Stakeholder Letter: Consultation Paper: The Trusts (Regulation of Trust Business) Amendment Act 2019

Summary

This is a stakeholder letter from the Bermuda Monetary Authority (BMA) summarising industry feedback on its Consultation Paper for the Trusts (Regulation of Trust Business) Amendment Act 2019, and explaining how the Authority has responded to that feedback. It describes proposed changes to the Trusts (Regulation of Trust Business) Act 2001, the trust business Code of Practice, and the Statement of Principles, rather than setting out final, binding rules.

• Physical presence: A new standalone section 4B will set the physical presence requirement; the Authority will assess adequacy via desk-based reviews, prudential meetings and on-site visits, and licensees should be ready to explain their arrangements.
• Registration of licences: Section 13 is amended to confirm the Authority will continue to maintain publicly available information on which trust businesses are licensed.
• Adequate liquidity: The Authority will determine adequacy of liquidity management through desk-based reviews, prudential meetings and on-site visits.
• Segregation of client money: A legislative requirement to segregate client funds will be introduced; dual licence holders are generally expected to maintain separate client money accounts per legal entity, with appropriate recordkeeping if one account is shared.
• Power to require returns: The Act will be amended to give the Authority express power to require statutory returns, with the Authority intending to coordinate timing and content with industry.
• PTC annual declaration: Private Trust Companies exempted from licensing will be required to submit an annual declaration, signed by directors, confirming no change in the nature and scope of the PTC's business; this will not apply to other exempt entities such as bare trustees or entities already regulated as pension plans or investment funds.
• Code and Statement of Principles: Other supervisory matters raised by stakeholders will be addressed through further amendments to the Code of Practice and Statement of Principles, to be consulted on separately.

As a consultation response letter, this document explains the Authority's rationale and intended direction rather than imposing immediate, enforceable obligations; readers should watch for the finalised Amendment Act and related Code/SoP changes for binding requirements and effective dates.

Key obligations

• Trust businesses must be able to demonstrate and explain their physical presence arrangements to the Authority during supervisory reviews under the proposed section 4B.
• Licensed trust undertakings will be required to segregate client money, generally maintaining a separate client account per licensed legal entity (with recordkeeping if shared).
• Licensees will be subject to a new statutory power requiring them to file returns as and when requested by the Authority.
• Exempted Private Trust Companies will be required to submit a signed annual declaration confirming no change in the nature and scope of their business.

Applies to

trust businesses, licensed trust undertakings, Private Trust Companies (PTCs), corporate service providers, dual licence holders, bare trustees (referenced as exempt)

Related documents

• This document amends Trusts (Regulation of Trust Business) Act 2001