Regulatory Updates for Bermuda Q2 2023

In this report we cover updates to financial sanctions that apply for Bermuda by the Bermuda Monetary Authority (“BMA”); proposed enhancements to supervisory powers within the BMA’s Investment Funds Act; amendments to the Investment Business Act; updates to the Conduct of Business Regulatory Regime for Digital Assets; requirements for the BMA’s Personal Information Protection Act ("PIPA"); information about consultation papers for insurance business; the high-risk jurisdictions and jurisdictions under increased monitoring by the FATF and more.

• BMA - Financial Sanctions Updates (International Sanctions - BMA)
  
  
  • Financial sanctions updates have been published by the BMA for Russia; Counter-Terrorism; Global Human Rights Regime; ISIL Daesh and Al-Qaida; Myanmar; Global Anti-Corruption; Somalia; Democratic People's Republic of Korea; Iran (Human Rights) Regime; Syria Regime; Democratic Republic of the Congo and Syria.

• FATF Updated Statements
  
  
  • On June 23, 2023 the FATF published two statements regarding jurisdictions with strategic deficiencies in their AML/CFT regimes (for High-Risk Jurisdictions subject to a Call for Action and Jurisdictions under Increased Monitoring).
  • See High-Risk Jurisdictions subject to a Call for Action - June 2023 (fatf-gafi.org) and Jurisdictions under Increased Monitoring - 23 June 2023 (fatf-gafi.org).

• BMA – Investment Funds
  
  
  • Consultation Paper - Proposed Enhancements to Supervisory Powers within the Investment Funds Act (Notices (bma.bm)
    • The IFA amendments seek to propose additional powers including:

1. 1. 1. 1. The power to impose additional penalties/late fees;
         2. Broadening of the range of actions that the Authority may, by giving directions, require be taken in respect of a fund; and
         3. Additional powers regarding the communication of information to the Authority by the appointed auditor

• • • A stakeholder response letter has been completed and published on the BMA website: https://www.bma.bm/document-centre/discussions-consultation-papers-investment-funds.
    • The Authority will publish the IFA Amendment Act and the updated Rules once the respective instruments are operative.

• BMA - Investment Business Amendment Act 2022
  
  
  • Persons who did not previously require a license under the Investment Business Act 2003 (as amended) or relied on the Exemptions Order (defined below) must now be licensed or registered with the Authority no later than July 26, 2023. 
  • Consequently, entities that are incorporated or formed in Bermuda that are carrying on investment business outside of Bermuda must now be licensed or registered under the Act.
  • Guidance for Prospective Applicants for Licensing and Registration can be found at Investment Business - Policy & Guidance - BMA.
  • The Investment Business Amendment Act 2022 can be found at: Bermuda Legislation Documents - BMA.

• BMA – Digital Assets Updates
  
  
  • Conduct of Business Regulatory Regime - Digital Asset Business Act 2018 - Final Code of Practice (Notices (bma.bm)
    • The Authority will allow a period of six months from the date of issue (April 4, 2023) for institutions licensed pursuant to the Digital Asset Business Act 2018 to become compliant.

• BMA – Personal Information Protection Act ("PIPA")
  
  
  • Companies that use any form of personal information in Bermuda must use the time between now and January 1, 2025 to:
    • Understand both the privacy rights of individuals and the obligations and requirements of their companies under PIPA
    • Develop a critical path to adopt and implement the compliance measures and policies that will be required
    • Train their personnel in the systems, activities and procedures that must soon be adopted and implemented to ensure their compliant use of personal information
  • The Personal Information Protection Amendment Act 2023 was introduced to reconcile the Personal Information Protection Act 2016, the Public Access to Information Act 2010 and the PATI Regulations 2014.

• BMA – Insurance Updates & Notices
  
  
  • 2023 Consultation Paper - Proposed Enhancements to the Regulatory Regime and Fees for Commercial Insurers Update (Notices (bma.bm). For questions regarding this matter, please contact riskanalytics@bma.bm.
  • Consultation Paper - Proposed Recovery Planning Rules for Bermuda Commercial Insurance Sector (https://www.bma.bm/document-centre/discussions-consultation-papers-insurance)
    • The Authority invites stakeholders to contribute their views on the Proposed Recovery Planning Rules. Stakeholders should send comments to FSRD@bma.bm no later than the close of business on July 21, 2023.
  • All Insurance Intermediaries should ensure that annual return submissions and related attachments are sent in a Microsoft Excel electronic format, in a zipped file to IntermediariesAnnualReturns@bma.bm on or before the filing deadline ( June 30, 2023).

• • • Any questions about this notice, prudential rules, annual return templates or codes of conduct should be forwarded to InsuranceManagers@bma.bm or InsuranceIntermediaries@bma.bm, respectively.

• Reports and guidance published on the BMA Website

• • 2022 BMA Annual Report (https://www.bma.bm/publications/annual-reports)

• • BMA - Guidance on the Exercise of Enforcement Powers with the Exchange Control Regulations 1973 (published in June 2023): Enforcement - Policy And Guidance - BMA

• Report on 2020 Money Laundering and Terrorist Financing Risk Assessments (Ministry of Finance): 2020-Money-Laundering-Terrorist-Financing-Risk-Assessments.pdf (www.gov.bm)

• • This report was published in April 2023 and is based on Bermuda’s third cycle of ML and TF national risk assessments from 2020, which shows a review that was even more wide-ranging than in previous years, providing analysis of risks to Bermuda that help to further strengthen our already robust AML/ATF framework.

Deadlines for 2023: 

• September 30, 2023: Annual CRS Compliance Certification Form– Ministry of Finance
• December 31, 2023: Economic Substance Declarations – ROC
• December 31, 2023: Statement of Compliance (6 months after year end) - BMA