Investment funds and their administrators have obligations to report certain information to the Securities Commission of The Bahamas under the Investment Funds Act, 2003. Financial reporting must occur on an annual basis, while reporting of problems with the investment fund must occur as soon as an investment fund administrator learns of the problems. These reporting obligations help protect investors and keep funds accountable.
Each year, licensed investment fund administrators must pay their licence fees and the principal office fees for the funds they administer. Administrators complete written declarations stating that all information about the funds they administer provided to the Securities Commission is true and correct. These declarations are due on January 31st of each year. If any information the Securities Commission has about a fund is no longer correct, the administrator must amend it.
Investment fund administrators submit their financial statements to an approved auditor for a yearly audit. After the audit, the administrator provides the financial statements to the Securities Commission within four months of the end of the administrator's financial year. The Securities Commission may grant extensions of the time to file financial statements beyond the four months in its discretion.. Investment funds themselves must provide the administrators with financial statements as well.
Aside from annual reporting obligations, investment fund administrators must keep an eye on investment funds' financial viability and report any problems to the Securities Commission. For example, if an investment fund or a promoter or operator of the fund has the following issues, the administrator immediately must give the Securities Commission written notice, explaining the problem and giving the reason for its knowledge of the problem or belief that there is a problem:
- The investment fund or a promoter or operator is or is likely to become unable to meet any of its obligations as they fall due,
- The investment fund or a promoter or operator is carrying on business otherwise than in accordance with the Investment Funds Act or any other applicable legislation, or
- The investment fund or a promoter or operator is carrying on business in a manner that is or is likely to be prejudicial to investors or creditors of the fund.
There are certain matters that investment fund administrators must keep confidential and not report to the general public unless reporting is for the purpose of helping the Securities Commission carry out its functions, is permitted by the Bahamian Courts, or is required by law. Information relating to a licensee, person exempted from licensing, or foreign fund is considered confidential, as is information relating to a customer or client and the content of any application made to the Securities Commission. Information already available to the public is not confidential, and there are a number of other exceptions to confidentiality with which administrators should be familiar..
To find out more about investment fund regulation in The Bahamas, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.