Investment Business Regulations 2004

Summary

These Regulations, made under the Investment Business Act 2003, set out operational requirements for licensed and registered investment providers in Bermuda. They cover licence application forms, and detailed rules on systems, records, client communications and record retention that investment providers must follow on an ongoing basis. Several provisions have been amended or revoked by BR 84/2022, effective 27 July 2022.

• Systems and records: Investment providers must maintain adequate systems of control and accounting/other records appropriate to the nature, scale and complexity of their business, and must keep client assets in accounts separate from their own, reconciled at any time.
• Contract notes: A contract note with specified particulars (parties, transaction details, fees, price, settlement date, currency conversion rate where relevant) must be provided to each client no later than one day after the transaction, or within seven days of receiving required particulars from a third party.
• Portfolio statements: A first portfolio statement must be provided within six months of opening a client account, and thereafter quarterly unless the client agrees in writing to a different arrangement.
• Accounting records: Investment providers must keep up-to-date accounting records in English covering both their own business and clients' assets, liabilities and transactions, and must allow client inspection of records relating to that client within 14 days of a request.
• Record retention: Entry records, account ledger records and supporting records must be kept for at least five years, stored at the principal or registered office (or senior representative's office for Class A Registered Persons) or otherwise made producible to the Authority within a specified period.
• Electronic records: Required information may be kept in electronic or other form, provided it can be inspected and reproduced in legible form.
• Licence applications: Applications for a licence under section 16 of the Act must be made in the form set out in the Schedule (now published separately on the Authority's website following the 2022 amendment).

The Regulations also revoked the earlier Investment Business Regulations 1999. Readers should note that the register of licences provisions and the original Schedule have been revoked and replaced by BR 84/2022.

Key obligations

• Investment providers must maintain adequate systems of control and adequate accounting and other records proportionate to the nature, scale and complexity of their business.
• Investment providers must keep client assets in accounts separate from their own, capable of individual and aggregate identification and reconciliation at any time.
• Investment providers must provide each client a contract note with specified particulars not later than one day after each transaction, or within seven days of receiving required particulars from a third party.
• Investment providers must provide clients a first portfolio statement within six months of account opening, and quarterly statements thereafter unless otherwise agreed in writing with the client.
• Investment providers must keep up-to-date accounting records in English disclosing specified particulars of their own business and of clients' assets, liabilities and transactions.
• Investment providers must permit client inspection of records relating exclusively to that client within 14 days of a request.
• Investment providers must retain entry records, account ledger records and supporting records for at least five years, kept at specified locations or made producible to the Authority.
• Applications for a licence under section 16 of the Investment Business Act 2003 must be made using the form set out in the Schedule.

Applies to

investment providers, Class A Registered Persons

Deadlines

• one day following the date of each transaction: Deadline to provide a contract note to a client after a transaction is effected.
• seven days from the date of receiving particulars from a third party: Deadline to provide a contract note when required particulars are held by a third party.
• within six months beginning with the date of opening of the client's account: Deadline to provide the first portfolio statement to a client.
• quarterly: Recurring frequency for portfolio statements unless otherwise agreed in writing with the client.
• not later than fourteen days from the date of receiving a request: Deadline to permit client inspection of records relating to that client.
• at least five years: Minimum retention period for entry records, account ledger records and supporting records.
• 27 July 2022: Effective date of amendments made by BR 84/2022 to various regulations (2, 4, 5, 6, 7, 8) and the Schedule.

Related documents

• This document commences Investment Business Act 2003
• This document is made under Investment Business Act 2003
• Consultation Paper - Proposed Enhancements to the Investment Business Regime: Regulations and Rules (2021-09-17) amends this document