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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 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 also encompasses prudential rules (including the Digital Asset Business (Client Disclosure) Rules 2018, the Digital Asset Business (Cybersecurity) Rules 2018, and the Digital Asset Business (Prudential Standards) (Annual Return) Rules 2018) which help to ensure that Bermuda is a leading jurisdiction in the regulation of digital assets and the regulatory regime is fit for purpose.

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The Investment Funds Act 2006 (IFA) was amended by the Investment Funds Amendment Act 2019 (IFA Revision) and became operative on 1 January 2020. The IFA Revision introduced some important changes to investment fund regulation in Bermuda with the intention of further strengthening the regulatory framework in Bermuda for funds. These changes are intended to address economic substance for collective investment vehicles which previously did not require any registration under the IFA or regulation by the Bermuda Monetary Authority (BMA) pursuant to the IFA. Consequently, closed-ended Bermuda investment funds and overseas investment funds which are managed or carry on promotion in or from within Bermuda are now required to seek registration or designation with the BMA during a transition period of 6 months. Our Memorandum considers these new categories together with some supplemental changes under the IFA Revision.

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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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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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The Digital Asset Business Amendment Act 2019 (DAB Amendment Act) was brought into force on 8 October 2019 and amends the Digital Asset Business Act 2018 (DABA) to adapt to market expectations and ensure the regulatory regime remains fit for purpose. The DABA legislation regulates digital asset business carried on in or from within Bermuda and protects the interests of clients or potential clients of persons conducting digital asset business. Amendments include the expansion of DABA to include clarity over market makers, digital asset benchmark administrators, digital asset trust services, and digital asset derivative exchange providers.

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This Guide provides a brief overview and gives general information relating to the law and procedures for the establishment and operation of investment funds in Bermuda. It has been prepared to assist parties interested in establishing an investment fund in Bermuda and to give a summary of the law and procedures relating to the establishment, operation and ongoing requirements under Bermuda law. It is not intended to be comprehensive but to provide an outline of the laws and regulations which we hope will be of use to our clients while deciding the type of structure that is appropriate for their business objectives.

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

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 guide to Fintech.

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Link to Comparative Guide

The Digital Asset Business Act 2018 (DABA) is Bermuda’s latest development in establishing a comprehensive legislative and regulatory framework designed to support and facilitate growth in the financial technology (Fintech) sector. Bermuda has implemented digital asset business legislation in the form of the Digital Asset Business Act 2018, as well as prudential rules including the Digital Asset Business (Client Disclosure) Rules 2018, the Digital Asset Business (Cybersecurity) Rules 2018, and the Digital Asset Business (Prudential Standards) (Annual Return) Rules 2018. The DABA legislation regulates digital asset business carried on in or from within Bermuda and protects the interests of clients or potential clients of persons carrying on the business of digital asset business.

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Stephanie P. Sanderson, Partner in the Corporate Department, discusses M&A trends and practices in Bermuda in the Lexology Navigator 2018.

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