Notice - Commencement of IBA changes (2022-07-18)

Summary

This BMA notice announces the commencement of the Investment Business (Amendment) Act 2022, which took effect on 27 July 2022. It follows a series of 2021-2022 consultation papers and substantially updates Bermuda's investment business regulatory and supervisory framework to align it with international standards.

• Wider scope: The framework now covers all Bermuda-formed or incorporated entities carrying on investment business as defined, regardless of where their operations are located.
• New registration regime: The existing exemptions regime is replaced by a relevant persons registration system, with certain regulated persons and public bodies designated as Non-Registrable Persons.
• Test Licence: A new Test Licence is introduced allowing eligible persons to trial innovative products and methods in a controlled environment.
• New activity: Promotion of Investments to the Public is introduced as a new regulated investment activity.
• Reporting and rules: Reporting requirements are strengthened, and the Authority gains new rule-making powers (including on net assets, liquidity and statutory reporting), supported by amended regulations on systems and controls and client money handling.
• Updated forms and guidance: The Authority has updated reporting and application forms and will issue new and enhanced guidance to accompany the changes.

Entities that are currently out of scope or exempted but will become subject to licensing or registration under the amended IBA are given a 12-month transition period from the 27 July 2022 effective date to achieve compliance, during which the Authority will assist licensees and registrants.

Key obligations

• Entities newly brought into scope that are currently out of scope or exempted must become licensed or registered under the amended Investment Business Act 2003 within the 12-month transition period following 27 July 2022.
• Entities carrying on investment business must comply with strengthened reporting requirements and new rules on net assets and liquidity once issued.
• Applicants and licensees should use the Authority's updated reporting and application forms reflecting the amended framework.

Applies to

investment business licensees, registrants under the Investment Business Act, previously exempted persons, Bermuda-formed or incorporated entities carrying on investment business, Non-Registrable Persons (certain regulated persons and public bodies)

Deadlines

• 27 July 2022: Effective date on which the enhancements to the investment business regime under the amended IBA take effect.
• 12-month transition period from 27 July 2022: Period within which entities newly required to be licensed or registered under the amended IBA must achieve compliance.