New legislation is set to boost the Island’s attractiveness to outside investment.

The Bermuda Business Development Agency (BDA) said amendments to the Investment Business Act tabled in the House of Assembly last Friday was a “collaborative effort” by regulators and Government, backed by professionals and the BDA.

The move aims to put Bermuda in a good position to be considered for “third country” — non-European Union (EU) — passport rights for alternative fund managers.

Fund managers covered by the EU “passport” would be allowed to register in one EU state and market their funds more freely in other states under a regulatory regime that would apply on an equivalent basis to EU managers.

BDA chief executive officer Ross Webber said: “This is an important milestone for Bermuda’s funds industry and we applaud the inclusive public/private team approach that has been taken to ensure that our global regulation and regulatory environment support the Alternative Investment Fund Managers Directive (AIFMD) regime and that we are considered in the best possible light.”

The European Securities Market Authority (ESMA) will make a decision this week on whether to open up the EU market and ESMA is expected to announce a list of countries that should be considered by the European Commission for extension of passport rights to the funds business.

Mr Webber said: “There are procedural unknowns at this point and it may be a phased process but we anticipate Bermuda will now be seen to have a sufficiently rigorous and well-resourced structure for fund managers located in our jurisdiction to operate in line with European rules and requirements.”

Jeremy Cox, CEO of regulator the Bermuda Monetary Authority (BMA), added: “The amendments will supplement the present licencing and regulatory provisions which apply to any manager issued an investment fund licence by the BMA.

“But, under the amendments, alternative investment fund managers may choose to come under the AIFMD-equivalent regulatory provisions if they wish to market their funds in Europe.”

Members of the BDA’s asset management industry group and AIFMD subcommittee gave input to the new legislative measures.

BDA business development manager Sean Moran said: “Our collaborative view is that investors located in the European Union stand to benefit significantly from inclusion of Bermuda under the AIFM directive, because it offers opportunities to place their capital with well-supervised fund managers outside their own region.

“It also shows recognition of requirements and standards which the EU has initiated in this area. We trust the EC will recognise Bermuda’s robust regulatory credentials and our long legacy of compliance and transparency that set us apart from many other jurisdictions.”