Business Bermuda Nexus July 2012

NEXUS THE BUSINESS BERMUDA

July

2012

In This Issue Message from the CEO Bermuda-canada relations fatca’s implications for bermuda banking customers College student networking evenings •

have the top resume

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impress in an interview

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build a network that lands a job

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network like a superstar

“Bermuda is also attractive as a result of its appropriate regulatory framework and financial stability, its well-established infrastructure and strong reputation as a center for international business and finance with a ready and easy access to the commercial reinsurance market based on the island.” p.4 “Bermuda has led the way as an innovative jurisdiction, demonstrating its cutting edge and entrepreneurial heritage with the continued development of new investment fund products” p.16

private trust companies and family Offices bermuda investment funds amendment Island life & new challenges

PROFESSIONAL COMMENTARY FROM BUSINESS BERMUDA

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BUSINESS |

Professional Commentary from Business Bermuda

CEO Message:

I hear, I know. I see, I remember. I do, I understand.

Confucius, the famous Chinese teacher, from the Spring and Autumn time of Chinese history once said, “I hear, I know. I see, I remember. I do, I understand. ” This phrase succinctly captures much of Business Bermuda’s efforts over the last several months and is indicative of our significant focus on further developing our reach in China, Hong Kong, and Singapore while we renewed our links to the United Kingdom and Europe through our Annual Financial Services Conference in London and support of the EuroHedge Summit in Paris. cheryl packwood CEO, business bermuda

One of the most fascinating and inspiring elements of Chinese culture is the way people interact and develop business relationships based on mutual understanding and respect. Key to Bermuda’s ability to forge successful business relationships in China is our ability to listen, learn, and understand that working together we can achieve great things for the Chinese and for Bermudians. This success will not come through short-term, short-sighted deals but a long-term view of the challenges and opportunities for all of us.

It is with that very view and understanding that from April 14 through April 20 Business Bermuda, in partnership with the Ministry of Business Development and Tourism, embarked on a business relationship building trip to Shanghai and Beijing, China. The trip, which was in development and planning for several years, built on an ongoing relationship with the China Council for the Promotion of International Trade since April 2011 in Hong Kong.

The Honorable Wayne Furbert, JP, MP, Minister of Business Development and Tourism and Travis Gilbert, Director of Business Development joined us on the trip. Christopher Buchan, Managing Director of Emerging Asset Management and Anthony D’Silva, Managing Director of Apex Fund Services also joined our delegation. Together we opened our ears, our eyes, and our minds so that we could begin to develop a full understanding of China and Chinese business through meetings with a number of groups including: •

The Chamber of International Commerce Shanghai

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Standard Chartered Bank

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Shanghai Foreign Investment Development Board

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The Shanghai Stock Exchange

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The Chinese Ministry of Finance and Commerce

In addition, the delegation hosted receptions in Shanghai and Beijing, which were attended by more than 80 Chinese business executives and government officials.

We returned from China inspired by the opportunities and looking forward to renewing our ties with our long-time partners and business colleagues in London for the Bermuda Annual Financial Services Conference and in Paris for the EuroHedge Summit. We were delighted to reconnect with our traditional business partners and continue to deliver the message on Bermuda’s many products and services, including everything from asset management to insurance/reinsurance, trusts, aircraft and shipping, and Islamic Finance. The London Conference and our efforts in Paris achieved those goals and also provided an opportunity to build new relationships and open doors to new business opportunities with a wide range of international businesses.

In May, we returned to Singapore and Hong Kong where we engaged in meetings with local business leaders before attending the Shorex Wealth Management Forum 2012 on May 22 and 23. Shorex is Asia’s leading event for private bankers, asset managers, and advisers to High Net-Worth Individuals (HNWIs). Hundreds of wealth management professionals gather each year to meet their peers and discuss the latest asset management and tax planning strategies for HNWIs. Minister Furbert and I made presentations on Bermuda’s strengths as an offshore financial center and the strong and developing business relationship between the two jurisdictions to this elite forum. We then led our delegation to Hong Kong for the Fifth Annual Bermuda Financial Services Reception, Hong Kong, on May 28, which was the penultimate leg of our Asian business development trip.

After a whirlwind of meetings, events, conferences, and media interviews in Shanghai, Beijing, Singapore, and Hong Kong, Business Bermuda concluded the 2012 Asia Business Development Drive on a high note at the 3rd Annual World Islamic Banking Conference: Asia Summit 2012 (WIBC Asia 2012) in Singapore from June 5-6, 2012.

This year, for the first time, we were invited to be a part of the WIBC Asia 2012 through exhibiting and the opportunity to speak. We were joined by P. Jeyaratnam, Business Bermuda’s

representative in Southeast Asia, Srikumar TE., Managing Director of Apex Funds Services Ltd. for Hong Kong and Singapore, and KUNG Whooi Phing, Director at Conyers Dill & Pearman in Singapore.

We must continue to keep our footprint out there and keep the Bermuda brand alive. We believe in the future of Bermuda, but a consistent approach and strategy is important to the success of our endeavors.

With over 500 industry leaders in attendance, there was an overwhelming interest in the opportunities available for Islamic finance clients in Bermuda, especially in the areas of Takaful and Re-Takaful in light of Bermuda’s strength as the number one Reinsurance jurisdiction in the world. As one of the few Islamic finance centers in the Western hemisphere, Bermuda’s unique position to expand the Islamic finance market, now valued at over $1.1 trillion, was cause for much excitement and interest.

While we were hard at work in Asia, Business Bermuda actively supported efforts to build and foster additional international business for our members including active support of the STEP Cayman Conference, which allowed our delegation to deliver the Bermuda story and build on the strength of our Trust business. In addition, we sponsored the 10th Annual Family Symposium at the Fairmont Southampton Princess hotel in Bermuda, which attracted an international mix of Family Offices, Lawyers, and Asset Managers. The conference was not only profitable in addressing the issues concerning High Net Worth families, but it introduced many to Bermuda as a jurisdiction in which to do business and as an idyllic vacation destination.

Additional Notes Business Bermuda’s efforts are being recognized and honored including: •

Business Bermuda has been named “Best Offshore FDI Facilities, Americas” 2012 by the New Economy

•

I am honored and humbled to have been named as an Industry Leader in the MENA Fund Manager Magazine Service Provider Power 50.

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I am also delighted to announce that, as a result

of Business Bermuda’s concerted efforts, Bermuda has been named the “Best Global Hedge Funds and Captive Insurance Destination 2012” by the Global Banking and Finance Magazine’s 2012 awards.

•

As a result of Business Bermuda’s work and determination, Bermuda also has been nominated for the “Offshore Centre of the Year” in the Euromoney Awards of Excellence 2012.

We appreciate the opportunity to provide an update on Business Bermuda’s activities this past spring. We are focused on building the Bermuda brand, establishing new relationships, and opening doors of opportunity for our Members and the Bermuda Government. In so doing, we are trying to deliver on the investment and resources of Government that create a welcoming environment allowing our service providers and international business partners to further grow and develop.

In the coming months, look for Business Bermuda to do even more to build the Bermuda brand, and please join us at our upcoming events in the fall and winter (see page 13).

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Bermuda-Canada Relations BERMUDA’S CLOSER TIES WITH CANADA OFFER CANADIAN ORGANIZATIONS OPPORTUNITIES TO REVISIT THEIR TAX STRUCTURE Cheryl Packwood Business bermuda steve woodward KPMG

Following developments to Bermuda-Canada relations during 2011, Bermuda has seen a significant surge in business opportunities with Canada.

In December 2011, the Toronto stock exchange group (“TMX”) purchased a 16% interest in the Bermuda stock exchange (“BSX”) and Tom Kloet, CEO of TMX, joined the BSX board.

In addition, Canada and Bermuda signed a Tax Information Exchange Agreement (“TIEA”) in June 2010 that became effective on July 1, 2011, and the BSX was added to the list of approved stock exchanges in Canada. Both achievements serve to make Bermuda a more attractive investment destination for Canadian capital and expand the opportunities for Canadian companies to use Bermudian subsidiaries to structure their international operations.

These developments, including the TIEA, increase Bermuda’s attraction for Canadian organizations looking for an offshore captive insurance vehicle and also offer Canadian businesses trading internationally the opportunity of using a Bermuda exempted company to create a tax-efficient platform for their business needs, such as international sales, servicing or financing, under a tax-efficient platform.

The United States has historically been the biggest single source of captive insurance business for Bermuda, accounting for over 60% of the island’s insurance formations. However, Canadian organizations with foreign operations, or looking to establish captives as part of their overall risk management approach, will most likely now see Bermuda as their jurisdiction of choice given the Island’s long history as the leading offshore domicile for captive insurance companies.

In recent months Bermuda has seen a number of high profile re-domestications of captives from other offshore captive domiciles, which is a testament to Bermuda’s opportunity arising from the TIEA. Bermuda is also attractive as a result of its appropriate regulatory framework and financial stability, its well-established infrastructure and strong reputation as a center for international business and finance with a ready and easy access to the commercial reinsurance market based on the island.

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WHAT IS A TIEA? TIEAs set out a framework for exchanging information between countries to help administer and enforce tax laws.

These agreements are typically based on the organization for economic Cooperation and Development (“OECD”) internationally agreed standard and are seen as an important tool to prevent tax evasion in circumstances where there is no comprehensive tax treaty in place between the countries concerned.

While the TIEA’s primary purpose is to provide for full exchange of information on criminal and civil tax matters, in the case of the Bermuda-Canada TIEA the implications are wider reaching. In March 2007 Canada passed tax legislation effectively enabling Canadian foreign affiliates resident and carrying on active business in Bermuda to be eligible for “exempt surplus” treatment. Now that the TIEA between Canada and Bermuda has entered into force, foreign affiliates with active or deemed active business income in Bermuda are able to repatriate their profits to Canada without further Canadian tax.

Such benefits have previously been conferred only to countries with a double-tax treaty with Canada such as Barbados, Ireland, and Cyprus. The TIEA therefore establishes more of a level playing field for Bermuda in comparison to these other jurisdictions.

BERMUDA’S ADVANTAGES As a result of the closer ties, we expect there to be an influx of Canadian companies looking to use Bermuda captives and exempted companies as part of their risk management and corporate strategy for their business risks and international operations.

Additionally, Bermuda has the advantage of a zero corporate income tax rate and no capital gains tax or withholding tax.

Thus, by establishing a Bermuda subsidiary, a Canadian corporation can benefit from significant tax savings while at the same time benefiting from being established in a highly respected international financial centre with an advanced business infrastructure.

The presence of commercial insurance and reinsurance companies in Bermuda allows captive owners and operators to access open-market underwriting capacity not found in any other captive domiciles.

THE BSX A “DESIGNATED STOCK EXCHANGE” The naming of the BSX as a “designated stock exchange” by the Canadian Federal Minister of Finance allows Canadians to hold investments listed on the BSX in their tax deferred retirement savings plans or tax free savings plans and increases Canadian’s options when expanding investments.

Most importantly, the naming of the BSX as a designated stock exchange shows that the BSX is known to be a well-governed, regulated, and transparent market, signaling the Canadian Minister of Finance’s faith in Bermuda’s financial system and boding well for continued trade and investment between Canada and Bermuda.

WHY ESTABLISH A CAPTIVE INSURANCE COMPANY NOW? As a result of the fall-out from the recent financial crisis, cost control and effective risk management is now higher on the agenda of most organizations than it has been for some considerable time. Captives can help reduce the cost of insurance programs by mitigating or avoiding commercial insurers’ administrative overheads and recapturing underwriting profits and investment income that would have otherwise gone to the commercial marketplace. In addition, the commercial market has experienced a prolonged period of soft market conditions and rates are expected to gradually harden going forward, especially as a result of the significant catastrophe losses in 2011. Captives can smooth these market cycles into a predictable premium spend for the parent and assist with cash flows. Other potential savings can be made by using a captive to access the reinsurance markets, which operate on a lower cost structure than direct insurers.

As well as tax planning advantages, additional financial benefits of using captives include allowing the parent company to earn investment income on unpaid loss reserves and enabling a captive owner to benefit from its own individual loss experience rather than pay higher premiums based on industry-wide losses. A well run captive can also create a focal point for enhanced risk management and claims control thus making significant further contributions to the bottom line.

Captives help to provide a greater degree of flexibility and control over the risk management function by allowing programs to be designed in response to specific coverage, premium, and retention requirements. These programs can be designed to offer individual operating units of a company the coverage and deductibles they require while the overall control and design of the insurance program is maintained at the corporate level. Thus, captives can help centralize the financial and administrative operation of a corporate insurance programme.

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FATCA’s implications for Bermuda banking customers david ash kpmg

The U.S. Congress estimates that the Internal Revenue Service (IRS) is losing $100 billion of revenue each year due to offshore tax abuses perpetrated by U.S. persons.

As a result, the Foreign Account Tax Compliance Act (FATCA) was enacted into law in March 2010 to assist the IRS in combating this perceived tax abuse. FATCA requires a 30% withholding tax be imposed on U.S. source income received by Foreign Financial Institutions (FFIs) unless they enter into an agreement with the IRS, requiring them to report all of their U.S. customers.

From July 1, 2013, banks will be responsible for identifying all new U.S. customer accounts and recalcitrant (noncompliant) customers. By June 30, 2014, banks are required to have completed an enhanced review and remediation of their existing high-value customer accounts (accounts with over $1 million balance) and, by June 30, 2015, they are required to have completed a second-stage review and remediation of their low-value customer accounts (accounts with over $50,000 balance).

Bermudian banking customers have asked how FATCA will affect them here in Bermuda – the short answer is that most Bermudians are not U.S. persons and, in most cases, FATCA will have no impact upon them. However, if a Bermudian is opening a new account (or has an existing account) and there is any indication that they are U.S. persons from the information they provide, the bank will be required to ask them to provide additional information or documentation to confirm whether they are a U.S. person or not.

FATCA Notice 2011-34 listed the following six “U.S. indicia” that financial institutions must use to identify whether their customers are U.S. persons: 1.

U.S. citizenship or lawful permanent resident (green card) status;

2.

A U.S. birthplace;

3.

A U.S. residence address or a U.S. correspondence address (including a U.S. P.O. box);

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4.

Standing instructions to transfer funds to an account maintained in the United States, or directions regularly received from a U.S. address;

5.

An “in care of” address or a “hold mail” address that is the sole address with respect to the client; or

6.

A power of attorney or signatory authority granted to a person with a U.S. address.

Displaying one or more of the above indicia does not mean that the account holder is a U.S. person, but it does mean that the financial institution must give the account holder closer scrutiny as part of its compliance with FATCA and confirm whether they are a U.S. person or not.

Many Bermudians may exhibit “U.S. indicia”, as it was common for Bermudians to have been born in the U.S.A. over the past few decades. Furthermore, many Bermudians may have their bank account linked to a U.S. correspondence address in order to operate their iTunes and Netflix accounts, or for making online U.S. purchases. This means that Bermudian-banking customers are likely to feel the full effects of FATCA compliance.

When a bank in Bermuda is undertaking a review of its existing customer base it will firstly identify the customers that require additional scrutiny, given the U.S. indicia they display. The bank may then be required to remediate the information they hold on the customer by making contact with them and asking them to provide additional documentation that will either confirm or deny they are a U.S. person.

For those customers who choose not to provide additional documentation when requested the bank may refuse their new business, or may close their existing accounts. Otherwise, the customer will be deemed recalcitrant and the bank will be required to withhold 30% on all U.S. source payments that they receive, sending this money to the IRS. The full impact of FATCA on banking customers in Bermuda has yet to emerge, and Bermudians should expect to receive increased requests for information and documentation when opening bank accounts or when transacting with their banks on an ongoing basis. Banks, as well as other Bermudian FFIs (including trusts, funds and, in limited cases, insurance companies), have a long and challenging road ahead to become FATCA compliant and are not looking forward to the disruption this process will have on their business model, operations, and, most importantly, their customers.

business bermuda presents: College student networking evenings

Why host the College Student Networking Evenings?

The College Student Networking Evenings (CSNE) are designed to give students the opportunity to learn essential job seeking skills, network with industry professionals, ask questions, seek guidance, and find out what potential employers are looking for. Networking is all about meeting people who can help you and also for you to help others when you can.

Many students often are unfamiliar with networking, what employers are looking for, or how to leverage the college experience to land a ‘dream job.’ For the past 13 years Business Bermuda has hosted the Annual College Student Networking Event with 2011 being the largest to date, boasting over 600 participants. This year, Business Bermuda announced a major change to the event. The 2012 College Student Networking Evenings is an exciting new endeavor giving students the tools needed to successfully navigate the complicated world of professional networking.

The 2012 College Student Networking Evenings are a series of preparatory seminars in July culminating in an exclusive networking reception in August. Each seminar

provides the opportunity for all students aged 18 to 25 to build a base of skills necessary to hold their own at a professional networking event. Traditionally, the CSNE has provided students with the opportunity to spend a short amount of time with each professional. This year, students and professionals will have an extended amount of time to network and establish meaningful relationships.

Cheryl Packwood, CEO of Business Bermuda, said, “This year we want students to walk away from the event with in-depth understanding and networking experience. By preparing students through a series of seminars before the event and creating an intimate networking reception, we hope to provide a foundation followed up by real-life networking experience.”

“Today’s business environment values the ability to build relationships with a variety of professionals who can provide a recommendation, interview, or even a direct job offer.

C-Suite Executives, Managing Directors, and other hiring managers will be in attendance to give students personal advice on building the right type of network to achieve their professional goals,” she continued.

We sincerely hope that the 2012 College Student Networking Evenings will motivate students to push to achieve their utmost potential!

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COLLEGE STUDENT NETWORKING EVENINGS

SUmmER SEmINARS Thursday, July 12, 2012 - 5:30 - 7:30pm RESUmE WRITING Ad Will go here

Derek Smith, Department of Labour & Training

Thursday, July 19, 2012 - 5:30 - 7:30pm INTERVIEW TEChNIqUES Keith Smzierek, Expertise Limited

Wednesday, July 25, 2012 - 5:30 - 7:30pm NETWORKING SKILLS Jenny Smatt Adkins, Ontru Ltd.

WhERE:

REGISTER TODAy:

Deliverance Room, 4th Floor Argus Building 14 Wesley Street hamilton

www.csne.bm Email csne@businessbermuda.org

Or call Carmen on 292.0632

ExCLUSIVE

NETWORKING RECEpTION: Attend two out of three seminars to secure an invitation to an exclusive networking reception with professionals on August 8.

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A CSNE MINI-GUIDE

How to…

Have the Top Resume The Recruitment Division of Expertise Limited reviews hundreds of résumés each week. Some are good, but most are not.

Here are some tips to create a shining résumé.

What makes a resume bad?

What makes a resume good?

Too Long Anything beyond two pages and it becomes too much to take in. One page should suffice for new graduates and those with relatively little work experience. The candidate needs to highlight only the experience that is relevant to the job or career they are seeking.

Written for a Specific Purpose The best résumés are those that emphasize your qualifications and experience in relation to the role you are seeking. The easier you make it for the employer to identify why you are a good fit for the role, the better the chance that you will be selected for interview. So avoid sending the same résumé to every employer. Instead, customise it to the job for which you are applying.

Lack of Specific Dates Employers know that it is easy to hide a gap in work history or education by publishing the year but not the month. For example, “2005 - 2008” could mean that you took a whole year off in between jobs – for instance terminating on 2 January 2005 and commencing employment on 28 December 2005.

Including the month and year makes the job of employers much easier.

Errors and Poor Presentation At the time the employer receives your résumé, it is often the only example of your work that they have seen. If it contains spelling mistakes, typographical errors, or poor grammar, it makes a very bad impression. Actually, more often than not, it is fatal. What employer wants to hire someone who makes errors? So make sure your résumé is error-free and formatted consistently.

Too Much Self-praise As my grandmother used to say: “Self praise is no recommendation”! It’s fine to refer to yourself as a “self starter” or “results orientated”, but be careful not to go over the top. Employers are unlikely to take your word for it because they know that you will be biased. Résumés that contain large sections listing lots of your personal virtues take up valuable space that you could better use to demonstrate that you have these qualities (i.e. work experience and/or education).

Clear and Concise Job History What you have done in the past, and how well you have done it, is of critical importance to an employer. So if you have experience relevant to the job for which you are applying, emphasise it. Specifically highlight relevant accomplishments.

Less relevant or irrelevant experience can be minimised, but be careful not to discard it altogether. Gaps on résumés are not a good sign for employers.

Full Disclosure of Educational Qualifications Be sure to specify details of any professional designations, degrees, diplomas and/or certifications if you have them. If you don’t, be sure to highlight your highest level of education achieved. If you attended but did not complete a programme, be careful not to present this information in such a way that makes you look like you did. Grade point averages, majors and even relevant courses should be listed if they are relevant or help demonstrate that you have achieved success. Be clear with all commencement and completion dates.

The Ultimate resume tip: be honest Stretching the truth will only get you into trouble in the interview or when your references are checked.

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How to…

Impress in an interview The Employment Consultants at Expertise Limited interview dozens of candidates each week. The most important thing that you need to know about interviewing is that employers are simply trying to determine the degree to which you are able and willing to do the job. All of your preparation for an interview should be guided by this principle.

Can you do the job?

How to dress?

Expect employers to ask you questions about your track record. Your past accomplishments are of great importance to an employer. If you have a proven track record of success, employers are likely to bet that you will be a success in the future. So examine your past history relative to the job specifications. Ask yourself ‘what experience do I have that demonstrates that I can do the job they are looking to fill’. If you are short on relevant experience and examples of success, resist the temptation to exaggerate or fib. It’s better to admit that you lack experience than to get caught up in stretching the truth.

Dress appropriately. One determinant of appropriateness is how people ordinarily dress at the organisation that you are looking to join. If in doubt, err on the side of more conservative business attire. An employer will use the interview to assess your deportment relative to the job for which you are being recruited.

When to arrive?

Be on time, or perhaps a little early, but never late. If you are late, be prepared to supply a good reason. Anything less and you will not get the job.

Will you do the job?

Convincing an employer that you are capable is only half of what you need to do at an interview. Your other goal is to demonstrate that you are willing to do the job. Your motives are important. Employers want to employ people who are keen and interested. So be prepared to explain why you want the job. Your level of interest in the employer will be evident by how well you demonstrate your research of their organisation.

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The Ultimate Interview Tip: Be Yourself If you make yourself out to be someone you are not, you are doomed. If you succeed in fooling everyone at interview and get the job, you will be found out soon after you start work. That will lead to dismissal whilst on probation, which will make your next interview even tougher.

Build a network that lands a job Networking can be a powerful tool and could lead you to a successful career in your chosen field.

Remember that you are not here at the event to meet your future boss (although you never know). But you might meet someone who can introduce you to someone who might know a company looking for a bright graduate or who is a personal friend of that elusive future boss. So be open to speaking to all people, even if they are not in your selected field. You might also speak to someone who tells you about a career you’ve never even dreamt of considering, but makes it sound like something that would fit you perfectly.

Of course, if you are set on working for a particular company then you should do your homework so that you can ask some relevant questions that really show off your knowledge of the company or sector. And don’t forget to print off a number of copies of your résumé to give out to prospective employers and keep them in a folder to keep them neat.

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Network like a superstar 10 great networking tips that could land you your dream job.

1. First Impressions Count Even before you’ve uttered a word, the way you look will say more to people about who you are than any initial greeting.

So, be neat, dress well, polish your shoes and smile!

2. Your Opening Line This is a business setting, so start with something appropriate, such as “It’s a pleasure to meet you” and not “Hey, what’s up?”

3. Eye Contact & Handshake The handshake. Firstly, look the person you are meeting in the eye, and offer them your hand. Practice your handshake before you come to the event; it should be firm, but nobody likes a hand crusher so make sure the balance is right.

4. And Your Name is?

Remember their name and use it in the conversation. People love to hear their own name spoken.

5. Body language You want people to feel comfortable when they are talking to you. So, stand up straight, maintain good eye contact, and pay close attention to what they say.

6. Be courteous and Speak in a Clear, Polite Tone 7. Be Ready to Participate in the Conversation If you ask a question, you should be prepared for a response such as “And how about you?”

8. Pay Attention to What’s Going On If your eyes glaze over and you’re not engaged in what’s going on, people will not want to have anything to do with you. So, concentrate on what they’re talking about.

9. Select the Right Things to Say Keep it professional and formal.

10. Keep the Conversation Balanced On the one hand, you do not want the other person to have to do all the talking; on the other hand, it’s impolite for you do monopolise the conversation. So, allow the other person (people) to talk, and then you ‘chime in’ with a contribution.

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INTERNATIONAL CALENDAR of events September 2012 September 11 - 12 [Chicago, USA] Captive Live USA

September 27 - 28 [Panama City, Panama] STEP Latin America

October 2012 October 4 [Toronto, Canada] 4th Annual Bermuda Briefing

October 16 - 17 [Hong Kong, China] STEP Asia

November 2012 November 13 - 14 [Luxembourg] European Captive Forum

November 29 [New York, USA]

Bermuda Financial Services Conference

DECEMBER 2012 December 9 -11 [Manama, Bahrain] World Islamic Banking Conference: Bahrain

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LOCAL calendar of events College Student Networking Evenings and Reception July 12 [Argus Building] Resume writing

July 19 [Argus Building] Interview techniques

July 25 [Argus Building] Networking skills

August 8th

Exclusive networking event (by invitation only)

Bermuda Corporate Games October 25 -28 [Multiple Venues | Bermuda]

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PRIVATE TRUST COMPANIES AND FAMILY OFFICES

Randall Krebs Meritus Trust Company Limited

Families create Private Trust Companies for many of the same reasons they decide to create Family Offices.

Accordingly, there is a strong motivation to integrate the two structures.

Some of the reasons for creation of a family office or a private trust company include: •

Greater control

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Improved efficiency

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Increased family involvement

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Cost savings

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Empowerment of children

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Improved confidentiality

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Promote family unity

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Dissatisfaction with alternatives

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Succession and estate planning

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Integration with operating, investment,

and holding companies

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Consolidation of investments

A number of the other jurisdictions require a licence, an application for an exemption from licensing, or the use of a local trust company. The Bermuda process does not; accordingly, creation of PTCs in Bermuda is inexpensive, quick, efficient, and easy.

A Bermuda PTC is easy to integrate into an existing family office, since a Bermuda PTC does not require any significant connection with Bermuda. In many cases the PTC will simply have a Bermuda registered representative and company secretary. None of the shareholders, directors, or officers need to be resident in Bermuda. There is no requirement that the Bermuda PTC have trustee services provided by a local licensed trustee.

Bermuda has been forming PTCs for decades. We have considerable experience in the formation and administration of PTC structures. Formation costs in Bermuda are reasonable, in particular, the PTC can be created with nominal capitalization of $1, annual government fees are $1995, and the PTC can be created as a guarantee company thereby eliminating the cost of shareholder structures.

Bermuda has ‘know your client’ requirements and accordingly Bermuda professionals assisting in the formation or administration of the PTC will be required to gather the same sort of information that would be required in other reputable jurisdictions.

What is a Private Trust Company: In very simple terms, a Private Trust Company (PTC) is the family’s very own trust company. In Bermuda a PTC is simply a company which is restricted to acting as trustee for the family’s trusts. No license or exemption application is required.

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Bermuda Investment Funds Amendment Act facilitates and attracts Japanese investment in Bermuda Funds Elizabeth Denman conyers dill & pearman

Bermuda Ministry of Business Development and Tourism issues order designed to allow Bermuda domiciled funds to be marketed to the Japanese public.

Bermuda has led the way as an innovative jurisdiction, demonstrating its cutting edge and entrepreneurial heritage with the continued development of new investment fund products for use by its international clientele. This tradition continues with the introduction of regulatory rules specifically aimed at facilitating and attracting investment by Japanese retail investors into Bermuda domiciled funds.

On 18 December 2011, Bermuda’s Investment Funds Act, 2006 (the “Act”), the legislation which provides the regulatory framework for the creation and operation of investment funds in Bermuda, was amended to create a new class of investment fund to be known as the “Specified Jurisdiction Fund”. This new class was created to allow the Ministry of Business Development and Tourism, in conjunction with the Bermuda Monetary Authority (“BMA”) and industry, to develop and issue “orders” which specifically recognize and complement the regulatory requirements of foreign financial markets in which securities of a Bermuda domiciled fund will be marketed.

Through this co-operative approach, foreign promoters, distributors and fund sponsors who use Bermuda domiciled funds can specifically tailor their products to fit the specific regulatory requirements of their target markets in a highly effective way.

On 8 June 2012, the Ministry of Business Development and Tourism, acting on the advice of the BMA, issued its first order under the amended Act targeting the Japanese retail market. The order, entitled the “Investment Funds (Specified Jurisdiction Fund) (Japan) Order 2012” (the “Order”) together with the “Investment Funds (Specified Jurisdiction Fund) Japan Rules 2012” (the “Rules”) (made by the BMA) are designed to permit Bermuda domiciled funds established pursuant to the Order to be marketed to the Japanese public (each a “Japan Fund”).

Bermuda investment funds (and in particular, Bermuda unit trusts) have for many years been eligible for offer in Japan.

However, under Article 15 of the Fair Business Practice Rule

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#4 (Regulations Concerning Foreign Securities Transactions) of the Japanese Securities Dealers Association (the “JSDA Regulations”) currently in force, Japanese investment dealers may only solicit customers (excluding Qualified Institutional Investors as defined in the JSDA Regulations) to subscribe to securities of any foreign investment trust that is established in a jurisdiction, the laws and regulations and disclosure system of which are “well-provided”. While the Japanese Securities Dealer Association (the “JSDA”) has never objected to the distribution of Bermuda domiciled funds in Japan, the rather vague standards for foreign regulatory regimes set out in the JSDA Regulations created some uncertainty in the industry and resulted in some distributors and promoters shying away from using funds organized in offshore jurisdictions.

The Order has been specifically crafted to ensure that the rules applicable to Japanese Funds domiciled in Bermuda will meet the requirements of the JSDA Regulations. This will result in Japanese distributors and promoters having a greater degree of certainty and comfort in offering securities of a Japan Fund to retail clients in Japan thus making Bermuda an even more attractive jurisdiction to the Japanese retail market.

“On 18 December 2011, Bermuda’s Investment Funds Act, 2006 (the “Act”), the legislation which provides the regulatory framework for the creation and operation of investment funds in Bermuda, was amended to create a new class of investment fund to be known as the “Specified Jurisdiction Fund”.

This new class was created to allow the Ministry of Business Development and Tourism, in conjunction with the Bermuda Monetary Authority (“BMA”) and industry, to develop and issue “orders” which specifically recognize and complement the regulatory requirements of foreign financial markets in which securities of a Bermuda domiciled fund will be marketed.”

The Japan Fund will be regulated by the BMA. In addition to the requirements set out generally for investment funds authorized pursuant to the Act, the BMA will require additional information, governance and disclosure with respect to a Japan Fund. Key information includes: 1.

Both the constitutional document and offering document of a Japan Fund must contain prescribed information including the terms upon which the securities of the Japan Fund are to be issued, the rights and restrictions attached to such securities, their method of valuation, and full details on how dealing in the securities can be affected.

2.

The Rules also specifically provide for the dissemination of information to investors concerning the Japan Fund including the publication of prices, net asset values and the delivery to investors of the Japan Fund’s annual reports and audited financial statements within a prescribed period. Additionally, regular activity reports concerning the Japan Fund and its operations are required to be filed with the BMA.

3.

The specific duties, responsibilities, and roles of each of the Japan Fund’s service providers are also clearly articulated and include a requirement that the Japan Fund appoint

an administrator, custodian, auditor, and investment manager approved by the BMA.

4.

The manner in which both the custodian and investment manager deal with the assets of the Japan Fund are also prescribed and include a requirement that the investment manager deposit with or to the order of the Japan Fund’s custodian all certificates and documents of title to investments. The investment manager must also establish and monitor the custodian’s procedures for dealing with the Japan Fund’s investments. Certain investment restrictions relating to a Japan Fund’s borrowing, selling of units short, and acquisition of securities of other entities and other investment management functions are also prescribed.

5.

The Japan Fund is also required to seek the BMA’s approval to material changes and its service providers are required to report to the BMA if they become aware that the assets of the Japan Fund have not been invested in accordance with the Japan Fund’s investment objectives and restrictions.

Through these clearly articulated rules, the JSDA and the Japanese market generally will continue to be confident that Bermuda offers a highly effective and nimble regulatory system for investment funds. This will no doubt result in significant growth and development in Bermuda’s investment funds industry.

This article is not intended to be a substitute for legal advice or a legal opinion. It deals in broad terms only and is intended to merely provide a brief overview and give general information.

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ISLAND LIFE & NEW CHALLENGES Lure Fortune 500 Executive to Bermuda Walter M. Higgins III Ascendant Group

After nearly five years enjoying retirement from his Reno, Nevada home base, Walter M. Higgins III has been lured back into the corporate world to become President and Chief Executive Officer of Bermuda’s Ascendant Group Limited. He took up the post on June 1, 2012.

“When the opportunity to join Ascendant Group was presented to me early this spring, I was intrigued,” Mr. Higgins said. “I have been coming to Bermuda regularly for the past 15 years as a Director of AEGIS Insurance Services, a mutual insurance company that serves the utility and related energy industry. As a result, my wife, Jacqueline, and I have grown to appreciate the wonderful lifestyle that Bermuda offers including golf, boating, breathtaking beaches, fine dining, and proximity to the U.S. East Coast where we have family.”

He continued, “Perhaps more importantly, during my interviews with Ascendant Group’s Board of Directors, they painted the picture of a company that is in the early stages of maturing into a diversified organization and, as such, is facing some complex challenges. That appealed to me because I enjoy a challenge. For me, every day at work is fun, and it always has been. I genuinely like people and unequivocally love what I do. I am delighted to be involved with Ascendant Group.”

“I am pleased to be working with some very dedicated people at Ascendant Group, and I look forward to doing my part to help the organization, and the Island, successfully navigate toward a bright future” Mr. Higgins has committed to spend three years in Bermuda, helping to guide Ascendant Group toward a secure, productive future amidst changing regulation, growing competition, and global economic downturn. He brings to the job a lifetime of experience both in the U.S. Navy, as an Annapolis graduate and having spent more than two decades in the Naval Reserve, and in the U.S. energy utilities industry, including both corporate and government positions. Mr. Higgins retired in 2007 as Chairman, President & CEO of Sierra Pacific Resources (now NV Energy), the electric and gas utility company serving most of Nevada and part of California; after retirement from employment, he remained non-executive

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Chairman of the Board until 2008. He also remains a Director of South Jersey Industries, an energy services holding company with utility and non-utility operations .

Mr. Higgins’ extensive background is an asset to Ascendant Group, a publicly traded investment holding company that focuses on providing energy and infrastructure services through its subsidiaries: Bermuda Electric Light Company, Bermuda Gas & Utility Company, Air Care, BELCO Properties, inVenture, iFM, iEPC, PureNERGY Renewables and Sigma Corporate Services. Today, Ascendant Group’s companies face many of the issues that U.S. companies have dealt with, and Mr. Higgins has successfully maneuvered for years.

Mr. Higgins said, “Thanks to my years on AEGIS’ Board of Directors, I am somewhat knowledgeable that doing business in Bermuda is not exactly the same as doing business in the United States. The Bermuda community has a rich and distinctive culture, and the Island’s small size and isolation in the Atlantic Ocean pose some unique challenges.”

He added, “From my perspective, and that of Ascendant Group’s Directors and management team, our company’s future is directly linked to that of Bermuda. We are confident that our group and the Island both have the capacity for longterm growth, stability, and prosperity. We are fully committed to working in partnership with Bermuda’s Government and other organizations to ensure that the Island continues to offer a high standard of living for generations to come.”

Like other organizations, Ascendant Group faces a new era of competition, innovation, and rapid change. “Business as usual” is a phrase no longer heard at the company. Instead, Ascendant Group is taking a constructive, dynamic approach to contributing to Bermuda’s reputation as a sophisticated jurisdiction with a sound infrastructure. The company is also focused on fulfilling its commitments to stakeholders, including customers, shareholders, employees, and retirees and the Bermuda community at large.

“I am pleased to be working with some very dedicated people at Ascendant Group, and I look forward to doing my part to help the organization, and the Island, successfully navigate toward a bright future,” said Mr. Higgins.

For information about Ascendant Group Limited, please visit www.ascendantgroup.bm. For information about shares, visit the Bermuda Stock Exchange www.bsx.com.

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Looking toward the future Ascendant Group Limited and its operating companies take a positive, forward-looking approach to business. We are confident in Bermuda’s future as a vibrant, attractive destination for travellers and domicile for international businesses. We are committed to playing a vital role in the Island’s progress, which includes helping to preserve the precious natural environment. Ascendant Group is proud to have partnered with Government on the long-term restoration of Nonsuch Island, Bermuda’s “living museum”, which is home to numerous endangered species. We have done so to ensure that future generations will have the opportunity to appreciate that which makes Bermuda unique.

For more about us, please visit ascendantgroup.bm.

Subsidiaries: Bermuda Electric Light Company, Bermuda Gas & Utility Company, PureNERGY Renewables, Sigma Corporate Services Company, InVenture Limited, iFM, iEPC, Air Care and BELCO Properties.

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BUSINESS BERMUDA CORDIALLY INVITES YOU TO OUR 4TH ANNUAL

BERMUDA BRIEFING TORONTO, ON, CANADA

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34F, FIRST CANADIAN PLACE | OCTOBER 4, 2012 | 2:00 PM

For more information and to register, contact: Sarah Barham, sarahb@isipublications.com