Butterfield Fund Services (Bermuda), a subsidiary of Butterfield Bank, has received a fund administration licence from the Bermuda Monetary Authority under the Investment Funds Act 2006 that became effective on March 7 this year, requiring all Bermuda-based administration companies to obtain a licence.
The licence allows Butterfield Fund Services to service Administered Funds, a new class of Bermuda funds that are allowed to operate based on the proven qualifications of their licensed administrators, as well as continuing to service all other types of regulated funds incorporated in Bermuda.
The new category, as with similar types of fund in Jersey and Guernsey, involves regulation of the Bermuda-based service provider rather than direct supervision of the fund product. Previously fund administrators were regulated under the Proceeds of Crime Act 1977, and were subject to a level of due diligence when handling subscriptions and redemptions similar to those for banks, trust companies and investment providers.
The new legislation is designed to help Bermuda recover ground in the fund services industry, where it has recently slipped behind the British Virgin Islands as a fund domicile. In addition to putting in place the licence requirement for administrators, it also removes some of the administrative hurdles from the incorporation process for funds.
'As the largest and one of the earliest locally-based fund administration providers in Bermuda, we are pleased to be among the first companies to have been granted a fund administration licence by the Bermuda Monetary Authority,' says Frank Sebestyen, senior vice-president and group head of fund services at Butterfield Bank. 'We will continue to make the necessary investments in highly qualified staff and technology to maintain our position as a leading international fund administrator.'
Butterfield Bank is Bermuda's largest independent bank and a specialist provider of onshore and offshore financial services including retail, corporate banking and treasury activities in Bermuda, Barbados and the Cayman Islands, and private banking, asset management and personal trust services from Bermuda, the Bahamas, Cayman, Guernsey, Switzerland and the UK.
The group provides investment and pension fund administration, asset management and corporate trust services to corporate and institutional clients from Bermuda, the Bahamas, Canada, Cayman and Guernsey.