Bermuda Monetary Authority forms initiative to improve disclosure practices
The Bermuda Monetary Authority has established a joint initiative with industry representatives and the Pensions Commission aimed at improving disclosure practices among Bermuda pension providers and investment firms.
The authority has established a working group that will review and revise the existing code of conduct issued under the Investment Business Act 2003.
The General Business Conduct and Practice Code of Conduct for investment providers was published in 2004. It provides general guidance to investment providers - whether dealing with personal or institutional investments, including pension funds - as to their conduct in dealing with clients, covering such areas as avoiding misleading or deceptive representations; avoiding or disclosing conflicts of interest; providing periodic information/performance reports; disclosure of remuneration and commissions; and generally helping clients to make informed investment decisions.
“Our goal is to incorporate more explicit guidance as to the form and content of information investment firms and pension providers give to their clients,” says Matthew Elderfield, chief executive of the authority. “This development is consistent with good international practice in that it seeks to place higher standards of disclosure on pension providers and investment firms generally to make sure individuals receive clear information about where their money or pension funds are invested, the performance of their investments, the various fees they are charged and the impact that has on their investment returns.”
The working group will consider and develop appropriate enhancements to the code.
Peter Sousa, chief executive officer of the Pensions Commission of Bermuda, says: “With respect to private, occupational pension schemes established under the National Pension Scheme (Occupational Pensions) Act 1998, the importance of providing complete and transparent information upon which plan sponsors and plan members can make intelligent decisions cannot be overstated. The Pension Commission supports the Authority’s initiative in this regard and is pleased to be able to work with it and the industry representatives in enhancing its code of conduct.”
The firms represented on the working group include the Argus Group, Bermuda Investment Advisory Services, Butterfield Bank, Capital G Group, Colonial Group, Freisenbruch-Meyer Group, First Bermuda Group, HSBC Bank, Kast Investment Management and BF&M Group.
The authority anticipates that the review by the working group will be completed by January 2010, with a consultation paper being published to the market by the end of March. It is expected that the revised code will be issued by the end of the second quarter of 2010.
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