Funds: filing requirements and Integra
Investment funds registered, authorised or designated under the Investment Funds Act 2006 have ongoing filing requirements, as well as requirements in relation to the appointment of service providers and annual fees.
The ongoing filing requirements for funds were until recently made via the Bermuda Monetary Authority’s online Electronic Regulatory Information Compliance Application (Erica) system.
The BMA ceased accepting new filings via that system on March 9 and Erica was replaced by Integra, an integrated web-based portal, on March 15.
Many will be familiar with the Integra system as it is used by corporate service providers in relation to shareholder and beneficial ownership information submitted to the BMA, among other things.
Service providers who were not existing users of Integra and made filings via the old Erica system need to become familiar with the Integra system. The BMA have issued a number of resources including user guides and FAQs to assist new users.
Operators of funds are responsible for ensuring regulatory filings to the BMA required under the IFA are up-to-date. Operators are the board for companies, general partner for partnerships, trustee for unit trusts and manager for LLCs.
Operators typically outsource the responsibility for various filings to service providers, including fund administrators and legal advisers.
The requirements and frequency of filings depends on the classification of fund.
The next annual filing for funds with a financial year-end of December 31 is by the end of June.
Registered funds include professional Class A funds, professional Class B funds, professional closed funds and private funds.
The operator of registered funds must certify to the BMA annually within six months of its financial year-end that the fund satisfies the requirements for registration and will continue to satisfy them on an ongoing basis.
Registered funds must include with the filing audited financial statements – except private funds, which can submit management accounts – a certification form confirming the registration requirements continue to be met and disclosing material changes to the fund prospectus or terms of offering, net asset value, amount subscribed and amount redeemed.
Professional Class B funds must also include information on the changes to the fund’s directors and service providers. Such funds must apply to the BMA before appointing a person as a director or service provider.
Authorised funds, which include standard funds, institutional funds, administered funds and specified jurisdiction funds, have filing requirements that depend on their classification.
Institutional funds, administered funds and specified jurisdiction funds must make filings within 20 business days after each calendar quarter. Standard funds have monthly filings within 20 business days after month-end. These filings include NAV, amount subscribed and the amount redeemed.
Operators of authorised funds must within six months of the fund’s financial year-end file a statement of compliance confirming that the fund has at all times during the preceding financial year been in compliance with the provisions of the IFA, fund rules and prospectus rules. In the event that the fund has not been in compliance, they must provide a statement setting out the particulars of the breach.
Operators of authorised funds must also give notice in writing of certain proposed changes including material changes in the authorised fund’s offering document, replacement of a service provider, replacement of a trustee, director, general partner or manager (as applicable) and the winding up of the affairs of the authorised fund.
Institutional funds must give notice to the BMA of the proposal to replace a trustee, director, general partner or manager, as applicable, and wind up the fund.
Standard funds have more stringent requirements and are required to obtain prior approval of the proposed changes.
The last category is overseas funds, which are different to registered and authorised funds because they were incorporated or established in jurisdictions outside Bermuda and have been designated as an overseas fund by the BMA. Overseas funds are managed or carry on promotions in or from Bermuda.
An overseas fund must certify to the BMA annually within six months of its financial year-end that it continues to satisfy the requirements for designation.
The annual certification must include material changes to the offering document during the relevant year; a statement confirming that the overseas fund has at all times during the preceding year complied with the rules and requirements of the overseas regulatory authority in which it was incorporated or established; and a statement of compliance stating that it has been in compliance with the provisions of the IFA.
The BMA have a number of powers of intervention, including fines, and registered, authorised and overseas funds must ensure that they comply with these ongoing obligations.
It is important that funds file in a timely manner. Any funds that previously filed under Erica are encouraged to become familiar with the Integra system before the June deadline to avoid late filings.
Jennifer Eve is Counsel and a member of the Funds and Investment Services team with the Corporate practice group at Appleby. A copy of this column can be obtained on the Appleby website at www.applebyglobal.com.
This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.