Corporate Service Provider Business Amendment Act 2014

Summary

This Act amends the Corporate Service Provider Business Act 2012 to introduce a two-tier licensing structure (unlimited and limited licences), strengthen governance and prudential requirements for licensed corporate service providers, and make consequential changes to exchange control, partnership and beneficial ownership rules that reference corporate service providers.

• Licence classes: Applicants must specify whether they seek an unlimited licence (all corporate services) or a limited licence (all services except those under sections 2(2)(a) and 2(2)(c)(vii) of the principal Act).
• Licence conditions: The Bermuda Monetary Authority may impose conditions on the scope or manner of operating a corporate service provider business, and may vary or remove conditions on application.
• Corporate governance: Undertakings must implement corporate governance policies and processes appropriate to their nature, scale, complexity and risk profile, and ensure business is directed and overseen by an appropriate number of individuals and non-executive directors.
• Prudent conduct assessment: In assessing prudent conduct, the Authority will consider compliance with the Act, AML/CFT laws (Proceeds of Crime Act 1997, Anti-Terrorism (Financial and Other Measures) Act 2004, Proceeds of Crime (AML/ATF) Regulations 2008), codes of practice, and international sanctions.
• Insurance requirement: Undertakings must maintain insurance cover appropriate to the nature and scale of their operations to be considered as conducting business in a prudent manner.
• Beneficial ownership notification: Permit companies must notify the Controller within 14 days where a transfer of beneficial ownership causes a beneficial owner to reach a 10% or greater ownership threshold.
• Exchange control and partnership amendments: Exchange Control Regulations 1973, the Exempted Partnerships Act 1992 and the Limited Partnership Act 1883 are amended so that certain Controller permissions and statutory references only apply where the relevant corporate service provider holds an unlimited licence.

Section 4 (the beneficial ownership notification amendment) is deemed to have come into force on 31 December 2013; all other provisions came into operation on 30 June 2016.

Key obligations

• Applicants for a corporate service provider licence must state the class of licence (unlimited or limited) sought.
• Licensed undertakings must implement corporate governance policies and processes appropriate to their nature, scale, complexity and risk profile.
• Undertakings must ensure their business is effectively directed and overseen by an appropriate number of individuals and non-executive directors as the Authority considers appropriate.
• Undertakings must maintain insurance cover appropriate to the nature and scale of their operations.
• A permit company must inform the Controller within 14 days of a transfer of beneficial ownership that causes a beneficial owner to reach a 10% or greater ownership threshold.
• Corporate service providers relying on exemptions from Controller permission requirements under the Exchange Control Regulations, or referenced in the Exempted Partnerships Act 1992 and Limited Partnership Act 1883, must hold an unlimited licence to qualify.

Applies to

corporate service providers, permit companies, exempted partnerships, limited partnerships

Deadlines

• within 14 days: A permit company must inform the Controller of a beneficial ownership transfer that results in a beneficial owner reaching the 10% or greater ownership threshold.
• 31 December 2013: Section 4 of the Act (beneficial ownership notification amendment) is deemed to have come into operation.
• 30 June 2016: All remaining sections of the Act came into operation.

Related documents

• This document amends Corporate Service Provider Business Act 2012
• This document amends Exchange Control Regulations 1973