As at 31 August, we had 60 Sub-fund Managers on the Bermuda and Cayman platforms.
Each of the Bermuda and Cayman platforms are incorporated as segregated account/ portfolio companies and are authorised as mutual funds. The segregated account / portfolio company structure allows the Platform to establish separate Sub-funds each of which is a segregated account/ portfolio and its assets and liabilities are segregated or ring-fenced from the general assets of the Platform and the assets and liabilities of outer Sub-funds on the Platform. This concept of segregation is recognised as a matter of statute and is supported by recent case law. The establishment of a Sub-fund does not create a separate legal person. The Platform remains the legal person with the capacity to enter into transactions or contracts relating to the Sub-fund.
Investors receive participating shares in the Sub-fund which are non-voting. Emerging Asset Management Ltd (“EAM”) owns the management shares which are voting shares.
In each of Bermuda and Cayman, the new Sub-fund is established when the Sub-fund supplement is filed. The supplement is supplementary to the Private Placement Memorandum for the Platform.
The supplement contains details of the offering of the shares including, subscription and redemption terms, a description of the investment objective and strategy and any relevant investment restrictions, disclosure of any leverage used, details of the service providers and a description of the custody and prime brokerage arrangements, biographical details of the principals of the Sub-fund Manager and a description of its contractual arrangements with the Sub-fund and a summary of fees and expenses.
In Bermuda, the supplement needs to be approved by the regulator and there is a filing fee of $250.00 to file the supplement with the Bermuda Monetary Authority for approval which takes up to 5 working days and a $82.00 fee to file it with the Registrar of Companies in Bermuda. The Sub-fund can only commence business and issue its shares to investors when the Supplement has been approved.
The Platforms have each appointed a board of directors and company secretary.
The auditor is Deloitte, Malta and legal counsel is ISIS Law, Bermuda for the Bermuda Platform and Deloitte, Cayman and Embury’s, Cayman for the Cayman Platform.
One of the principal benefits of the Platform offering is that we have negotiated highly competitive rates with the professional advisers due to the volume of business which they receive from the Platforms and these cost savings have been passed on to our clients.
Emerging Asset Management Ltd is the fund manager and Apex Fund Services Ltd is the Administrator and Registrar.
The Sub-fund will need to appoint a Custodian and Prime Broker although the requirement to appoint a Custodian can be waived if there are appropriate alternative arrangements in place for safeguarding of the Sub-fund property or if the Sub-fund is a feeder fund.
The Sub-fund Manager is responsible for carrying out the day to day advisory services of the Sub-fund and implementing its investment strategy. It s contractual duties and responsibilities are set out in the Investment Advisory Agreement entered into between the Platform on behalf of the Sub-fund, EAM and the Sub-fund manager. One of the principal benefits of the Platform offering is that it frees up time and resources for the Sub-fund Manager so that it can focus on its trading strategy and building a successful track-record.
The Bermuda Platform is regulated by the Bermuda Monetary Authority and the Cayman Platform is regulated by the Cayman Islands Monetary Authority. Both are experienced and well respected regulators. The regulator may require such information or explanation in respect to the Sub-funds as may be reasonably required by them to enable them to carry out their regulatory duties and may require access to the records of the Sub-fund.
Audited financial statements must be prepared for the Sub-fund and these are submitted to the Regulator.
The Sub-fund Manager is exempt from licensing requirements in each of Cayman and Bermuda. In Cayman an annual declaration of exemption must be filed by it with CIMA.
The Sub-fund Manager is required to comply with any local legal or regulatory requirements in the country in which it carries on its business and professional advice should be taken on this.
The principals of the Sub-fund Manager must be fit and proper persons and have appropriate experience to carry on their business. Short biographical details of the principals will be set out in the Supplement.
There is no income, capital gains or withholding tax in Bermuda or the Cayman Islands, however, investors are responsible for ensuring that their tax commitments are fulfilled in their country of domicile. Each of Bermuda and Cayman are on the Organization for Economic Cooperation and Development’s (OECD) “white” list of jurisdictions that substantially implement tax standards and each has signed various Tax Information Exchange Agreements which are bilateral agreements under which countries agree to cooperate in tax mattes through the exchange of information. The directors and shareholders of the Sub-fund Manager should obtain their own tax advice in relation to local tax law and regulation in the country in which it carries on its business.
No restrictions apply to the investors under the laws of Bermuda or Cayman. There is no limit on the investment amount for Sub-funds on either the Bermuda or Cayman Platforms. The Sub-fund Manager should take advice in respect to the legal and regulatory restrictions that may apply in the jurisdictions into which they wish to offer their shares for sale. Generally the offering will be structured as a private placement to qualifying investors in those countries.
Apex Fund Services, the Administrator, is responsible for money laundering compliance and this involves verification of the investor’s identity and source of funds. Any failure or delay in an investor in providing the required information can result in refusal of its subscription application.