Money Service Business Act 2016

Summary

This is a draft Bermuda bill that would create a standalone licensing and supervision regime for money service businesses, replacing the existing money service business provisions in the Bermuda Monetary Authority Act 1969. It sets out licensing requirements, ongoing obligations for licensees, and enforcement, appeal and information-sharing powers for the Bermuda Monetary Authority (the Authority).

• Scope: Applies to persons carrying on money transmission services, cheque cashing and guaranteeing, issuing/selling/redeeming drafts, money orders or traveller's cheques, payment service business, and bureau de change activities in or from within Bermuda.
• Licensing: No person may carry on money service business without a licence from the Authority (unless exempted); applications must include a business plan, management arrangements, AML/ATF policies and procedures, and an application fee.
• Ongoing duties: Licensees must prepare annual financial statements, appoint auditors, notify the Authority of changes in controllers or officers, have regard to any codes of practice issued by the Authority, and comply with minimum licensing criteria (fit and proper persons, board composition, prudent conduct).
• Enforcement powers: The Authority may restrict, revoke or petition to wind up a licensee, impose civil penalties, issue public censures and prohibition orders, and exercise investigation, entry and document-production powers, subject to rights of appeal to a tribunal.
• Transitional relief: Persons already carrying on money service business when the Act commences may continue without a licence for 12 months, during which they must apply for a licence.
• Consequential changes: Schedule 2 would repeal the money service business provisions in the Bermuda Monetary Authority Act 1969 and move related fee provisions under the new Act.

As a draft bill, this document is not yet in force; it reflects proposed obligations that would take effect on a commencement date to be appointed by the Minister, with different provisions potentially commencing on different days.

Key obligations

• A person must not carry on money service business in or from Bermuda without a licence issued by the Authority, unless exempted.
• Licence applicants must submit a business plan, management arrangements, AML/ATF compliance policies and procedures, and pay the prescribed application fee.
• Licensed undertakings must prepare annual financial statements and appoint auditors, who must communicate certain matters to the Authority.
• Licensed undertakings must have regard to any code of practice issued by the Authority in conducting their business.
• Licensees must notify the Authority of any change of controller or officer.
• Shareholders acquiring new or increased control of a licensee must notify the Authority.
• Persons already carrying on money service business at commencement must apply for a licence within 12 months of commencement to continue operating.
• Persons must not use the term 'Money Service Business' unless licensed or exempted.
• The Authority must publish a statement of principles as soon as practicable after the Act comes into force and publish an annual report on its activities under the Act.

Applies to

money service businesses, bureau de change operators, cheque cashing and guaranteeing businesses, issuers/sellers of drafts, money orders or traveller's cheques, payment service businesses, licensees, controllers and shareholder controllers of licensees, auditors of licensed undertakings

Deadlines

• 12 months after commencement of the Act: Persons already carrying on money service business without a licence must apply for a licence under the transitional provision (clause 69) within this period.
• as soon as practicable after coming into force of the Act: The Authority must publish its statement of principles.
• as soon as practicable after the end of each financial year: The Authority must publish an annual report on its activities under the Act.

Related documents

• This document amends Bermuda Monetary Authority Act 1969