Bermuda Investment Business License - Dealing in Investments_Guideline_V1

Bermuda Investment Business License Securities and investment business is regulated in Bermuda by the Investment Business Act 2003. Bermuda Monetary Authority regulates “investment business” in or from with the Bermuda and provides that no person may carry on “investment business” of any kind in or from within the Bermuda unless they are licensed by the Bermuda Monetary Authority to carry on such investment business. Permitted Activities The types of activity constituting investment business are broadly defined as follows:

1. Dealing in investments;
2. Arranging deals in investments;
3. Managing investments;
4. Providing investment advice;
5. Providing administrative services with respect to investments; and
6. Operating an investment exchange.

Categories and Sub-Categories of Investment Business License The following are the categories: Category 1: Dealing in Investments

1. Dealing as Agent
2. Dealing as Principal

Category 2: Arranging Deals in Investments Making or offering, or agreeing to make—

1. Arrangements with a view to another person buying, selling, subscribing for or underwriting a particular investment, being arrangements which bring about or would bring about the transaction in question;
2. Arrangements with a view to a person who participates in the arrangements buying, selling, subscribing for or underwriting investments.

Category 3: Investment Management Managing or offering, or agreeing to manage, assets belonging to another person where those assets consist of or include investments. Category 4: Investment Advice Giving or offering, or agreeing to give, to persons in their capacity as clients or potential clients, advice on the merits of their purchasing, selling, subscribing for or underwriting an investment, or exercising any right conferred by an investment to acquire, dispose of, underwrite or convert an investment. Category 5: Safeguarding and Administering Investments Category 5: Operating an investment exchange. Legal Requirements

Sr. No	Element	Requirement(s)
	Entity Requirements	The entity making the application is a company registered or incorporated in Bermuda or elsewhere and includes a partnership which is a body corporate. Company includes: a company limited by shares; a company limited by guarantee that is not authorised to issue shares; a company limited by guarantee that is authorised to issue shares;
	Director’s Requirements	The licensee will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction. A licensee shall not appoint a director or senior officer without the prior written approval of the Authority. The director must pass the fit and proper criteria
	Shareholder requirements	The licensee will need at least one shareholder. Corporate shareholding is allowed and 100% foreign ownership is permitted.
	Authorized Representative	Unless the licensee has a significant management presence in the Bermuda, it will be required to appoint a local “authorized representative”, which will be an individual certified by the Bermuda Monetary Authority for this purpose.
	Local Office	A licensee shall not, without the prior written approval of the Authority: open, maintain or carry on business through a branch or a representative or contact office outside the Bermuda; or incorporate, form or acquire a subsidiary.
	Auditor	The relevant licensee shall appoint and at all times have an auditor for the purposes of auditing its financial statements. The auditor must be: qualified under the Regulatory Code to act as the auditor of a licensee consent to act as auditor
	Insurance	A licensee shall at all times maintain such professional indemnity and other insurance as may be prescribed.
	Minimum Capital Requirements	Where the Regulatory Code prescribes a minimum capital resource requirement with respect to a category or sub-category of license, a licensee holding a license in such category or sub-category shall ensure that at all times its capital resources are maintained in an amount not less than the prescribed minimum.

Ongoing Obligations

1. The financial statements of a Licensee, signed by a director or trustee of a unit trust, must be submitted to the Bermuda Monetary Authority within six months of the end of its financial year accompanied by:
2. a director’s or trustee’s certificate in the approved form;
3. an auditor’s report;
4. a report on the affairs of the Licensee made in respect of the relevant financial year to the members or investors of the Licensee; and
5. such other documents as may be prescribed from time to time.
6. A Licensee must appoint and at all times have an authorised representative who shall be a person or entity resident in Bermuda and certified by the Monetary Authority, unless the Licensee has a significant management presence in Bermuda
7. A Licensee must appoint and at all times have an auditor for the purpose of auditing its financial statements whose appointment has been approved by the Bermuda Monetary Authority in writing prior to their appointment.
8. A Licensee must keep records for at least five years (even after the cancellation or revocation of a Licensee’s licence) which: (i) are sufficient to show and explain its transactions; (ii) allow its financial position to be determined with reasonable accuracy at any time; (iii) enable it to prepare such financial statements and make such returns as it is required to make under Investment Business Act 2003
9. A Licensee must ensure that client assets are identified or identifiable and appropriately segregated and accounted for and make arrangements for the proper protection of client assets.
10. Licensees must at all times maintain their business in a financially sound condition by: (a) having assets; (b) providing for its liabilities; and (c) generally conducting its business, so as to be in a position to meet its liabilities as they fall due.
11. Where the Regulatory Code prescribes a minimum capital resource requirement applicable to a category of licensee then a Licensee must ensure that at all times its capital resources are maintained in an amount not less than the prescribed minimum (or such other amount as may be specified by the Investment Business Act 2003).

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