government to ease restrictions for mutual funds registered locally.

A report to BIBA by chairman Michael Collins of the Collective Investment Schemes Committee said negotiations are underway with the authorities for the removal of the requirement that there be Bermuda management companies for Bermuda-registered mutual funds.

And current Bermuda laws require that a prospectus be refiled every year if they are circulated to more than 35 investors.

Mr. Collins of Argonaut Ltd. said in his report: "Our competitors do not have this requirement and in our view, re-filings are expensive and unnecessary unless there is a material change to the document such as to investment policy, change of custodian, etc.

"We are seeking assistance in this connection from the Ministry of Finance and from the BIBA Companies Act Amendments Committee (now the Legislative Change Committee).'' According to the update published in BIBA's annual report, Mr. Collins also believes Bermuda would be more competitive as a domicile for funds if new fund categories were introduced as per the Booth Report which is under review by the Bermuda Monetary Authority (BMA).

The proposed three formalised classes would be UK Class Funds, Funds which are under the supervision of the Code of Conduct and Institutional Class Funds.

He also noted that the BMA, in using its flexible powers, has occasionally waived the requirement that there be a Bermuda custodian for Bermuda registered mutual funds.

Mr. Collins reported: "Your committee, in order to maintain consistency, is trying to establish on what grounds the BMA have granted such dispensation.

"We are presently in discussions with the BMA to see if there is a way in which we can formalise the matter so that we can tell prospective clients what they have to do to be considered for such dispensation.''