Trusts (Regulation of Trust Business) Act 2001

Summary

This is the Bermuda Monetary Authority's principal statute governing trust business in Bermuda. It sets up a licensing regime for persons carrying on trust business in or from within Bermuda, defines who counts as a controller, director or senior executive, and gives the Authority wide powers to authorise, supervise, discipline and investigate licensed trust undertakings.

Licensing: No person may carry on trust business in or from within Bermuda without holding an unlimited trust licence (companies) or a limited trust licence (partnerships and individuals), subject to exemption orders; unlicensed trust business is a criminal offence.
Physical presence: Licensed undertakings must maintain a physical presence in Bermuda and must be directed and managed from Bermuda, judged by factors such as where strategic decisions, board/management meetings and staff residences are located.
Ongoing conduct requirements: Licensees must have regard to codes of practice issued by the Authority, separate client funds, notify the Authority of changes of controller or officer, and notify new or increased shareholder control.
Accounts and audit: Licensees must prepare annual accounts, appoint auditors, ensure auditors report to and communicate certain matters with the Authority, and file prudential and other returns as required.
Disciplinary and enforcement powers: The Authority may restrict or revoke licences, impose civil penalties, issue public censures, make prohibition orders, seek injunctions, issue warning and decision notices, and publish information about enforcement action, with a right of appeal to a tribunal.
Information and investigation powers: The Authority may require licensees to produce documents and information, enter premises to obtain documents, and appoint investigators into suspected contraventions; obstruction of an investigation is an offence.
Restricted terminology: Use of the word 'trust' in a business name or description is restricted to licensed or otherwise authorised persons.

The Act also amends related Bermuda legislation (Bermuda Monetary Authority Act, Companies Act, Trustee Act, Taxes Management Act, anti-money laundering regulations and pensions legislation) to reflect the new licensing terminology, and includes minimum licensing criteria (integrity, skill, prudent conduct) in its First Schedule.

Key obligations

A person must not carry on trust business in or from within Bermuda unless licensed under the Act (unlimited or limited trust licence), on pain of criminal penalties.
Every licensed undertaking must maintain a physical presence in Bermuda and ensure its trust business is directed and managed from Bermuda.
Licensed undertakings must have regard to codes of practice issued by the Authority in conducting their business.
Licensees must separate client funds from their own funds.
Licensees must notify the Authority of any change of controller or officer.
Persons acquiring or increasing control over a licensed undertaking must notify the Authority of new or increased control.
Licensed undertakings must prepare annual accounts and appoint auditors, whose reports and communications must be provided to the Authority.
Licensees must produce documents, information and reports to the Authority on request and must not obstruct Authority investigations.
Only licensed or otherwise authorised persons may use the word 'trust' in connection with their business.
Licensed undertakings must pay the annual licence fee and register/display their licence as required.

Applies to

licensed trust undertakings, companies holding unlimited trust licences, partnerships and individuals holding limited trust licences, controllers and shareholder controllers of licensed undertakings, auditors and accountants of licensed undertakings

Deadlines

25 January 2002: Operative date on which the Trusts (Regulation of Trust Business) Act 2001 came into force.

Trusts (Regulation of Trust Business) Act 2001

Summary

Key obligations

Applies to

Deadlines

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