Trusts (Regulation of Trust Business) Amendment Act 2012 (Bill, 2012-04-23)

Summary

This is a draft Bermuda bill that would amend the Trusts (Regulation of Trust Business) Act 2001 to give the Bermuda Monetary Authority (BMA) a broader disciplinary toolkit over licensed and registered trust businesses. It introduces civil penalties, public censure, prohibition orders and court injunctions, together with a formal warning notice and decision notice process and a right of appeal.

• Civil penalties: The Authority could impose a civil penalty of up to $500,000 per breach on any person who fails to comply with a requirement or contravenes a prohibition under the Act, unless the person took all reasonable steps and due diligence to comply.
• Public censure: The Authority could publish a statement that an undertaking has contravened a requirement of the Act, after following the warning notice and decision notice procedure.
• Prohibition orders: The Authority could prohibit an individual found not fit and proper from performing specified functions in relation to regulated trust activities; undertakings must ensure prohibited individuals do not perform those functions.
• Injunctions: The Authority could apply to the Court for orders restraining ongoing or anticipated breaches, requiring remedial steps, or freezing assets of a person suspected of contravening a requirement.
• Notice procedure: Before taking any of the above disciplinary actions the Authority must issue a warning notice, consider representations, and then issue either a decision notice or a notice of discontinuance.
• Appeals: Decision notices (for civil penalties, public censure, prohibition orders and refusals to vary/revoke prohibition orders) are appealable to the Trust Business Appeal Tribunal, with amendments made to the Tribunal's regulations to reflect the new notice regime.
• Consequential changes: Sections 14(4) and 15(5) of the principal Act (existing offence/penalty provisions) would be repealed and replaced by the new civil penalty regime, and the minimum criteria for registration would be amended to reference compliance failures, including AML/CFT and sanctions law.

As a bill dated 23 April 2012, this document is not yet law. It would only take effect once brought into operation by the Minister via notice in the Gazette, and different provisions could be commenced on different days.

Key obligations

• Once in force, undertakings must ensure no prohibited individual performs the function specified in a prohibition order made against them
• Once in force, a person who is subject to a warning notice may make representations to the Authority before a final decision is taken
• Once in force, a person receiving a decision notice imposing a civil penalty, public censure, or prohibition order has a right of appeal to the Trust Business Appeal Tribunal, supported by copies of the warning notice, decision notice and any representations made

Applies to

trust companies, undertakings licensed under the Trusts (Regulation of Trust Business) Act 2001, registered persons, individuals performing functions in relation to regulated trust activities, exempt persons under the Act

Deadlines

• day appointed by the Minister by notice in the Gazette: Commencement of the Act; different provisions may be brought into force on different days

Related documents

• This document amends Trust Business Appeal Tribunal Regulations 2004
• This document amends Trusts (Regulation of Trust Business) Act 2001