Stakeholder Letter: Consultation Paper: The Corporate Service Provider Business Amendment Act 2019 (2019-07-24)

Summary

This is a stakeholder letter from the Bermuda Monetary Authority summarising industry feedback received on its Consultation Paper for the Corporate Service Provider Business Amendment Act 2019, and explaining how the Authority has revised its proposals in response. It does not itself enact new rules but describes the finalised direction of amendments to the Corporate Service Provider Business Act 2012, its Code of Practice, and its Statement of Principles.

• Physical presence: A new standalone section 4A will set out the physical presence requirement; the Authority will assess suitability via desk based reviews, prudential meetings and on site visits, and CSPs should be ready to justify their arrangements.
• Register of licences: Section 12 is amended to clarify the Authority will continue to maintain and publish information on which CSPs are licensed.
• Segregation of client money: A legislative requirement to segregate client funds will apply once a CSP begins holding client money; each licensed legal entity should generally maintain its own client money account, with recordkeeping to distinguish client funds if one entity holds multiple licences.
• Power to require returns: The Act will be amended to give the Authority express power to require statutory returns from CSPs, aligning with its other regulatory acts; the Authority intends to coordinate timing and content with industry, particularly for multiple licence holders.
• Code and Statement of Principles: Further supervisory matters raised by industry will be addressed through amendments to the Code of Practice and the Statement of Principles, subject to further consultation.

The letter invites stakeholders with further questions to contact the Authority's policy team directly; it does not set a formal comment deadline or commencement date for the amendments.

Key obligations

• Once enacted, CSPs will need to demonstrate adequate physical presence in Bermuda under new section 4A and be prepared to explain their arrangements to the Authority during supervision.
• CSPs that hold client money will be required to segregate client funds, generally maintaining a separate client money account per licensed legal entity (or appropriate recordkeeping if one entity holds multiple licences).
• Licensees will be required to file statutory returns when requested by the Authority once the power to require returns is implemented.
• Persons or employees located outside Bermuda must remain available to the Authority when required and comply with the Code's record-keeping provisions.

Applies to

Corporate Service Providers (CSPs), licensed undertakings under the Corporate Service Provider Business Act 2012, dual licence holders (including trust businesses)

Related documents

• This document amends Corporate Service Provider Business Act 2012