Consultation Paper - Money Service Business Framework (2015-12)

Summary

This is a Bermuda Monetary Authority consultation paper proposing a new standalone Act to replace the current Money Service Business (MSB) regime under Section 20AA of the BMA Act 1969 and the MSB Regulations 2007. It sets out proposed changes to licensing, supervision and the scope of regulated activities, and invites industry and public comment before the framework is finalised.

• New standalone Act: Proposes a dedicated MSB Act incorporating existing BMA Act and MSB Regulations provisions plus powers common to other regulatory Acts, ultimately repealing Section 20AA and the MSB Regulations.
• Redefined activities: Refines definitions of money transmission services, cheque cashing and guaranteeing, money orders and traveller's cheques, bureau de change, and separates out payment service business; proposes removing card issuing from the MSB definition.
• Enhanced powers: Would give the Authority wider powers to obtain information and documents, impose licence conditions, require audited financial statements, conduct investigations, and manage disciplinary actions and appeals.
• Ministerial flexibility: Proposes giving the Minister of Finance power to amend the list of permitted MSB activities as the sector evolves.
• Exemptions: Licensed banks, deposit-taking companies and credit unions, incidental money transmission by barristers, solicitors or accountants regulated by a professional body, most trustees, and any other entity the Minister exempts on the Authority's advice would fall outside the new Act.
• Transition for existing licensees: Existing MSB licence holders would be grandfathered into the new Act and given a one year transitional period to achieve full compliance.

As a consultation paper, this document does not itself impose binding legal obligations; it describes proposals on which the Authority sought stakeholder feedback by 18 January 2016. Any actual obligations would arise only once the proposed MSB Act and related regulations are enacted.

Key obligations

• Stakeholders wishing to comment must submit views to policy@bma.bm no later than 18 January 2016
• Once enacted, existing MSB licence holders would need to comply with all provisions of the new Act within a one year transitional period
• Under the proposed framework, MSBs would need to prepare and submit financial statements, which the Authority may require to be audited

Applies to

Money service business (MSB) licensees, Payment service businesses, Bureau de change operators, Licensed banks, deposit taking companies and credit unions (referenced as exempt), Barristers, solicitors and accountants providing incidental money transmission services (referenced as exempt), Trustees (referenced as exempt, except certain trusts)

Deadlines

• 18th January 2016: Deadline for industry and public comments on the Consultation Paper proposals, to be sent to policy@bma.bm
• one year transitional period: Period given to existing MSB licence holders, once grandfathered under the new Act, to comply with all provisions of the new Act