Digital Asset Issuance Act 2020 - Statement of Principles

Summary

This Statement of Principles, issued by the Bermuda Monetary Authority under section 7 of the Digital Asset Issuance Act 2020, explains how the Authority interprets and applies the minimum criteria for authorisation set out in Schedule 1 to the Act, the grounds for revoking or restricting an authorisation, and its powers to obtain information, reports and documents from undertakings conducting a Digital Asset Issuance (DAI).

• Fit and proper persons: Controllers and officers of an authorised undertaking must be fit and proper, assessed on competence, soundness of judgment, diligence and probity, including past conduct, criminal record and regulatory censures.
• Prudent conduct: The board, partners and senior management must ensure the DAI is conducted prudently, with effective controls, adequate accounting and record keeping systems, and appropriate corporate governance.
• Integrity, skill and consolidated supervision: The Authority interprets the Schedule 1 criteria on integrity and skill, corporate governance, and consolidated supervision when assessing applicants and monitoring ongoing compliance.
• Authorisation decisions: Sets out considerations relevant to the Authority's discretion to grant, restrict or revoke an authorisation, including in supervisory or enforcement contexts.
• Information and reports: Describes the Authority's powers under sections 62 to 64 of the Act to require information, auditor or professional reports, documents, and to enter business premises.

The Principles are read alongside the Authority's Enforcement Guide and any related Guidance Notes, and may be revised over time as the sector develops; a revised version would be published if material changes are made.

Key obligations

• Authorised undertakings must submit information about their business at intervals determined by the Authority in accordance with the Act and related regulations, rules, guidance notes or codes.
• An authorised undertaking that becomes aware of breaches or potential breaches of the minimum criteria must alert the Authority forthwith.
• An authorised undertaking must alert the Authority to any proposed material change in its business.
• Authorised undertakings must notify the Authority immediately if they become aware of material concerns regarding the suitability of a shareholder controller.
• An authorised undertaking must submit a certificate of compliance, signed by an officer, certifying compliance with the minimum criteria to the best of their knowledge, as required under section 70 of the Act.
• Undertakings must comply with written notices under sections 62 and 63 of the Act requiring information, documents or professional reports, and must permit entry to business premises under section 64 where notice has been served.

Applies to

undertakings authorised to conduct a Digital Asset Issuance (DAI), controllers, officers, shareholder controllers, local representatives of DAI issuers

Deadlines

• forthwith: An authorised undertaking must alert the Authority forthwith upon becoming aware of breaches or potential breaches of the minimum criteria.
• immediately: Authorised undertakings must notify the Authority immediately of material concerns regarding the suitability of a shareholder controller.