Consultation Paper - Proposed Fee Changes (August 2018)

Summary

This is a Bermuda Monetary Authority consultation paper, issued in draft form, proposing a phased revision of fees charged to supervised financial institutions for 2019 and 2020. The BMA states the changes are needed to fund increased operating costs (partly from a target operating model review requiring up to 39 additional staff) and to better align fees with the actual supervisory resources used across sectors. The paper invites industry comment before any fees are finalised.

• Banks and deposit companies: Annual fees increased 12% in 2019 and 2020 under the Banks and Deposit Companies Act 1999; application fee raised from $22,712 to $50,000; asset-based tiers under the Banks and Deposit Companies (Fees) Act 1975 expanded from three to seven tiers with a one-time realignment in 2019.
• Corporate service providers: Flat annual fees of $10,000 (limited licences) and $25,000 (unlimited licences) proposed, replacing the current $21-per-entity-serviced basis.
• Credit unions: Annual fee proposed to increase from $2,500 to $5,000.
• Insurance: New tiers for Class C, D, E and Managers; significant increases for Class 1, 2, 3, E, Special Purpose Insurers and Non-Resident Insurance Undertakings; 12% increases for Class 3A, A and B; 10% increases for Class 3B, 4 and commercial groups; new case-by-case fees for internal capital model and Section 6C applications; new fees for loss portfolio transfer approvals and for active run-off insurers; new tiered filing extension fees.
• Investment business: Annual fees increased 12% in 2019 and 2020 under the Investment Business Act 2003.
• Investment funds: Annual fees increased 10% in 2019 and 2020 under the Investment Funds Act 2006; a new late filing/penalty fee introduced for a section 26(1)(b) statement filed more than six months after a fund's financial year end.
• Money service businesses: Annual fees increased 12% in 2019 and 2020 under the Money Service Business Act 2016.
• Trust companies: Annual fees increased 10% in 2019 and 2020 under the Trusts (Regulation of Trust Business) Act 2001.

The proposed fee schedule would be phased in over two years beginning 1 January 2019, with most 2019 annual fees stated as due on or before 31 March 2019 if adopted. As this is a consultation paper, none of the fee changes are yet in force; stakeholders were asked to submit written comments to the Authority by 14 September 2018.

Key obligations

• Stakeholders wishing to comment on the proposed fee changes must submit written views to policy@bma.bm no later than 14 September 2018, using the Summary Sheet for Consultation Comments provided.
• If adopted as proposed, annual fees for banks, deposit companies, investment providers, investment funds, fund administrators, and trust licensees would be due on or before 31 March 2019.
• If adopted, a new late filing fee/penalty would apply to any Investment Funds Act section 26(1)(b) statement submitted more than six months after a fund's financial year end.

Applies to

banks, deposit companies, corporate service providers, credit unions, insurers (Class 1, 2, 3, 3A, 3B, 4, A, B, C, D, E, Special Purpose Insurers, Non-Resident Insurance Undertakings, Managers, active run-off insurers), investment business providers, investment funds and fund administrators, money service businesses, trust companies (limited and unlimited trust licensees)

Deadlines

• 14 September 2018: Deadline for industry and interested parties to submit comments on the proposed fee changes to policy@bma.bm.
• 1 January 2019: Proposed start of the phased two-year implementation of the revised fee schedule.
• on or before 31 March 2019: Proposed due date for 2019 annual fees under the Banks and Deposit Companies Act 1999, Investment Business Act 2003, Investment Funds Act 2006, and Trusts (Regulation of Trust Business) Act 2001, if the proposals are adopted.