Consultation Paper and Illustrative Draft - Corporate Service Provider Business Rules 2025

Summary

This is a BMA consultation paper seeking industry feedback on proposed Corporate Service Provider Business Rules 2025, together with an illustrative draft of the Rules themselves. The Rules would sit under the Corporate Service Provider Business Act 2012 and are designed to strengthen financial resource requirements, client money handling, and regulatory reporting for CSP licensees. The Rules are not yet in force; they will take effect only after related amendments to the CSP Act are passed, and the commencement date in the illustrative draft is left blank pending finalisation.

• Returns: CSPs would be required to file annual returns (within four months of financial year end) and quarterly returns (within 21 days of quarter end), each accompanied by a signed declaration from senior officers, filed electronically and retained for five years.
• Minimum net assets: Proposed minimum net asset thresholds of $12,000 for limited licences and $50,000 for unlimited licences, with the Authority able to impose a higher threshold for a particular CSP.
• Liquid assets: CSPs would need to maintain liquid assets equal to one month of annual expenditure (limited licences) or three months (unlimited licences), calculated per detailed rules on qualifying liquid assets.
• Client money handling: Proposed rules require segregated client bank accounts, accurate record-keeping, monthly reconciliations of pooled accounts, documented policies reviewed annually, and an annual review by an approved independent person.
• Notification duty: CSPs must notify the Authority promptly of breaches of the net asset or liquidity requirements, or other significant financial developments threatening viability.
• Related legislative changes: The BMA also proposes repealing Section 36(c) of the CSP Act (removing an appeal right against licence refusal) and shortening the Authority's no-objection notice timeframe under Section 22 from three months to 90 days.

The BMA invited stakeholder feedback on these proposals, including on the illustrative draft Rules, to be submitted to policy@bma.bm by close of business on 4 June 2025. Final Rules and guidance will be published after the consultation period, incorporating feedback and the related CSP Act amendments.

Key obligations

• Once in force, CSPs would need to file annual returns with signed senior officer declarations within four months of the close of their financial year
• Once in force, CSPs would need to file quarterly returns with signed senior officer declarations within 21 days of the end of each calendar quarter
• Once in force, CSPs would need to maintain minimum net assets of $12,000 (limited licence) or $50,000 (unlimited licence), or a higher amount if directed by the Authority
• Once in force, CSPs would need to maintain liquid assets equal to one month (limited licence) or three months (unlimited licence) of annual expenditure
• Once in force, CSPs would need to segregate client money in approved client bank accounts, keep accurate distinguishable records, reconcile pooled accounts at least monthly, and have documented client money policies reviewed annually with an independent person's annual review
• Once in force, CSPs must notify the Authority promptly of any breach of net asset or liquidity requirements or other significant financial developments threatening viability
• Stakeholders wishing to comment on the proposed Rules must submit feedback to policy@bma.bm by close of business 4 June 2025

Applies to

corporate service providers

Deadlines

• 4 June 2025: Deadline for stakeholders to submit feedback on the Consultation Paper and Illustrative Draft Rules to policy@bma.bm
• within four months after the close of its financial year: Proposed deadline for a corporate service provider to file its annual return once the Rules take effect
• within 21 days of the end of each quarter: Proposed deadline for a corporate service provider to file its quarterly return once the Rules take effect