Investment Business (Recognised Bodies Recognition Requirements) Regulations 2024

Summary

These Regulations, made under the Investment Business Act 2003, set out the specific recognition requirements that an investment exchange or clearing house must satisfy before the Bermuda Monetary Authority will designate it as a recognised body. They came into force on 29 July 2024.

• Core requirement: An applicant for a recognition certificate must satisfy the Authority that it meets the recognition requirements before being designated a recognised body.
• Information to demonstrate: Applicants must provide information showing appropriate corporate governance arrangements, adequate internal systems and controls, an appropriate risk management framework, adequate rules and procedures, adequate capital and liquidity, adequate insurance commensurate with the nature and scale of operations, adequate record keeping including transaction records, and, where functions are outsourced, an appropriate framework to manage and monitor outsourcing arrangements.
• Additional information: The Authority may request further information to determine whether an applicant has met or can meet the recognition requirements.

The Regulations apply to entities seeking recognition as investment exchanges or clearing houses under the Investment Business Act 2003, rather than to already-licensed investment business firms generally.

Key obligations

• An applicant for a recognition certificate as an investment exchange or clearing house must satisfy the Authority that it meets the recognition requirements before being designated a recognised body.
• Applicants must provide information demonstrating appropriate corporate governance arrangements.
• Applicants must provide information demonstrating adequate internal systems and controls.
• Applicants must provide information demonstrating an appropriate risk management framework.
• Applicants must provide information demonstrating adequate rules and procedures.
• Applicants must provide information demonstrating adequate capital and liquidity.
• Applicants must provide evidence of adequate insurance covering risks inherent in their business, commensurate with the nature and scale of operations.
• Applicants must maintain adequate record keeping arrangements, including recording of transactions.
• Where arrangements are outsourced, applicants must have an appropriate framework to manage and monitor such outsourcing arrangements.
• Applicants must provide any additional information requested by the Authority to determine whether recognition requirements have been or can be met.

Applies to

investment exchanges, clearing houses, applicants for a recognition certificate as an investment exchange or clearing house

Deadlines

• 29 July 2024: Commencement date on which the Regulations come into operation.

Related documents

• This document is made under Investment Business Act 2003