Consultation Paper - Proposed Amendments to the Banks and Deposit Companies Act 1999 with Illustrative Draft Bill

Summary

This is a Bermuda Monetary Authority consultation paper proposing amendments to the Banks and Deposit Companies Act 1999 (BDCA), accompanied by an illustrative draft amendment bill. It invites feedback from banks and deposit companies and other stakeholders on modernising the Act's enforcement powers, implementing the new Operational Resilience and Outsourcing Code, revising penalty structures, and consolidating fees.

• Enforceable standards: Strengthens BMA rulemaking powers under Section 36A to formalise minimum prudential and technical standards (capital adequacy, liquidity, large exposures, controller/director returns, statutory returns) that are currently only in guidance, with licensees able to apply for exemptions, modifications or filing extensions for a fee.
• Operational resilience and outsourcing: Introduces new sections requiring licensees to notify the BMA and obtain a 'no objection' before material outsourcing or important business service changes, and to report breaches of operational resilience impact tolerance thresholds within 24 hours, ahead of the Op Res Code taking effect for BDCA licensees on 1 January 2027.
• Late fees and civil penalties: Replaces civil penalties for late statutory returns and audited financial statements with fixed late fees (proposed at $1,000 per week or part thereof), while raising the general maximum civil penalty under Section 49A from $500,000 to $10 million for other breaches.
• Fee and structural alignment: Renames Section 16 'Supervision Fees' to 'Fees', consolidates the annual licensing fee (currently under the separate BDCA Fees Act, proposed for repeal) with the supervision fee, broadens winding-up petition powers to cover surrendered licences, and requires Gazette notice of licence surrenders.

The paper is open for public comment, and no changes to existing prudential standards, large exposure requirements, or reporting templates are proposed at this stage. As a consultation on a draft bill, none of the proposed licensee obligations are yet legally binding; they would only take effect if and when the amendment bill is enacted.

Key obligations

• Stakeholders wishing to comment must submit feedback to policy@bma.bm by close of business on 3 July 2026
• If enacted, licensees would need to notify the BMA and obtain a 'no objection' before outsourcing an important business service or entering a material outsourcing arrangement, or making other material changes to business
• If enacted, licensees would need to notify the BMA within 24 hours of becoming aware of a breach of an operational resilience impact tolerance threshold
• If enacted, licensees would be able to apply for exemptions, modifications, or filing extensions for prudential/technical standards subject to application fees ($1,500 for exemptions/modifications; $500-$1,000 for filing extensions)
• If enacted, late statutory returns or audited financial statements would incur a fixed late fee (proposed $1,000 per week or part thereof) rather than a civil penalty

Applies to

banks, deposit companies, BDCA licensees

Deadlines

• 3 July 2026: Deadline for industry and stakeholders to submit comments on the consultation paper to policy@bma.bm
• 1 January 2027: Date the Operational Resilience and Outsourcing Code takes effect for BDCA licensees, which the proposed amendments are designed to support
• within 24 hours: Proposed timeframe for licensees to notify the BMA after becoming aware of a breach of an operational resilience impact tolerance threshold
• 30 days: Proposed period within which the Authority must issue a 'no objection' notification (or be deemed not to object) after receiving a material change in business notification and all required information
• 28 days: Proposed period given to a licensee to submit additional information or representations after the Authority issues a preliminary notice of objection

Related documents

• This document amends Bermuda Monetary Authority Act 1969
• This document amends Banks and Deposit Companies Act 1999
• This document repeals Banks and Deposit Companies (Fees) Act 1975