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BERMUDA

INVESTMENT BUSINESS (PRUDENTIAL STANDARDS) (RECOGNISED BODIES) RULES 2024

BR 78 / 2024

73(1A) of the Investment Business Act 2003, makes the following Rules:

Citation

1 These Rules may be cited as the Investment Business (Prudential Standards) (Recognised Bodies) Rules 2024.

Interpretation

2 In these Rules—

“Act” means the Investment Business Act 2003.

Minimum capital to be maintained

3 For the purposes of section 73(1A) of the Act a recognised body shall be regarded as maintaining its recognition certificate if it maintains or, as the case may be, will maintain the minimum amount of capital prescribed by the Authority.

INVESTMENT BUSINESS (PRUDENTIAL STANDARDS) (RECOGNISED BODIES) RULES 2024

Capital to take specified form

4 For the purposes of rule 3, capital shall take the form of equity and comprise—

(a) common stock or share capital;

(b) contributed surplus;

(c) retained earnings or deficits; or

(d) any other reserves deemed eligible by the Authority for the purposes of this rule.

5. Liquid asset requirement

(1) For the purposes of section 73(1A) of the Act, a recognised body shall maintain a minimum of liquid assets of three months of the recognised body’s annual expenditure.

(2) In this paragraph, a recognised body’s “annual expenditure” shall be—

(a) based on the most recent annual or annualised financial statement or accounts filed by the recognised body with the Authority under section 73B(5) of the Act; and

(b) calculated where the recognised body made—

(i) a profit in the previous year, as total revenue less profit before appropriations; or

(ii) a loss in the previous year, as total revenue plus loss before appropriations.

(3) In this paragraph, “liquid assets” include—

(a) cash and cash equivalents (i.e. cash, term deposits and marketable securities);

(b) prepayments, where the period of prepayment is less than three months; and

(c) unsecured receivables, where these are outstanding for less than 30 days.

Notifying the Authority

6 A recognised body shall notify the Authority forthwith, where—

(a) it has breached any capital or liquidity requirement applicable to it; or

(b) it has reason to believe that it will breach any capital or liquidity requirement applicable to it.

INVESTMENT BUSINESS (PRUDENTIAL STANDARDS) (RECOGNISED BODIES) RULES 2024

7. Half-yearly return

(1) For the purposes of section 73(9) of the Act, a recognised body shall file half- yearly returns in electronic format containing information as provided in subparagraph

(3).

(2) If directed to do so by the Authority, a recognised body shall file with the Authority a hard copy of the half-yearly return filed in the electronic format pursuant to paragraph (1), on or before the date specified in the direction.

(3) A half-yearly return shall comprise—

(a) information in respect of the matters set out in the Schedule to these Rules, which is published separately on the Authority’s website, www.bma.bm;

(b) any additional information requested by the Authority in writing.

Commencement

8 These Rules shall come into operation on 29 July 2024.

Made this 25th day of July 2024

Chairman Bermuda Monetary Authority

[Operative Date: 29 July 2024]