Regulation of investment providers in Bermuda has been tightened with the introduction of a tougher framework of business practices.

The House passed the Investment Business Act 2003, legislation that has come as a result of a comprehensive review of Bermuda?s role in an industry that has undergone seismic global changes in recent years.

?The Finance Ministry took up the challenge to introduce new legislation which would be more robust and address international concerns,? said Attorney General Paula Cox, introducing the bill on behalf of her father, Finance Minister Eugene Cox who was seated next to her throughout Friday?s debate.

?This legislation will strengthen Bermuda?s regulatory framework and the marketplace generally. The bill introduces specific measures to discipline practitioners and ensure that investment providers are fit and proper and have the necessary experience to properly deal with the interests of investors.

?The bill also provides for more sanctions, both criminal and civil, to better address abuses.?

The new legislation also widens the existing powers and responsibilities for the Bermuda Monetary Authority and added, to the agreement of everyone in the House, ?this bill is complex because the industry is complex?.

Shadow Finance Minister Grant Gibbons said that the UBP was in support of the legislation, although he did express concern about the detail of a number of the bill?s 88 clauses.

?There is clearly a need to regulate the investment area,? he said.

?It is important fort the protection of the reputation of this jurisdiction and for the protection of clients.

?It is very important that we get the balance between what the investment business sector is allowed to do and the level of bureaucracy.

?We have to ensure that the degree of regulation is not overbearing ? and there have already been a variety of bleats from the industry in that regard.?

Government Minister Terry Lister added: ?This act will lead to a more effective investigation and enforcement policy. Investors in Bermuda will have a greater sense of security that they will be protected from those investment providers who indulge in bad behaviour.?

Shadow Home Affairs Minister Maxwell Burgess retorted that ?the legislation itself will not be able to guarantee investors can go to bed at night thinking all is well? and called for enforcement to make sure the bill?s powers us wielded effectively.

Paget West MP Patricia Gordon-Pamplin was concerned about some of the promises made in the legislation, particularly in reference to a clause promising an individual is entitled to recover any funds lost in a pyramid scheme.

She said that, particularly with the benefits of modern technology such as the Internet, recovering funds lost in pyramid schemes might not be especially easy to do. No matter what efforts are made to prevent it she said some unsuspecting people will still find themselves caught in that situation. ?How practical is it to suggest their money will be recovered?? she said.

Ms Cox agreed her concerns were ?a valid issue?, but added that there are tracking mechanisms which can be invoked. The Minister could use such mechanisms in a legislative framework which would also be useful for the Bermuda Monetary Authority, she said.

The BMA plans to be much more proactive in working with the Police and other relevant authorities (including other jurisdictions) to monitor pyramid schemes, she added.