Guide to Bermuda’s Digital Asset Business Regulatory Regime

Bermuda successfully launched the Digital Asset Business Act (DABA) in 2018 which established the foundation for a comprehensive legislative and regulatory framework designed to support and facilitate growth in the financial technology (Fintech) sector. The digital asset business regulatory regime was updated in 2020 to provide clarity around digital asset exchanges and derivative exchange providers as well as to introduce an additional class of licence allowing applicants to select from these licence categories:

  • class F licence under which a person will be licensed to provide any or all of the digital asset business activities under the definition of digital asset business;
  • class M licence, under which a person will be licensed to provide any or all of the digital asset business activities under the definition of digital asset business for a defined period determined by the Authority; or
  • class T licence, under which a person will be licensed to provide any digital asset business activity under the definition of digital asset business, for a defined period determined by the Authority and for the purpose of carrying out pilot or beta testing in relation to such activity.

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Bermuda Business Vehicles

This Memo sets out some of the main Bermuda business vehicles and briefly summarises key points in relation to each type of vehicle. It includes information on exempted companies, local companies, LLCs, companies limited by guarantee, partnerships, SACs/ISACs, permit companies, trusts, and investment funds.

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Bermuda Chapter of Getting The Deal Through: Corporate Governance

Stephanie P. Sanderson has authored the Bermuda chapter of Getting the Deal Through: Corporate Governance, an international publication. The 2020 edition of Corporate Governance provides a summary of the pertinent aspects of company law and corporate governance practices worldwide touching upon: sources of governance rules and practice, government agencies, rights of shareholders, voting rights and requirements, shareholders’ duties and liability, anti-takeover devices, directors’ standard of care, economic substance requirements, as well as various other important corporate governance matters.

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Bermuda Chapter of Getting the Deal Through: Public M&A

Stephanie P. Sanderson, Partner, has authored the Bermuda chapter of Getting the Deal Through: Public M&A, 2020 edition. This specialist international publication covers M&A transactional requirements and procedures governing publicly listed companies, covering such areas as: types of business combinations, applicable legislation, filings and public disclosure requirements, substantial shareholding regulations, duties of directors and controlling shareholders, shareholder rights of approval and appraisal, and hostile transactions, among other key topics.

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Bermuda Law Guide: Data Protection in the Time of COVID-19

Gretchen Tucker has authored a COVID-19 Data Protection Guide which provides a detailed overview of the activities of Bermuda’s first Privacy Commissioner, Mr. Alexander McD White. The Guide summarises the work of the Office of the Privacy Commissioner during the first effective year of Mr. White’s appointment and informs Bermuda organisations and overseas companies interested in establishing a Bermuda office on privacy developments and industry engagement during the pandemic.

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Economic Substance Reporting

Bermuda’s Economic Substance Portal launched as of 1 May 2020 to provide a reporting platform for filings from entities that are required to file declarations under the economic substance regime in the jurisdiction which impacts companies that carry on ‘Relevant Activities’, including banking, insurance, fund management, financing, leasing, headquarters, shipping, distribution and service centres, intellectual property and holding entities.

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BeesMont Law Authors Bermuda Chapter for Legal 500 Fintech Global Guide

Stephanie P. Sanderson, Alexandra Fox, and Kit Cunningham recently authored the Bermuda Chapter of the Legal 500 Global Guide to Fintech (2nd Edition).

This country-specific Q&A provides an overview to Fintech law in Bermuda. It covers open banking, regulation of data, cryptocurrencies, blockchain, AI and insurtech. The Q&A is part of the global comparitive guide to Fintech.

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Link to Comparative Guide


Bermuda Introduces Incorporated Segregated Account Companies

The Incorporated Segregated Accounts Companies Act 2019 received assent on 26 November 2019, introducing a new company structure product – the incorporated segregated account company (ISAC). This legislation has been developed to create a new and innovative product to meet the needs of business stakeholders in Bermuda. In an ISAC structure, each segregated account constitutes an incorporated entity distinct from the other incorporated segregated accounts within the same structure. The premise that incorporated entities enjoy separate legal personality is a widely accepted and upheld legal principle. The ISAC provides greater certainty via a statutory and common law basis for the segregation of assets and liabilities by creating separate bodies corporate.

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Intellectual Property in Bermuda

Bermuda is a large Intellectual Property (IP) centre as its developed, and business focus, and infrastructure have created an allure and need for an IP framework. Many well-known brands and companies are represented and conduct business in Bermuda. Traditionally, many multinational and blue chip companies have benefitted from utilising Bermuda strategically to capitalise on particular tax benefits. A typical structure would result in a Bermuda-based company collecting fees and other revenue associated with the intellectual property they hold and to the repatriation of funds in accordance with Bermuda’s strategic legislative framework. Although recent economic substance requirements have created the need for a company to show economic substance in Bermuda, many companies subject to the economic substance requirements see the benefit of remaining in Bermuda and implementing substance within the jurisdiction to support the advantages offered by Bermuda’s IP framework. The prevalence of a global economy has made IP protection essential in this technological age. The continued growth, use, and development of the internet, technology and their associated goods and services, has led to the erosion of traditional geographical borders. As a result, it can be difficult to determine the origin of such goods and services and easier for fraudsters to pass off their goods and/or services.

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Bermuda Monetary Authority Publishes Notice on Cannabis Related Risk

In a Notice dated 12 November 2019, the Bermuda Monetary Authority confirmed that it will not object to BMA-supervised entities conducting business with licensed cannabis cultivators, processors or sellers, as long as the conduct of such business is not contrary to any offences that may be provided for in the laws of a foreign jurisdiction which amount to “criminal conduct” within the meaning of section 3 of the Proceeds of Crime Act 1997 of Bermuda. The Notice will be of particular interest to investment managers and investment funds in this sector (or that are interested in establishing in the sector) as it provides additional clarification that the establishment and registration of funds with investment strategies linked to the cannabis industry are permitted provided the activities are legal where business is being conducted and do not amount to criminal conduct under Bermuda law.

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