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Economic Substance – Extension of the Scope of the Relevant Activity of “Fund Management”

The Economic Substance Amendment (No.2) Regulations 2021 (the “Amendment Regulations”) were enacted on 23 December 2021, making certain changes to the Economic Substance Regulations 2018, principally to amend the definition of the relevant activity of “fund management”.

Pursuant to the Amendment Regulations, an entity will be carrying on the relevant activity of “fund management” if it manages investments for an investment fund. For these purposes, “investment fund” has the meaning given to such term in the Investment Funds Act 2006 (and includes both open-ended investment funds and closed-ended investment funds), and the phrase “managing investments” should be construed in accordance with the Investment Business Act 2003 (the “IBA”).

Consequently, where an entity is managing or offers, or agrees to manage, investments for an investment fund, it will be carrying on the relevant activity of “fund management”, whether or not it is required to be licensed to conduct such activity in accordance with the IBA. Prior to the Amendment Regulations, an entity would be carrying on the relevant activity of “fund management” only if it managed investment for funds in respect of which a licence was required in accordance with the IBA or for which a licence would be required if such activity was taking place in Bermuda.

 

To continue reading full articles in PDF format:
Economic Substance – Extension of the Scope of the Relevant Activity of “Fund Management”

 


Neil Henderson
Director

Bermuda   +1 441 298 7846


Anthony D. Whaley
Director

Bermuda   +1 441 299 4927


Charles G.R. Collis
Director, Head of Bermuda Corporate Practice

Bermuda   +1 441 299 4918


Tracey Spevack
Head of Corporate Services Bermuda

Bermuda   +1 441 299 4942


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