Digital Asset Business (Prudential Standards) (Annual Return) Rules 2018 (BR 98 / 2018)

Summary

These Rules, made under Bermuda's Digital Asset Business Act 2018, set out the detailed content requirements for the annual return that every digital asset business licensee must file with the Bermuda Monetary Authority. They specify the prudential, AML/CFT, corporate governance and sanctions information that must be reported, and require an electronic filing accompanied by supporting documents and a signed declaration of accuracy.

• Annual return content: Schedule 1 requires details on directors, officers, business model, products (including margin trading and leverage), transaction volumes, client accounts, wallet addresses, geographic client profile, cyber security and outsourcing arrangements, and client asset protection measures.
• AML/CFT reporting (Schedule 2): Extensive disclosures on client risk rating, transaction types and channels, geographic exposure and PEPs, GoAML registration and SAR filings, staff AML/TF training, AML/ATF controls, and detailed corporate governance and compliance monitoring information.
• Sanctions reporting (Schedule 3): Confirmation of client and employee sanctions screening, disclosure of any frozen assets under Bermuda's sanctions regime in the last 12 months, and related details.
• Supporting documents: The return must be accompanied by audited financial statements, a business plan for the next financial year, a certificate of compliance under section 66 of the Act, and any other information required under section 7.
• Declaration: A declaration signed by two directors, or a director and an officer, confirming the return is fair and accurate to the best of their knowledge, must be filed alongside the return.

The Rules do not themselves state a specific filing deadline or periodic due date; the timing of the annual return is governed by section 7 of the Digital Asset Business Act 2018. The Rules took effect on 11 September 2018.

Key obligations

• Licensed undertakings must file an annual return with the Bermuda Monetary Authority in the electronic format prescribed by the Authority, in accordance with section 7 of the Digital Asset Business Act 2018.
• The annual return must contain the information set out in Schedules 1 (prudential/business matters), 2 (AML/CFT) and 3 (sanctions) as those matters stand at the time of filing.
• The annual return must be accompanied by audited financial statements prepared under section 31 of the Act, a business plan for the next financial year, a certificate of compliance prepared under section 66 of the Act, and any other information required under section 7.
• At the time of filing the annual return, the licensed undertaking must also file a declaration signed by two directors, or a director and an officer, confirming the information is fair and accurate to the best of their knowledge and belief.

Applies to

licensed undertakings (digital asset business licensees)

Deadlines

• 11 September 2018: Operative date on which the Rules took effect.

Related documents

• This document is made under Digital Asset Business Act 2018