Legislative And Regulatory Developments In Bermuda For Q3 2022
| Published date | 19 December 2022 |
| Subject Matter | Finance and Banking, Corporate/Commercial Law, Insurance, Government, Public Sector, Financial Services, Corporate and Company Law, Insurance Laws and Products, Money Laundering |
| Law Firm | Carey Olsen |
| Author | Mr Matthew Grigg, Steven Rees Davies and Gavin Woods |
This report provides a summary of important legislative and regulatory developments in Bermuda for the quarter ended 30 September 2022. For this quarter, we focus on developments in the following sectors: Anti-Money Laundering ("AML")/Anti-Terrorist Financing ("ATF") and Sanctions; Banking; Digital Assets; Employment and Immigration; Insurance; Investment Business; Telecoms/Utilities; and General Legal/Regulatory Reforms.
AML/ATF AND SANCTIONS
The Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008 provide that the Bermuda regulated sectors and relevant persons must apply enhanced customer due diligence to customers in high-risk jurisdictions. On 12 July 2022, the Minister of Legal Affairs and Constitutional Reform issued the AML-ATF Advisory 2/2022 ("Advisory") highlighting the following high-risk countries:
- Democratic People's republic of Korea*;
- and Iran*
The Advisory also noted that risk should be minimized (which may include enhanced due diligence measures) in high-risk situations, with respect to the following countries:
- Albania
- Barbados
- Burkina Faso
- Cambodia
- Cayman Islands
- Haiti
- Jamaica
- Jordan
- Mali
- Morocco
- Myanmar*
- Nicaragua*
- Pakistan
- Panama
- Philippines
- Senegal
- South Sudan*
- Syria*
- Turkey
- Uganda
- United Arab Emirates
- Yemen*
Each country marked with an (*) is subject to sanctions measures at the time of publication of the Advisory which require firms to take additional measures, in accordance with the International Sanctions Regulations 2013.
Notably, Malta has been removed as a jurisdiction subject to increased monitoring by the Financial Action Task Force.
BANKING
Banks and Deposit Companies Amendment Act 2022
On 1 July 2022, the Bermuda Government announced that the Banks and Deposit Companies Amendment Act 2022 ("Amendment Act") had been tabled before the House of Assembly. The primary purpose of the Amendment Act is to provide the Bermuda Monetary Authority ("BMA") with an express power to issue codes of conduct in relation to the manner in which an institution conducts deposit-taking business, as well as allow for the regulation of banking fees.
The Amendment Act will allow the BMA to ensure banking institutions are complying with consumer protection requirements in an appropriate manner and promoting better and fairer treatment of their customers.
The Amendment Act received Royal Assent on 2 August 2022.
Revised Banking Code of Conduct
On 11 August 2022, the BMA published a revised banking code of conduct which will have a six-month transition period. The revised code of conduct is in line with amendments to the Bermuda Monetary Authority Act 1969 which expand the BMA's regulatory remit to encompass the oversight of the conduct of business by financial institutions with the aim of promoting fair outcomes for customers.
Operational Cyber Risk Management Code of Conduct: Banks and Deposit Companies
On 26 September 2022 the BMA published a notice with respect to the Operational Cyber Risk Management Code of Conduct: Banks and Deposit Companies ("Banks Cyber Code"). Banks and deposit companies are required to comply with the Banks Cyber Code by 15 February 2023.
DIGITAL ASSETS
On 26 July 2022, the BMA published guidance notes for entities seeking exemption from dual licensing due to the ancillary nature of their activities ("Exemption Guidance Notes"). The Exemption Guidance Notes provide information for entities seeking an exemption from the requirement to be licensed under the Investment Business Act 2003, pursuant to the Investment Business (Non-Registrable Persons) Order 2022, on the basis that the otherwise licensable activities are carried on in an ancillary manner to activities conducted and licensed under the Digital Asset Business Act 2008 ("DABA").
The Exemption Guidance Notes pertain to entities licensed to conduct digital asset business which carry on investment business in an ancillary manner. It is expected that a comparable exemption in respect of licensed investment providers will be provided for under the DABA regime, at which time, this guidance will be updated accordingly.
EMPLOYMENT AND IMMIGRATION
Increasing Pensions
The Contributory Pensions (Amendment of Benefits) Order 2022 was tabled before the House of Assembly on 1 July 2022. The purpose of the Order is to increase pensions and other benefits under the Contributory Pensions Act 1970 by 2.75%. This increase will be backdated to 16 August 2021.
Update on Economic Investment Certificate in Bermuda
On 15 July 2022, the Bermuda Government provided an update on the Economic Investment Certificate ("EIC"). As of 11 July 2022, the total amount invested stood at $349.6 million dollars ($349,644,195), since the program was launched on 1 March 2021. This investment includes over $94 million ($94,180,923) in real estate purchases and over $255 million ($255,463,272) invested into new and existing businesses.
Since the program's inception, the investments to date represent 19 applications being approved, covering 48 persons, including dependents. There is an active, growing pipeline of over 41 persons who have registered their expressions of interest in the program. The total investments in the EIC pipeline now exceed $88 million dollars.
Under the revised policy, qualifying investments are...
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