Discussion Paper - Money Service Business, Payment Services and Foreign Exchange Services (April 2014)

Summary

This is a discussion paper issued by the Bermuda Monetary Authority in April 2014, inviting industry and public comment on how Bermuda should regulate money service business, payment services and foreign exchange services. It does not itself create binding rules; it sets out the Authority's thinking and options for possible future legislative and regulatory reform, and asks stakeholders for feedback by a stated deadline.

• Money Service Business (MSB): The paper notes the existing MSB Regulations 2007 do not adequately address card issuing or client fund holding, and outlines options including new MSB regulations, narrowing permitted activities, or a new standalone MSB Act.
• Payment Services: The Authority considers whether to develop a standalone payment services bill, add payment services provisions to the existing MSB Regulations, or fold them into new MSB legislation, drawing on the EU's PSD2 and UK Payment Services Regulations 2009 as models.
• Foreign Exchange Services: The paper discusses whether MSBs and payment services businesses performing foreign currency exchange should be treated as authorised dealers under the Exchange Control Act 1972, and flags a broader review of the Exchange Control Regulations 1973.
• Consultation questions: An appendix lists nine specific questions on which stakeholder views are sought, covering consumer needs, competition, the continued appropriateness of the Exchange Control Act, bank partnering requirements, and customer risk (e.g. cybercrime, AML/ATF oversight).

Comments on the proposals were requested to be sent to the Authority at policy@bma.bm no later than 30 June 2014. As a discussion paper, it imposes no ongoing compliance obligations on regulated entities beyond the invitation to respond by that date; any future rule changes would follow in separate legislation or regulations.

Key obligations

• Interested parties wishing to respond must submit comments to policy@bma.bm no later than 30 June 2014

Applies to

money service businesses, payment services businesses, foreign exchange service providers, banks and deposit companies

Deadlines

• 30 June 2014: Deadline for submitting comments on the proposals in the discussion paper to policy@bma.bm