Fund Administration Provider Business Guidance Note - Guidance for Prospective Applicants

Summary

This is a Bermuda Monetary Authority guidance note explaining the licensing and supervisory regime for fund administration provider business under the Fund Administration Provider Business Act 2019. It is aimed at prospective applicants seeking a licence to carry on fund administration services in or from within Bermuda, and describes what the Authority expects both at the application stage and on an ongoing basis once licensed.

Who is in scope

The Act applies to any person, company, partnership or individual providing one or more defined fund administration services (such as applying subscription monies, processing unit issues/redemptions, calculating net asset value, maintaining fund accounts, or distributing dividends) to an investment fund from a Bermuda presence, or otherwise determined by the Authority to be carrying on such business in Bermuda.

• Application requirements: Applicants must submit a Fund Application form, prescribed fees, a business plan (per Appendix IV), and completed Institutional and/or Personal Questionnaires for each controller, director and senior executive.
• Minimum licensing criteria: Controllers and officers must be fit and proper, the business must be conducted prudently, proper corporate governance must be observed, and full cooperation given for consolidated supervision.
• Net asset requirement: A licensed provider must maintain minimum net assets of $50,000 or it will not be regarded as conducting business prudently; providers must monitor this and alert the Authority of any breach or expected breach.
• Annual Statement of Compliance: Each fund administration provider must submit an annual Statement of Compliance (FA Form 4) confirming compliance with minimum licensing criteria and codes of practice; failure to do so is an offence.
• Annual financial statements: Each provider must submit annual financial statements to the Authority within four months of its financial year end.
• Proactive disclosure: Providers are expected to promptly notify the Authority of significant developments, including changes in key personnel, material legal action, foreign regulator inquiries, or material changes in business activities.
• Supervisory engagement: Licensed providers are subject to prudential meetings, on-site visits (with roughly eight to ten weeks' advance notice for pre-visit information requests), and possible thematic reviews or commissioned third-party reports.

The Authority generally expects to decide on an application within about three months, though the Act sets no statutory deadline. Non-compliance identified during supervision may lead to remedial action requests, use of formal information powers, or enforcement action.

Key obligations

• Applicants must submit a Fund Application form, prescribed fees, a business plan, and Institutional/Personal Questionnaires for controllers, directors and senior executives
• Licensed fund administration providers must submit an annual Statement of Compliance (FA Form 4) confirming compliance with minimum licensing criteria and codes of practice
• Licensed fund administration providers must submit annual financial statements to the Authority within four months of their financial year end
• Licensed fund administration providers must maintain minimum net assets of $50,000 and alert the Authority of any breach or expected breach
• Licensed fund administration providers should proactively notify the Authority of significant developments such as changes in key personnel, material legal action, foreign regulator inquiries, or material business changes
• Providers must cooperate with the Authority's supervisory activities, including responding to information requests, meetings, and on-site visits

Applies to

fund administration providers, prospective applicants for a fund administration provider licence, companies, partnerships, individuals conducting fund administration provider business

Deadlines

• within four months of financial year end: Deadline for licensed fund administration providers to submit annual financial statements to the Authority
• annually: Fund administration providers must submit a Statement of Compliance to the Authority confirming compliance with minimum licensing criteria and codes of practice
• approximately three months: General expectation for how long an application should remain outstanding before a decision, though no statutory time limit applies
• eight to ten weeks ahead of a visit: Typical notice period the Authority gives before an on-site supervisory visit, requesting pre-visit information