Corporate Service Provider Business Act 2011 (Consultation Draft)

Summary

This is a consultation draft of proposed Bermuda primary legislation, the Corporate Service Provider Business Act 2011, released by the Bermuda Monetary Authority (BMA) for public comment. It would create a new licensing and supervisory regime for persons carrying on corporate service provider (CSP) business in or from Bermuda, administered by the BMA. As a draft bill, none of its provisions are yet in force; commencement would occur on a date later appointed by the Minister of Finance by notice in the Gazette.

• Licensing requirement: Prohibits carrying on corporate service provider business in or from Bermuda without a BMA licence, with criminal penalties (up to $100,000 fine or 5 years imprisonment on indictment) for contravention.
• Scope of CSP business: Covers company/partnership formation agents, acting as nominee shareholder, providing registered office/administrative/secretarial services, acting as resident representative under the Companies Act 1981 and related partnership Acts, and other services specified by regulation.
• Licensing criteria and fees: Applicants must satisfy minimum criteria (fitness and propriety, prudent conduct, integrity and skill, and safeguarding Bermuda's reputation), submit a business plan and AML/CFT policies, and pay a $200 application fee plus an annual fee of $20 per entity served.
• Ongoing supervisory powers: Gives the BMA powers to issue codes of practice, impose civil penalties, publicly censure licensees, make prohibition orders, restrict or revoke licences, conduct investigations, and obtain information and documents from licensees.
• Controller and disclosure rules: Requires notification of new/increased control over a licensee, allows the Authority to object to controllers, and requires notification of changes of controller or officer and filing of annual returns.
• AML/CFT integration: Consequential amendments would bring CSPs within the definition of an AML/ATF regulated financial institution under the Proceeds of Crime (Supervision and Enforcement) Act 2008, the AML/ATF Regulations 2008, and the Anti-Terrorism (Financial and Other Measures) Act 2004.

Because this is a consultation draft, its requirements are proposals only and are not currently binding; the BMA is seeking stakeholder feedback before any final bill is enacted and brought into force.

Key obligations

• Once in force, a person must hold a BMA corporate service provider licence before carrying on CSP business in or from Bermuda
• Licensees must satisfy and continue to meet the minimum licensing criteria (prudent conduct, integrity and skill, reputation safeguards)
• Licensees must pay an annual licence fee of $20 per entity served in the year ending 31 December of the preceding year
• Licensees must have regard to BMA codes of practice in conducting their business
• Licensees must notify the Authority of any change of controller or officer
• Licensees must file annual returns with the Authority
• Licensees must maintain adequate accounting records, systems of control, and AML/CFT policies and procedures consistent with the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008
• Persons must not use the word 'CSP' in a manner restricted by the Act without authorization

Applies to

corporate service providers, company formation agents, partnership formation agents, nominee shareholder providers, providers of registered office or administrative/secretarial services, resident representatives under the Companies Act 1981 and partnership Acts, licensed undertakings

Related documents

• This document amends Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008
• This document amends Anti-Terrorism (Financial and Other Measures) Act 2004
• This document amends Bermuda Monetary Authority Act 1969