The Bermuda Monetary Authority has unveiled plans to crack down on “greenwashing” by investment funds, proposing new rules that would require clearer sustainability disclosures and ban misleading fund names.

In a consultation paper, the BMA said the changes would apply to all Bermudian-registered and authorised funds that make environmental, social or governance claims. The goal is to give investors more reliable information and prevent funds from using labels that do not match their activities.

For example, under the proposals a fund could not call itself “sustainable” unless sustainability was central to its investment strategy. Likewise, a fund that does not invest in insurance-linked securities, a key Bermuda market, would be prohibited from including “ILS” in its name.

The Authority also wants funds to provide more detailed information in their offering documents. This includes explaining their investment objectives and strategies, the risks involved, any benchmarks they use to measure performance and how often sustainable assets are valued.

The proposals “represent a significant step forward in promoting transparency within the investment funds sector. They will enable sustainable funds to clearly distinguish themselves in the market and empower investors to make informed investment decisions,” the BMA said, adding that the measures would also align Bermuda with international standards set by the International Organisation of Securities Commissions.

The consultation follows the BMA’s 2024 pledge to integrate climate-related issues into financial regulation and to explore a voluntary “sustainable fund” designation.

If approved, the rules would give funds six months to comply. Industry stakeholders have until November 25 to submit feedback via e-mail to policy@bma.bm.

• For the complete consultation paper from the BMA, see Related Media

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2025-09-02-16-58-43-Consultation-Paper-Sustainability-Disclosures-and-Prohibition-on-the-Use-of-Misleading-Fund-Names.pdf