In an extremely encouraging and highly anticipated press release, the Bermuda Monetary Authority last week announced that they are advancing preparations to sign a cooperation agreement with Europe under the Alternative Investment Fund Managers Directive (AIFMD).
Up until now, the only jurisdictions that have announced that they have concluded an agreement are Switzerland and Brazil, so it is a very positive testament to Bermuda's strength as a jurisdiction that our home regulator can make the statements that it has.
The cooperation agreement is one of the three principal conditions that need to be met in order for regulated third country funds, such as those domiciled in Bermuda, to continue to be managed by European investment managers and/or to be marketed into Europe under the existing private placement regimes in the EU. With a signed cooperation agreement, Bermuda will be able to satisfy these principal conditions, namely:
- There is a cooperation agreement in place with the third country fund or fund manager domicile and the home member state.
- Third countries are not on the Financial Action Task Force list of non-cooperative jurisdictions - which Bermuda is not.
- In respect of marketing, agreements for exchange of information for tax purposes are in place between EU Member States and the relevant non-EU jurisdiction - Bermuda has an extensive Tax Information Exchange Agreement (TIEA) network already and continues to actively expand this list through a dedicated team at the Ministry of Finance.
In recognition of the importance of the funds industry to Bermuda, and understanding the potential effect of AIFMD, the Bermuda Monetary Authority has been actively working with both the Bermuda Government and stakeholders in the private sector to ensure that Bermuda is ready and able to secure seamless participation for our European facing stakeholders in the funds space.
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