Notice - Digital Asset Issuance Statement of Principles and Digital Asset Issuance Rules 2020 (2020-06-23)

Summary

This is a notice from the Bermuda Monetary Authority (BMA) announcing that it has posted a draft Statement of Principles and a draft Digital Asset Issuance Rules 2020 for public consultation. These documents implement the Digital Asset Issuance Act 2020, which moved oversight of public offerings of digital assets from the Registrar of Companies to the BMA. The notice does not itself bring the Rules into force; it invites industry feedback before finalisation.

• Statement of Principles: Explains the factors the Authority will use to interpret the minimum authorisation criteria under Schedule 1 of the Act when deciding to authorise, revoke, or restrict a Digital Asset Issuance.
• Minimum disclosures: Proposed Rules would require issuers to disclose specified information to acquirers via the issuance document, covering the project, the digital asset, and issuance terms.
• Ongoing disclosures and obligations: Proposed requirements include quarterly returns to the Authority, controls against market abuse in secondary trading, and a robust risk management framework.
• IT and cybersecurity: Proposed requirements include a cybersecurity programme, periodic cybersecurity reports to the Authority, and a Bermuda-based data audit node to record transactions and events in real time.
• Custody of assets: High-level proposed requirements for issuers holding custody of acquirers' digital assets.
• AML/ATF compliance: Proposed measures include identification and verification of acquirers, enhanced due diligence, reliance on third parties, and record-keeping.
• Exemptions: Proposed carve-outs for issuers offering via an accredited Digital Asset Business, local issuers, and issuances subject to an equivalent jurisdiction's rules.

The Authority is specifically seeking feedback on the definition of local issuer and related exemptions, custody arrangement rules, and the feasibility and cost of technology to support the data audit node requirement. Comments may be submitted via email to policy@bma.bm or through a new online survey tool, with responses due no later than 20 July 2020.

Key obligations

• Stakeholders wishing to comment must submit responses to the consultation (via email to policy@bma.bm or the online survey) no later than 20 July 2020.

Applies to

digital asset issuers, authorised undertakings under the Digital Asset Issuance Act 2020

Deadlines

• 20 July 2020: Deadline for submitting consultation responses/survey feedback on the draft Statement of Principles and Digital Asset Issuance Rules 2020.