Bermuda Regulatory Outlook 2023

Published date06 March 2023
Subject MatterFinance and Banking, Corporate/Commercial Law, Compliance, Fund Management/ REITs, Corporate and Company Law, Fund Finance
Law FirmConyers
AuthorMs Julie McLean and Jacari Brimmer-Landy

An old adage says that the only things in life that are certain are death and taxes. We think regulatory changes can surely be added to that list. A number of regulatory updates will affect Bermuda entities this year, and we have set out a summary to help our clients stay up to date with their regulatory requirements and ahead of any filing, compliance or administrative obligations.

Cyber Risk Management Code of Conduct

The BMA published the revised Operational Cyber Risk Management Code of Conduct (the "Cyber Risk Code") for corporate service providers, trust companies, money services businesses, investment businesses and fund administration providers, banks and deposit companies (together, the "Relevant Legal Institutions") on 26 September 2022. All Relevant Legal Institutions must be compliance with the Cyber Risk Code as of 15 February 2023.

The Cyber Risk Code requires the board of directors and senior management team to have oversight of cyber risks, and for the board to approve, at least annually, a cyber risk policy. Relevant Legal Institutions are also required to appoint a Chief Information Security Officer to oversee and implement its cyber risk programme and enforce the cyber risk policies.

Investment Business Act: Expiry of Transition Period

The Investment Business Act 2003 (the "Investment Business Act") was significantly amended in 2022, with the amendments becoming operative on 27 July 2022. A transition period of 12 months was granted to either register or be licensed under the Investment Business Act. That transition period will expire in July 2023, so any entity now caught under the amended legislation needs to start processing their applications as soon as possible. Previously, only entities which carried on investment business from a physical place of business in Bermuda where they employed staff were caught within the scope of the Investment Business Act. In addition, there were a number of exemptions which entities which carried on investment business within Bermuda were able to use to exempt them from licensing requirements. The amendments mean that (i) entities formed or incorporated in Bermuda but carrying on investment business outside Bermuda and (ii) entities formed outside Bermuda but carrying on "investment business" (a defined term) in or from Bermuda are now caught under the legislation. Unfortunately "in or from Bermuda" is not defined. In addition, most of the exemptions no longer apply, although an updated Order was passed to clarify that certain entities (mostly those already...

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