The Bahamian "SMART" Fund (formally known as Specific
Mandate Alternative Regulatory Test Fund) represents a flexible yet
regulated investment fund product.
By way of background, there are no predefined regulatory
criteria for SMART Funds; instead, the Investment Funds
Act authorizes the Securities Commission of The Bahamas (the
"Commission") to establish the rules and requirements
applicable to each category of SMART Fund. Whilst seven SMART Fund
models have been authorized to date (with six of those models in
use), this approval structure facilitates the continued evolution
of new SMART Funds to meet market demand.
Two of the most commonly used models are (i) SFM Model 004 which
is limited to no more than five investors, where the annual audit
can be waived with the consent of all of the investors and a term
sheet is optional and (ii) SFM Model 002 which is limited to no
more than 10 investors (all of whom must be professional or
accredited investors), requires a
