Trusts (Regulation of Trust Business) Act 2001 - Statement of Principles (December 2019)

Summary

This is a Statement of Principles issued by the Bermuda Monetary Authority under section 6 of the Trusts (Regulation of Trust Business) Act 2001. It explains how the Authority interprets the minimum licensing criteria in the First Schedule of the Act and how it exercises its powers to grant, restrict or revoke trust business licences, to grant permits for holding trust assets above thirty million dollars, and to obtain information and reports from licensed undertakings.

• Fit and proper persons: Sets out how the Authority assesses whether controllers and officers, including shareholder controllers and those who direct or instruct the board, are fit and proper based on competence, soundness of judgment, diligence and probity.
• Corporate governance: Undertakings must implement governance policies and processes appropriate to their nature, scale, complexity and risk profile, with an appropriately staffed and directed board.
• Prudent conduct of business: Covers minimum net assets, adequate accounting and recordkeeping systems, adequate insurance cover, adequate liquidity, and consolidated supervision where relevant.
• Integrity and skill: Explains the criterion that a licensed undertaking must be conducted with integrity and appropriate professional skill.
• Ongoing notification duties: Licensed undertakings are expected to alert the Authority promptly of breaches, potential breaches, material business changes, or concerns about a shareholder controller's suitability.
• Information and reporting powers: Describes the Authority's statutory powers under sections 36, 37 and 38 of the Act to require information, documents and auditor or professional reports, and to enter business premises.
• Certificate of compliance: Undertakings must submit an annual certificate of compliance, signed by an officer, confirming compliance with minimum licensing criteria and codes of conduct, and non-company undertakings must also confirm compliance with section 11(3) limitations.

The Principles are of general application to entities licensed or seeking a licence under the Act and are intended to be read alongside the Authority's Enforcement Guide and relevant AML/ATF guidance notes. The Authority may revise the Principles over time and will publish any material changes or issue a revised version.

Key obligations

• Licensed undertakings must alert the Authority forthwith when they become aware of breaches or potential breaches of licensing criteria.
• Licensed undertakings must alert the Authority to any proposed material change in their business.
• Licensed undertakings must notify the Authority immediately if they become aware of material concerns regarding the suitability of a shareholder controller.
• Undertakings must submit periodic and occasional regulatory reports and financial and other information as determined by the Authority.
• Undertakings must submit an annual certificate of compliance, signed by an officer, certifying compliance with the minimum criteria for licensing and codes of conduct during the year.
• Non-company undertakings must also confirm annually that they have complied with the limitations imposed under or pursuant to section 11(3) of the Act.
• Shareholder controllers must be able to demonstrate to the undertaking and the Authority their sources of wealth and source of funds.
• Undertakings must comply with information, document production and reporting requests issued by the Authority under sections 36 and 37 of the Act.

Applies to

trust businesses licensed under the Trusts (Regulation of Trust Business) Act 2001, controllers and officers of licensed undertakings, shareholder controllers, limited trust licence holders

Related documents

• This document is made under Trusts (Regulation of Trust Business) Act 2001