Bermuda Corporate And Commercial Legal Review 2024/25

The Investment Fund Business Act 2024 came into operation on 29 July 2024 and introduces a framework for an investment exchange or clearing house to apply to the Bermuda Monetary Authority (BMA) for designation as a recognised clearing house, thereby allowing it to carry on such business in Bermuda without requiring a licence or registration under the Investment Business Act 2003.

In connection with the Amendment Act, the Investment Business (Recognised Bodies Recognition Requirements) Regulations 2024, the Investment Business ((Recognised Bodies (Reporting Accountants) (Facts and Matters of Material Significance)) Regulations 2024 and the Investment Business ((Prudential Standards) (Recognised Bodies)) Rules 2024 have also been introduced.

A Recognised Body will be subject to certain ongoing requirements under the Recognised Bodies Regulatory Framework, including:

• Payment of the annual fee to the BMA.
• Preparation of annual financial statements or accounts.
• Appointment of an approved auditor to audit the annual financial statements or accounts.
• Filing of annual financial statements or accounts and auditors report with the BMA.
• Filing of half-yearly returns with the BMA.
• Notifying the BMA in advance of any proposal to amend its constitution or its market or listing rules.
• Notification requirements relating to changes to ‘controllers’ or ‘officers’ of the Recognised Body.
• Capital and liquidity requirements.
• Notification requirements in the event of a breach of capital or liquidity requirements.
• And continuing to satisfy the recognition standards required for designation as a Recognised Body on an ongoing basis.

SAC Guidance Note For General Business Insurers

The BMA’s Guidance Note on General Business Insurers with Segregated Accounts and Separate Accounts (SAC Guidance Note) went into effect on 1 January 2025. 

The SAC Guidance Note sets out the regulatory framework applicable to general business insurers utilising segregated accounts and separate accounts. 

The SAC Guidance Note focuses on governance, risk management and financial reporting, and requires that the SAC insurers address the structure of segregated accounts in their governance and risk management frameworks, including detailing the segregation of duties, outsourcing arrangements, and conflict of interest management. Additionally, a schedule of segregated accounts and separate accounts now form a part of the statutory filings and must be included in the audit of financial statements of SAC Insurers.

RoC To Regulate Beneficial Ownership

The BMA has regulated beneficial ownership in Bermuda. However, the responsibility for the regulation and oversight of the beneficial ownership regime in Bermuda will now be the responsibility of the Registrar of Companies (RoC), who aims to establish a central register of beneficial ownership.

The RoC will assume responsibility to collect, verify and maintain the beneficial ownership information, including vetting beneficial owners during incorporation and ownership changes.

The BMA will continue to act as the regulator for financial institutions such as re/insurance companies and investment funds under the existing legislation.

BMA Initiative Contemplates A Digital Identity Service Provider Business

On 22 November 2024, the BMA published a consultation paper, Regulation of Digital Identity Service Provider Business (DISP). The DISP sets out a proposal for a DISP licensing regime.

The BMA has invited industry feedback on matters such as compliance with privacy law, cybersecurity risk security, and issues arising from continuing oversight and enforcement.

Regulators and corporations across the world are supportive of one-stop identity verification services due to the time spent and expense verifying the identities of those who wish to conduct or regulate business, or verifying their own identity to others.

Bermuda Trade Marks Act 2023

The introduction of the Bermuda Trade Marks Act 2023, previously expected to come into effect on 1 February 2025, has now been delayed. The new law significantly modernises Bermuda's existing trade marks regime. 

Key changes include:

• A new definition of ‘trade mark’ with no requirement for graphical representation, allowing for a broader range of applications.
• An increased term of initial registration from seven to 10 years.
• A reduced renewal term from 14 years to 10 years.
• The introduction of the 11th Edition of the Nice Classification of goods and services with retroactive effect from 1 January 2017, and the 12th Edition of the Nice Classification of goods and services with retroactive effect from 1 January 2023.
• The removal of the ‘split’ Part A and B registration system means all existing trade marks shall be transferred to the new register on commencement of the new legislation, regardless as to whether they are currently registered in Part A or Part B of the existing register.
• Protection for collective and certification marks, as well as protection for well-known trade marks under Article 6bis of the Paris Convention.
• Claims to Paris Convention priority will be honoured, and claims to priority from other relevant overseas applications in countries where the UK has entered into an agreement for reciprocal protection of trade marks, which has also been extended to Bermuda, will also be honoured.
• Access to International Applications in accordance with the Madrid Protocol upon Bermuda's accession.
• The removal of the associated trade marks regime.

Janice Gutteridge
Senior Associate. Janice practices in all areas of corporate and commercial law, advising a wide range of international and local clients. Janice’s primary areas of expertise are with respect to asset financings, particularly aviation and shipping financing, shipping and aircraft registration in Bermuda, and banking and finance transactions. Janice also has extensive experience advising on mergers and acquisitions of both local and international companies, the migration of corporate entities and partnerships into and out of Bermuda, partnership structures, including global restructuring projects involving Bermuda entities, the incorporation and establishment of Bermuda special purpose vehicles and establishing private trust companies. Janice joined CHW in 2007 and was admitted to the Bermuda Bar in 2008. Janice is a member of the WISTA Bermuda Branch and the Society of Trust and Estate Practitioners, Bermuda Branch. Janice is ranked as a Rising Star by IFLR1000 and by The Legal 500 in both of the corporate & commercial and banking, finance & capital markets categories.