Digital Asset Business Statement of Principles (March 2021)

Summary

This is the Bermuda Monetary Authority's Statement of Principles under section 5 of the Digital Asset Business Act 2018, setting out how the Authority interprets the minimum licensing criteria in Schedule 1 of the Act, the grounds for licence revocation, and its powers to grant, restrict or revoke licences and to obtain information from licensees. It is a policy/interpretive document rather than binding rules, but it describes the standards the Authority applies when supervising Digital Asset Business (DAB) providers.

• Fit and proper persons: Explains how the Authority assesses whether controllers and officers of a DAB are fit and proper, covering competence, soundness of judgment, diligence and probity, including for shareholder controllers holding 5 percent or 20 percent or more of shares.
• Prudent conduct of business: Sets out expectations for governance, risk management, AML/CFT controls, accounting and record-keeping systems that demonstrate a DAB is being run prudently.
• Integrity, skill and corporate governance: Describes criteria relating to integrity and skill of those running the business, corporate governance arrangements, and consolidated supervision where relevant.
• Licensing and enforcement discretion: Explains factors the Authority weighs when deciding to grant, restrict or revoke a licence, and how this interacts with its Statement of Principles on the Use of Enforcement Powers (SPUEP).
• Information and reporting powers: Describes the Authority's statutory powers under sections 58 to 60 of the Act to require information, reports and documents from DAB's, related entities, and third parties, including on-site inspection powers.

The document also flags specific continuing obligations on licensed DAB's, including notifying the Authority of breaches, material business changes, or concerns about a shareholder controller, and submitting periodic reporting and a signed certificate of compliance.

Key obligations

• A DAB must alert the Authority immediately when it becomes aware of breaches or potential breaches of the minimum licensing criteria.
• A DAB must alert the Authority to any proposed material changes to its business.
• A DAB must notify the Authority immediately if it becomes aware of material concerns regarding a shareholder controller's suitability.
• 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.
• A DAB must comply with written notices under sections 58 and 59 of the Act requiring information, reports or production of documents, and permit entry to business premises under section 60 where a notice has been served.

Applies to

Digital Asset Business (DAB) licensees, controllers, officers, shareholder controllers

Deadlines

• immediately: A DAB must alert the Authority immediately upon becoming aware of breaches or potential breaches, proposed material changes to its business, or material concerns about a shareholder controller's suitability.

Related documents

• This document is made under Digital Asset Business Act 2018