Financial Crime World

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Bermuda’s Regulatory Environment

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The following information is based on a legal briefing document from Bermuda’s regulatory environment.

Regulatory Environment

Key Points Summarized

  • There is no special regime for globally systemically important banks under the Bermuda regulatory regime.
  • The Banking and Monetary Authority (BMA) can impose civil penalties, publicly censure, make prohibition orders against banks, and publish information about any matter to which a decision notice relates.

Resolution Regime

Overview

In 2016, the Banking (Special Resolution Regime) Act was passed in Bermuda. The resolution regime relies on prudential regulation and supervision of the BMA through the Banking (Special Resolutions Regime) Act 2016.

Asset Protection

  • There is no deposit insurance scheme in Bermuda.
  • Banks are required to maintain adequate liquidity, having regard to their actual and contingent liabilities.

Bail-in Tool

A bail-in tool has not been implemented in the banking resolution regime in Bermuda.

Capital Requirements

Overview

The BMA adopts CET1 as the primary form of regulatory capital. Tier 2 capital provides an additional measure of regulatory capital on a “gone concern” basis.

  • The inception of the digital asset business regulatory regime has drawn significant attention from Fintech organizations.
  • A sandbox regime is being proposed to facilitate innovation in various industries, including banking and insurance.