All trustees conducting trust business in Bermuda are required to be licensed by the Bermuda Monetary Authority (BMA) pursuant to the Trusts (Regulation of Trust Business) Act 2001 (2001 Act), unless otherwise exempted. In addition licensed trustees in Bermuda must adhere to the trust business Code of Practice (Code) issued pursuant to section 7 of the 2001 Act and the Statement of Principles issued pursuant to section 6 of the 2001 Act.

Key Changes

The Amendment Act introduces the following changes to the 2001 Act:

  • New section 4B – To require that a physical presence in Bermuda is maintained by all licensed undertakings and that the trust business is directed and managed from Bermuda. The BMA has acknowledged that a licensed undertaking might reasonably require the holding of some meetings or operations outside of Bermuda, or the inclusion of directors, controllers or employees not resident in Bermuda. The BMA has confirmed that this is acceptable, provided that persons located outside Bermuda remain available to the BMA when required and the record-keeping provisions of the Code are followed;
  • Amended section 22 – To empower the BMA, where deemed appropriate, to restrict surrender of a licence by a licensed undertaking;
  • New section 47A – To require each licensed undertaking holding client funds, to segregate such funds from its own funds;
  • New section 57A – To empower the BMA to make prudential rules;
  • New sub-paragraph 6A in First Schedule – To enhance the minimum criterion for licensing by requiring the maintenance of adequate liquidity; and
  • To provide for consequential amendments.

Exemption from Licensing

The Trusts (Regulation of Trust Business) Exemption Order 2002 (Exemption Order) sets out the instances where a trustee is not required to hold a licence under the 2001 Act. A trustee is not required to be licensed where the trustee is:

  • A private trust company (PTC);
  • A member of a professional body in Bermuda recognized by the Minister of Finance who holds a certificate issued for those purposes by that body;
  • A professional person who appoints a specified licensed trust company (as defined in the Exemption Order) to maintain trust records of the trust of which he is a trustee;
  • A bare trustee; or
  • A trustee of a registered pension fund or certain approved collective schemes.

Changes have also recently been made to the Exemption Order with the passing of the Trusts (Regulation of Trust Business) Exemption Amendment Order 2019 (Amendment Order) which came into force on 31 December 2019. Trustees who are seeking to be exempted from licensing pursuant to the 2001 Act are now required to apply for an exemption, and in the case of PTCs to declare on or before 31 March in every year that they continue to qualify for exemption. The BMA has stated that it does not intend to introduce a full licensing regime or annual fee for PTCs, as is done in other jurisdictions. Instead the changes will simply allow the BMA to monitor the activities of PTCs without introducing unduly burdensome regulation. This will ensure that Bermuda remains a competitive jurisdiction for the formation of PTCs and trust structures.

Share
Twitter LinkedIn Email Save as PDF
More News
26 Jul 2021 | News

Appleby Receives High Rankings in Chambers’ Annual High Net Worth Guide 2021

Lawyers from Appleby’s Bermuda, Cayman Islands and Jersey Private Client & Trusts practices ha...

30 Jun 2021 | News

Appleby team helps restore Warwick Pond’s native Bermudian ecosystem

Leading offshore law firm Appleby organised an employee volunteer day at Sherwin Nature Reserve to s...

11 Jun 2021 | News

Appleby And AGS To Sponsor And Speak On ESG And LATAM Panels At Bermuda Captive Conference

Appleby and Appleby Global Services (AGS) are pleased to once again sponsor the annual Bermuda Capti...

Contributors: Eduardo Fox
27 May 2021 | News

Appleby And AGS Bermuda Featured As Sponsors And Speakers At International Trusts Conference

Appleby and Appleby Global Services (AGS) are pleased to once again sponsor the Transcontinental Tru...

Contributors: Caljonah Smith
21 May 2021 | News

Appleby Global Services to sponsor 46th Bermuda Festival of the Performing Arts

Appleby Global Services (AGS) Bermuda are pleased to once again sponsor the Bermuda Festival of the ...

22 Apr 2021 | News

Appleby Donates $25,000 to Bermuda Hospital Vaccination Clinic

Leading offshore law firm Appleby has donated $25,000 to the Bermuda Hospitals Charitable Foundation...

8 Apr 2021 | News

Appleby’s top tier Regulatory practice in Bermuda expands its Compliance Services

Appleby’s market-leading Regulatory practice, which is the only firm in Bermuda ranked in Tier 1 b...

6 Apr 2021 | News

Appleby’s top tier Regulatory practice in Bermuda expands its Compliance Services

Leading offshore law firm Appleby has expanded its Compliance Services in Bermuda. Appleby’s marke...

Contributors: Jarion Richardson
31 Mar 2021 | News

Appleby announces new Partner and Counsel promotions

Appleby announces the promotion of three Partners and the appointment of five lawyers to the positio...