Stakeholder Letter - Proposed Enhancements to the Corporate Service Provider Business Act 2012 (2024-10-25)

Summary

This is a stakeholder letter from the Bermuda Monetary Authority (BMA) responding to industry feedback on proposed enhancements to the Corporate Service Provider Business Act 2012. It summarises the Authority's decisions on several contested points raised during consultation and outlines next steps, but the amendments themselves have not yet been finalised or brought into force.

• Client money definition: The BMA has settled on a definition of client money (all monies received on behalf of, or owed to, clients or client structures by a licensed CSP), consistent with the CSP Code of Practice; further secondary instruments will elaborate on this after parliamentary approval.
• Client money controls: Instead of a mandatory external audit, the BMA will require an independent review of client money controls by a qualified person, intended to be less burdensome for smaller CSPs.
• Net asset requirement: Where an entity holds multiple licences, the highest applicable minimum net asset requirement will apply; entities winding down may apply under Section 55A of the Act to seek modification of net asset requirements on a case-by-case basis; further guidance on acceptable capital and liquid assets will follow in secondary instruments.
• Transition period: The BMA has agreed to a minimum 12-month transition period for the proposed changes, as recommended by stakeholders.
• Next steps: The Authority will finalise the recommended amendments to the Act and begin drafting supporting secondary instruments, which will themselves be issued for public consultation in due course.

No new binding obligations arise directly from this letter; it is a consultation response signalling the direction of forthcoming legislative and secondary-instrument changes affecting Bermuda Corporate Service Providers.

Applies to

Corporate Service Providers (CSPs)