Guidance Notes - Money Service Business Act 2016

Summary

This document is guidance issued by the Bermuda Monetary Authority explaining the licensing regime and supervisory approach under the Money Service Business Act 2016. It covers who needs a licence, what an application must contain, and the ongoing reporting and supervisory expectations placed on licensed money service businesses.

• Scope: Applies to any person or entity providing money transmission, cheque cashing/guaranteeing, issuing or redeeming drafts/money orders/traveller's cheques, payment service business, or bureau de change services to the public in or from Bermuda; banks and deposit companies licensed under the Banks and Deposit Companies Act 1999 are exempt.
• Application requirements: Applicants (local/exempted companies, overseas permit companies, partnerships, exempted partnerships, overseas partnerships, or individuals conducting corporate service provider business) must submit the prescribed Application Form with fees, a detailed business plan, Shareholder Controller and Senior Executive questionnaires for each relevant person, AML/ATF policies and procedures, and details of the appointed Reporting Officer.
• Outsourcing: Any proposal to outsource money service provider functions requires the Authority's specific prior approval.
• Ongoing reporting: Licensees must provide an annual Certificate of Compliance and a quarterly Statistical Report, and must notify the Authority immediately of significant developments such as key personnel changes, material legal action, foreign regulator inquiries, or material business changes.
• Supervision: The Authority conducts off-site prudential discussions and on-site visits (including AML/record-keeping reviews) on a risk-based, rolling schedule, and may use formal statutory powers to obtain information or commission independent reports where concerns arise.

The Authority retains discretion to refuse a licence even where minimum criteria appear satisfied, and generally aims to decide on applications within about three months, though no statutory time limit applies.

Key obligations

• Applicants must submit the prescribed Application Form together with the required fee.
• Applicants must submit a detailed business plan under section 10(2) of the Act setting out the nature and scale of the proposed money service business.
• Applicants must submit completed Questionnaires for Shareholder Controller and Senior Executives for each shareholder/controller, director and officer.
• Applications must include AML/ATF policies and procedures and the name, contact details and qualifications of the appointed Reporting Officer in accordance with AML Regulation 17.
• Any proposal to outsource money service provider functions requires the Authority's prior specific approval.
• Licensed money service businesses must submit an annual Certificate of Compliance confirming compliance with all statutory (minimum licensing) requirements.
• Licensed money service businesses must submit a completed Statistical Report within 28 days of each calendar quarter end.
• Licensees must notify the Authority immediately of significant developments, including changes in key personnel, material legal action, foreign regulator information requests, and material business changes.

Applies to

money service businesses, applicants for a money service business licence, local and exempted companies, overseas (permit) companies, partnerships and exempted partnerships, overseas partnerships, individuals conducting corporate service provider business

Deadlines

• within 28 days of each calendar quarter end: Submission of the completed Statistical Report to the Authority under section 69 of the Act.
• annually: Submission of a Certificate of Compliance confirming compliance with statutory minimum licensing criteria.
• approximately three months: General expectation for how long an application may remain outstanding before decision, though the Act sets no statutory time limit.