Bermuda is awaiting an answer from a European Union financial watchdog on progress towards gaining a “passport” that would allow island-based alternative investment funds to freely market their services throughout the 28-country bloc.

The island is one of nine countries awaiting an update expected this month after an assessment by the European Securities and Markets Authority.

Esma recommended last year that British dependencies of Jersey and Guernsey be admitted to the EU passporting regime, while Switzerland should gain access after adopting new rules. The final decision is up to the European Commission.

The EC wrote to Esma in December last year, requesting an assessment of nine non-EU jurisdictions with similar regulations to the EU, for what is known as Alternative Investment Fund Managers Directive passport status.

Other countries being considered alongside Bermuda in the second wave are Australia, Canada, Cayman Islands, Hong Kong, Isle of Man, Japan, Singapore and the US.

A spokesman for financial services at the EC told Bloomberg: “The Commission is awaiting Esma’s advice and hasn’t yet taken a decision. Third-country provisions vary for each piece of EU legislation and are tailored to each specific sector and activity.”

Hedge funds and lawyers based in London will be watching the decisions closely, especially since Britons voted to leave the EU in a referendum last month, potentially jeopardising the future of UK financial services’ passporting rights.

Leaving the EU would force Britain to join the line to apply for an AIFMD passport. The decision of on what terms to grant it would inevitably have a strong political element.

“This decision is an important test and will set a precedent for UK alternative funds and their access to a marketing passport for European investors post Brexit,” said Lisa Cawley, a partner at law firm Kirkland and Ellis in London. “If other third countries are allowed access by Esma, then it will be easier for London funds to get approval.”