Digital Asset Business (Prudential Standards) (Annual Return) Rules 2018

Summary

These Rules, made by the Bermuda Monetary Authority under the Digital Asset Business Act 2018, set out the mandatory content and supporting documentation for the annual return that every licensed digital asset business undertaking must file with the Authority. They specify the detailed governance, business, and AML/ATF information that must be reported, and require a signed director declaration confirming the return's accuracy.

• Annual return filing: A licensed undertaking must file an annual return with the Authority containing the matters set out in Schedule I (business, governance, product and client information) and Schedule II (AML/ATF and corporate governance information), as those matters stand when the return is filed.
• Supporting documents: The return must be accompanied by audited financial statements, a business plan for the next financial year, a certificate of compliance, and any other information required under section 7 of the Act.
• Director declaration: At the time of filing, two directors (or a director and an officer) must sign a declaration confirming the return is fair and accurate to the best of their knowledge and belief.
• Schedule I content: Covers licensee and director/officer details, digital asset services offered, margin trading and leverage exposure, organisational structure, business model and risk appetite, client account and geographic profiles, cyber security and key storage policies, transaction volumes, outsourcing arrangements, client asset protection, and insurance arrangements.
• Schedule II content: Requires detailed AML/ATF disclosures including SAC status, alignment with POCA Regulations, training practices, compliance officer details, pre-hire due diligence, suspicious activity report counts, client risk rating and geographic transaction data, PEP screening, sanctions screening, and corporate governance confirmations regarding board oversight of AML/ATF controls.

The Rules do not specify a particular annual filing deadline themselves but tie the obligation to file to section 7 of the Digital Asset Business Act 2018, and require the return's content to reflect the position as at the time of filing.

Key obligations

• A licensed undertaking must file an annual return with the Authority containing all matters set out in Schedules I and II, reflecting the position as at the date of filing.
• The annual return must be accompanied by audited financial statements, a business plan for the next financial year, and a certificate of compliance, plus any other required information under section 7 of the Act.
• 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 return is fair and accurate.
• The return must include comprehensive AML/ATF data (Schedule II, Table I) covering SAC registration, POCA Regulations alignment, training, compliance officer details, pre-hire screening, suspicious activity reports, client risk ratings, PEP and sanctions screening, and transaction data by geographic zone.
• The return must include corporate governance confirmations (Schedule II, Table II) regarding board oversight of AML/ATF controls, internal controls, and compliance monitoring.

Applies to

licensed digital asset business undertakings

Related documents

• This document is made under Digital Asset Business Act 2018