The Securities Commission of The Bahamas (SCB) has approved a fifth SMART Fund Model (SFM005), a private banking structure for individuals/families that would be limited to no more than five investors who hold equity interests in the fund, and would have eligible (sophisticated) investors only. That is, each investor in the fund must be a person to whom a Professional Fund may be offered.
The SFM005 does not require an administrator that is licensed by the Commission, although the appointment of an administrator is required, with the additional requirement that such administrator must be a financial institution.
The Bahamas Specific Mandate Alternative Regulatory Test (SMART) Fund was introduced as a new style of collective investment vehicle with The Investment Funds Act 2003. The SMART Fund is an innovative, progressive and flexible product designed to meet the evolving needs/niche requirements of clients. Essentially, SMART funds allow industry participants to provide clients with innovative structuring solutions via a regulated vehicle, domiciled in a premier international financial centre. *(See the Media Centre for a copy of BFSB’s Investment Fund Guide)*
Promoters wishing to structure a fund in accordance with any of these approved ‘templates’ are required to contact the Securities Commission or to make the necessary arrangements with authorised administrators who are empowered to issue the necessary licence without prior reference to the Securities Commission in instances were sophisticated investor funds are involved. The Bahamas provides an attractive environment for the efficient launch of investment funds.
At the time the new IFA was enacted, the Securities Commission pre-approved four SMART Fund mandates and published the criteria for each by means of SMART Fund ‘templates’. The rules for the latest model are available now on the Commission’s site.