Net assets of Bermuda incorporated collective investment schemes reached $18 billion in fourth quarter, Finance Minister Grant Gibbons revealed yesterday.

The latest figures, for the three months ended December 31, 1996, show net assets rose to $18.23 billion from $15.62 billion three months earlier, a 16.7 percent increase.

And over the 12 months to December 31, net assets have grown a substantial 36.1 percent from $13.39 billion.

"We have seen strong growth in the number of collective investment schemes set up in Bermuda,'' the finance minister, speaking at a major mutual funds conference in the US, said.

Collective investment schemes include mutual funds and unit trusts.

Dr. Gibbons spoke yesterday at a Bermuda market briefing at the International Bar Association/Investment Company Institute Education Foundation 1997 mutual funds conference in California.

Dr. Gibbons also said that 183 collective investment schemes had been incorporated in Bermuda in 1996, bringing the total to 859, an increase of 27.1 percent compared to a year earlier.

In fourth quarter, the total number of collective investment schemes in Bermuda rose 15.3 percent from 745 compared to three months earlier. "The Bermuda Government sees itself in these matters as one half of a partnership whose other member is the industry itself,'' Dr. Gibbons said.

"We have a clear sense of the need to work together with the business community to constantly redefine our business legislation and to ensure that our regulatory system works efficiently.'' Dr. Gibbons cited the Bermuda International Business Association (BIBA) mutual funds sub-committee as an example.

The BIBA sub-committee, which also includes representatives from the Ministry of Finance and the Bermuda Monetary Authority (BMA), was set up to improve regulations made under the Bermuda Monetary Authority Act.

"They have now submitted their report, and we are in the process of putting their recommendations into effect. They have suggested three classes of collective investment scheme, a Bermuda recognised scheme, a Bermuda code scheme and Bermuda institutional scheme,'' Dr. Gibbons said. The recognised scheme would be the most regulated.

"It would follow the UK Financial Services Act, and we are putting in significant additional work on the regulations covering this class.

"We have, however, had a positive response from other jurisdictions who have indicated their initial willingness to have this class accepted for retail sale in their jurisdiction.'' The Bermuda code scheme would cover collective investment schemes which meet BMA code of conduct requirements.

The third class would be aimed at sophisticated investors who are capable of analysing risks from an investment and administrative perspective.

Dr. Gibbons also said that the corporate matters review committee, established last year to recommend improvements in company incorporation procedures, is another example of the Government/business partnership.

The Bermuda briefing, the third consecutive year for this marketing effort, is organised by BIBA.

It was estimated that about 160 IBA/ICIEF conference delegates attended the BIBA briefing. In all, about 1,800 delegates are at the conference.

BIBA chairman Tom Davis said the IBA/ICIEF conference continues to be the main event on the mutual funds conference calender.

And though the conference is focussed on the $3 trillion US market, there is much interest in the $1 trillion offshore market, Mr. Davis said.

Bermuda Stock Exchange CEO William Woods added that a "large number of funds are applying now for Bermuda Stock Exchange listings.'' He anticipates the Bermuda Stock Exchange will soon make announcements that several of these funds will join the 63 mutual funds currently listed on the Bermuda Stock Exchange.

Dr. Gibbons, Mr. Davis and Mr. Woods are among a contingent of about 25 people from Bermuda's mutual fund industry attending the IBA/ICIEF conference.

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