DAB Statement of Principles 2018

Summary

This is a Statement of Principles issued by the Bermuda Monetary Authority under section 5 of the Digital Asset Business Act 2018. It explains how the Authority interprets the minimum licensing criteria in Schedule 1 to the Act and the grounds for revocation in section 24, and how it exercises its powers to grant, restrict or revoke licences, to obtain information and reports, and to take enforcement action against digital asset business (DAB) licensees.

• Fit and proper persons: Sets out factors the Authority weighs when assessing whether controllers and officers of a DAB (including shareholder controllers) are fit and proper, covering competence, soundness of judgment, diligence and probity.
• Prudent conduct of business: Explains the general requirement that DABs conduct business prudently, including governance, risk controls, accounting and record-keeping, and AML/CFT-related controls.
• Integrity, skill and corporate governance: Covers the Schedule 1 criteria on integrity and professional skill, corporate governance arrangements, and consolidated supervision for group structures.
• Granting of licences: Describes the principles applied by the Authority when deciding whether to grant a DAB licence.
• Information-gathering and enforcement powers: Describes the Authority's statutory powers (sections 58, 59 and 60 of the Act) to require information, reports and documents from DABs and related persons, and to enter business premises, plus its supervisory approach of prudential discussions and on-site reviews.

The Principles should be read alongside the Authority's Statement of Principles on the Use of Enforcement Powers and related AML/ATF statements of principles, which prevail in the event of any conflict on enforcement matters. The Authority notes the Principles may be revised over time as the digital asset sector develops.

Key obligations

• A DAB must alert the Authority forthwith upon becoming aware of breaches or potential breaches of the minimum licensing criteria.
• A DAB must alert the Authority to any proposed material change in its business so the Authority can assess the impact on continued compliance with minimum criteria.
• A DAB must notify the Authority immediately if it becomes aware of material concerns regarding the suitability of a shareholder controller.
• A DAB must submit information about its business at intervals determined by the Authority in accordance with the Act and related regulations, rules, guidance notes or codes.
• A DAB must submit a certificate of compliance under section 66 of the Act, signed by two officers, certifying compliance with the minimum criteria to the best of their knowledge.
• A DAB must produce documents or information when required by written notice under sections 58 or 59 of the Act, and permit entry to business premises under section 60 where notice has been served.

Applies to

digital asset business (DAB) licensees, controllers, officers, shareholder controllers

Deadlines

• forthwith: A DAB must alert the Authority forthwith upon becoming aware of breaches or potential breaches of the minimum licensing criteria.
• immediately: A DAB must notify the Authority immediately of material concerns regarding the suitability of a shareholder controller.

Related documents

• This document is made under Digital Asset Business Act 2018