As previously advised, fundamental changes were made to Bermuda’s Investment Business Act 2003 (the IBA) by the Investment Business Amendment Act 2022 (the Amendment Act), which may require the attention of clients whose activities were previously out of scope or subject to minimal exemption requirements under the IBA. Existing entities brought into scope by the Amendment Act of the requirement to be registered or licensed under the IBA will need to apply to the Bermuda Monetary Authority for registration or licensing by no later than 26 July 2023.
Entities brought into scope by the Amendment Act of the requirement to be registered or licensed under the IBA include:
- entities formed or incorporated in Bermuda and carrying on investment business without premises and employees in Bermuda
- entities carrying on investment business within certain previous exemptions (generally, those providing services privately to 20 or fewer persons or only to certain prescribed classes of persons, such as high-net-worth investors, institutional investors or investment funds) that had been provided by the now-repealed Investment Business (Exemptions) Order 2004
- entities engaging in the promotion of investments to the public by way of business in or from Bermuda
We encourage our clients to consider as a matter of priority whether they (or any of their Bermuda entities) carry on “investment business” for the purposes of the IBA as the application to license or register may take some time to prepare. Generally, carrying on any of the following activities by way of business will constitute “investment business” (unless a current exclusion applies):
- dealing in investments
- arranging deals in investments
- managing investments
- investment advice
- safeguarding and administering investments
- promotion of investments to the public
It should be noted that it is an offence to carry on investment business in or from Bermuda in breach of the requirement to be registered or licensed under the IBA. As such, a failure by a person brought into scope by the Amendment Act to file an application by 26 July 2023 may lead to significant fines and/or imprisonment.
Please get in touch with your usual Conyers contact if you have any questions.