Investment Business Act 2003 - Statement of Principles (July 2022)

Summary

This Statement of Principles (SoP), issued by the Bermuda Monetary Authority under section 9 of the Investment Business Act 2003, sets out how the Authority interprets the minimum licensing and registration criteria in the Act's Second Schedule and how it exercises its powers to grant, restrict or revoke licences and registrations, obtain information, and take enforcement action. It is not itself a set of new rules but explains the BMA's supervisory approach and expectations for investment providers.

• Fit and proper persons: Controllers and officers of an investment provider must be fit and proper, assessed on competence, soundness of judgement, diligence and probity, including consideration of criminal record, past regulatory censure, and business conduct.
• Corporate governance: Investment providers that are companies or partnerships should be effectively directed by at least two persons and have appropriate non-executive oversight given their nature, scale and complexity.
• Ongoing supervision: The Authority conducts risk-based prudential discussions and compliance visits, and monitors ongoing compliance with the Act, POCA, POCA SEA and related AML/CFT regulations.
• Notification duties: Investment providers (or, for Class A Registered Persons, their senior representative) must alert the Authority forthwith to actual or potential breaches of the Act and to any proposed material change in their business.
• Information and reporting powers: Sections 44 to 47 of the Act empower the Authority to require certificates of compliance, information, auditor or professional reports, and document production, and to enter business premises to obtain them.
• Enforcement: Where concerns arise, the Authority may use persuasion, impose additional reporting requirements, restrict, or ultimately revoke a licence or registration, as further detailed in the Enforcement Guide.

The SoP applies to all persons licensed or registered as investment providers under the Act, including Class A Registered Persons, and to their controllers, officers and shareholder controllers. It is a living document that the Authority may revise over time, with any material changes to be published.

Key obligations

• Controllers and officers of an investment provider must meet fit and proper standards on an ongoing basis, covering competence, soundness of judgement, diligence and probity.
• Investment providers (or the senior representative of a Class A Registered Person) must alert the Authority forthwith upon becoming aware of a breach or potential breach of the Act.
• Investment providers (or the senior representative of a Class A Registered Person) must alert the Authority to any proposed material change in their business.
• Investment providers must implement corporate governance policies and processes appropriate to their nature, scale and complexity, including direction by at least two persons and appropriate non-executive oversight.
• Investment providers must submit a certificate of compliance under section 44, signed by two officers, certifying compliance with the minimum licensing and registration criteria.
• Investment providers must provide information, reports and documents to the Authority when required under sections 45 and 46 of the Act, and permit entry to business premises for this purpose under section 47.
• Investment providers must submit information about their business at intervals determined by the Authority in accordance with the Act and related regulations.

Applies to

investment providers, licensees, registrants, Class A Registered Persons, controllers, officers, shareholder controllers

Deadlines

• forthwith: Investment providers must alert the Authority forthwith upon becoming aware of a breach or potential breach of any requirement or prohibition under the Act.
• forthwith: Investment providers must alert the Authority to any proposed material change in their business.

Related documents

• This document is made under Investment Business Act 2003