The Bermuda Monetary Authority has introduced an approval in principle (AIP) process designed to support the more efficient establishment of new investment funds that are proposed to be registered or authorised under the Investment Funds Act 2006.

The law firm Conyers said in its latest newsletter that the BMA has indicated that AIP applications are expected to be processed on an expedited time frame, generally within two to three business days following submission of the required documentation, compared with the timing for a standard registration or authorisation application.

“However, the BMA’s notice made clear that AIP should be viewed as a preliminary step in the launch timetable, rather than as a substitute for registration or authorisation under the Act,” Conyers said.

After receiving AIP, a fund must then submit a formal registration or authorisation application to the BMA for approval before commencing business, accepting subscriptions or representing itself to investors as having been registered or authorised under the Act.

Conyers said, in practice, the AIP process may assist sponsors and managers in planning Bermuda fund launches by providing an earlier regulatory checkpoint.

“Launch timelines should nevertheless continue to build in time for the full application process,” Conyers stated. “In addition, offering or investor marketing materials should not describe the fund as registered or authorised until final BMA approval has been obtained.”