Investment Business (Prudential Standards) (Recognised Bodies) Rules 2024

Summary

These Rules set out prudential capital and liquidity standards that a recognised body must meet to maintain its recognition certificate under the Investment Business Act 2003. They came into force on 29 July 2024 and replace or supplement the Authority's general framework for prudential supervision of recognised bodies.

• Minimum capital: A recognised body must maintain the minimum amount of capital prescribed by the Authority to retain its recognition certificate.
• Form of capital: Capital must take the form of equity, comprising common stock or share capital, contributed surplus, retained earnings or deficits, or other reserves the Authority deems eligible.
• Liquid assets: A recognised body must hold liquid assets equal to at least three months of its annual expenditure, calculated from its most recently filed annual or annualised financial statements; liquid assets include cash and equivalents, short prepayments, and receivables outstanding less than 30 days.
• Breach notification: A recognised body must notify the Authority forthwith if it has breached, or believes it will breach, any applicable capital or liquidity requirement.
• Half-yearly returns: A recognised body must file half-yearly returns electronically containing the information specified in the Schedule (published on the Authority's website), plus any further information the Authority requests in writing; a hard copy must be filed if the Authority directs, by the date specified in that direction.

The Rules apply specifically to recognised bodies under the Investment Business Act 2003 and are made by the Bermuda Monetary Authority under section 73(1A) of that Act.

Key obligations

• Maintain the minimum amount of capital prescribed by the Authority to keep the recognition certificate valid
• Hold capital in the form of equity (common stock/share capital, contributed surplus, retained earnings/deficits, or Authority-approved reserves)
• Maintain liquid assets equal to at least three months of annual expenditure, calculated per the prescribed method
• Notify the Authority forthwith upon breaching, or anticipating breach of, any capital or liquidity requirement
• File half-yearly returns in electronic format containing the Schedule information and any additional information the Authority requests
• File a hard copy of the half-yearly return if directed by the Authority, by the date specified in that direction

Applies to

recognised bodies

Deadlines

• 29 July 2024: Commencement date on which the Rules come into operation
• half-yearly: Recognised bodies must file half-yearly returns in electronic format
• forthwith: A recognised body must notify the Authority immediately upon breach or anticipated breach of capital or liquidity requirements
• as specified in the Authority's direction: Deadline for filing a hard copy of the half-yearly return if the Authority directs one be filed

Related documents

• This document commences Investment Business Act 2003
• This document is made under Investment Business Act 2003