered in any jurisdiction.

Further to industry proposals, the SCB has recently also given its approval to a fast track process for the licensing of Professional Funds (those offered to only accredited investors) by Restricted Fund Administrators (RFA). Industry now anticipates the publishing of the rules that support this environment.

As a consequence, a Bahamian UFA can license and launch Professional and SMART funds© in one day and a Bahamian RFA (upon publication of the rules) would be able to have licensing approval of Professional and SMART funds within one week.

At the moment, Standard (Retail) Funds do not enjoy the same fast track approval process. However, industry is now studying mechanisms that could improve the licensing timeframes for these types of funds and is confident, based on the constructive and open dialogue with the SCB – that has helped lead to other recent improvements and advancements in the jurisdiction’s funds environment – that we will continue to see appropriate and market sensitive approval process enhancements.

BFSB’s marketing efforts have been structured to communicate improvements in the regulatory regime and to increase The Bahamas’ visibility with funds managers and their understanding of the significant developments that have occurred in our funds environment. This is being accomplished through participation and sponsorship at conferences in Europe, North America and London, and by meeting with key stakeholders in key city centres or in The Bahamas through our SPIN (Special Programme for Intermediaries in Nassau) outreach.

All of these recent and pending developments in our funds industry are occurring in a global market that itself continues to evolve, and where there is fierce competition among jurisdictions. Competing jurisdictions, many of which have been in the funds business longer than The Bahamas, are as determined to maintain their market share as we are to increase our share of business. The growth of The Bahamas as a player in the alternative funds industry will be achieved through the commitment of the Bahamian stakeholders.