Money Service Business Act 2016

Summary

This Act establishes Bermuda's comprehensive licensing and regulatory framework for money service businesses, replacing earlier provisions under the Bermuda Monetary Authority Act 1969 and the Money Service Business Regulations 2007 (which it revokes). It gives the Bermuda Monetary Authority (BMA) powers to license, supervise, discipline and investigate persons carrying on money service business activities, and sets minimum criteria for licensing.

• Scope of regulated activity: Covers money transmission services, cashing or guaranteeing cheques, issuing/selling/redeeming drafts, money orders or traveller's cheques, payment service business, and operating a bureau de change.
• Licensing requirement: No person may carry on money service business in or from Bermuda (or act as an agent for such a business) without a licence from the Authority, subject to any exemption order; contravention is a criminal offence.
• Application requirements: Applicants must submit a business plan, management arrangements, AML/ATF policies and procedures, other information the Authority requires, and pay a prescribed application fee; the Authority will only grant a licence if the Schedule 1 minimum criteria (fitness and propriety, integrity, corporate governance, prudent conduct, adequate insurance) are met.
• Ongoing conditions: Licensees may not hold client monies or other client assets, must prepare annual financial statements and appoint auditors, pay an annual licence fee, and have regard to any codes of practice issued by the Authority.
• Controller and ownership changes: Notification is required for new or increased shareholder control, and the Authority may object to new, increased or existing controllers.
• Disciplinary and enforcement powers: The Authority may impose civil penalties, issue public censures, make prohibition orders, seek injunctions, obtain information and documents, conduct investigations, restrict or revoke licences, and issue warning/decision notices, with rights of appeal to a tribunal.
• Fees under consequential amendments: Schedule 2 sets fees: application fee $2,266, grant of licence fee $5,150, and annual fee $5,150.

The Act also amends related AML/ATF legislation (Anti-Terrorism (Financial and Other Measures) Act 2004, Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing Supervision and Enforcement) Act 2008, and Proceeds of Crime Act 1997) to align the definition of money service business, and confirms it does not apply to institutions licensed under the Banks and Deposit Companies Act 1999. It came into operation on 31 January 2017 and has since been amended by 2017:38, 2018:51 and BR 89/2019.

Key obligations

• A person must not carry on money service business in or from Bermuda, or act as an agent for such a business, without holding a licence issued by the Authority
• Licence applicants must submit a business plan, management arrangements, AML/ATF policies and procedures, other required information, and pay the prescribed application fee
• Licensed undertakings must not hold client monies or other client assets as a condition of their licence
• Licensed undertakings must prepare annual financial statements and accounts and appoint auditors
• Licensed undertakings must pay an annual licence fee
• Licensed undertakings must have regard to any code of practice issued by the Authority in conducting their business
• Licensed undertakings must notify the Authority of a new or increased shareholder controller, and of changes of controller or officer
• Licensed undertakings must maintain insurance cover appropriate to the nature and scale of their operations
• Licensed undertakings must implement corporate governance policies and ensure the business is directed by at least two persons with appropriate non-executive oversight

Applies to

money service businesses, licensed undertakings, bureau de change operators, payment service businesses, shareholder controllers, directors, controllers and senior executives of licensed undertakings

Deadlines

• 31 January 2017: Operative date of the Money Service Business Act 2016
• 10 August 2018: Effective date of amendment to section 8(1) by 2018:51 s.13
• 6 August 2019: Effective date of insertion of Schedule 1 paragraph 2(5A) by BR 89/2019

Related documents

• This document amends Proceeds of Crime Act 1997
• This document amends Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing Supervision and Enforcement) Act 2008
• This document amends Anti-Terrorism (Financial and Other Measures) Act 2004
• This document amends Bermuda Monetary Authority Act 1969
• Consultation Paper - Proposed Payment Services Act (2025-08-29) repeals this document