Investment Business - Framework at a Glance (Effective 27 July 2022)

Summary

This document is a BMA guidance summary (a table format) setting out the revised investment business regulatory framework that took effect 27 July 2022. It maps out which supervisory requirements, minimum criteria, and reporting obligations apply to each category of person carrying on investment business in or from Bermuda under the Investment Business Act 2003.

• Standard licensees: Persons licensed under section 17 of the IBA to carry on one or more investment activities, subject to any BMA-imposed conditions.
• Test licensees: Persons licensed to carry on investment activities in a limited 'test' manner for a period agreed with the BMA, which may be extended.
• Class A Registered Persons: Persons incorporated in Bermuda who are licensed/regulated in another jurisdiction and do not maintain a place of business in Bermuda.
• Class B Registered Persons: Persons providing services exclusively to sophisticated/high net worth investors and investment funds, or to fewer than 20 persons where services are not offered to the public.
• Non-Registrable Persons (NRP): Persons already licensed/regulated under other regimes, or Bermuda governmental/quasi-governmental bodies, who are not subject to these requirements.

The guidance details minimum criteria (fitness and propriety, corporate governance, prudent conduct, AML/ATF and sanctions compliance, capital and liquidity, record-keeping, insurance, consolidated supervision and integrity/skill) and specifies which categories they apply to. It also sets out statutory reporting obligations and their due dates under the Investment Business (Statutory Returns) Rules.

• Annual return and accounts: Annual Regulatory Information Return and audited (if holding client money) annual accounts due four months after financial year end.
• Quarterly filings: Quarterly financial statement and liquidity analysis due 21 days after quarter end, where required by the Authority.
• Prudential Information Return (PIR): Due 21 days after quarter end, only where the Authority requires additional capital under the risk-based methodology.
• CFD supplementary return: Due 21 days after quarter end where the person conducts CFD business with retail clients.
• Certificate of compliance: Due four months after financial year end.
• Control notifications: Notification of new or increased control must be given prior to assuming control; notification of change of controller or officer must be given within 14 days of the change.

Key obligations

• Licensed and registered persons (as applicable) must submit an Annual Regulatory Information Return within four months of financial year end
• Licensed and registered persons (as applicable) must submit annual accounts or financial statements within four months of financial year end, audited if holding client money
• Where required by the Authority, submit a quarterly financial statement within 21 days after quarter end
• Where required by the Authority, submit a liquidity analysis within 21 days after quarter end
• Where required by the Authority to maintain additional capital under the risk-based methodology, submit a Prudential Information Return within 21 days after quarter end
• Where doing business involving CFDs with retail clients, submit the Supplementary Quarterly Reporting Form within 21 days after quarter end
• Submit a certificate of compliance within four months of financial year end
• Notify the Authority of a new or increased controller prior to assuming that level of control
• Notify the Authority of a change of controller or officer within 14 days of the change
• Comply with minimum criteria including fitness and propriety, corporate governance, prudent conduct of business, AML/ATF compliance, sanctions compliance, and maintenance of adequate records, systems and insurance

Applies to

Standard licensees, Test licensees, Class A Registered Persons, Class B Registered Persons, Non-Registrable Persons

Deadlines

• 27 July 2022: Effective date of the revised investment business framework
• Four months after Financial Year End: Due date for Annual Regulatory Information Return, annual accounts/financial statements, and certificate of compliance
• 21 days after quarter end: Due date for quarterly financial statement, liquidity analysis, PIR (where required), and CFD supplementary reporting form
• Prior to assuming (new level of) control: Notification of new or increased control must be submitted
• Within 14 days of the change: Notification of change of controller or officer must be submitted