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Bermuda Announces Accounting Rules For Digital Asset Businesses

Jason Gorringe, Tax-News.com, London

10 July, 2020

The Bermuda Monetary Authority has released a new consultation on the proposed Digital Asset Business Accounts Rules 2020.

The rules are intended to add to the territory's existing regulatory regime. The BMA noted that while major accounting standard-setting bodies have initiated work in this area, there has been no comprehensive guidance issued to date for the digital asset sector to follow.

In light of this uncertainty, the Authority is proposing to introduce Digital Asset Business Accounts Rules 2020, to provide specific guidance to Digital Asset Business (DAB) registrants in Bermuda when preparing their Annual Statutory Financial Returns.

The Rules provide specific requirements to DABs as to the format in which the statutory balance sheet accounts are to be reported, and the disclosures required in the accompanying notes.

The rules supplement the existing regulatory regime for the sector, which includes:

  • The Digital Asset Business (Prudential Standards) (Annual Return) Rules 2018
  • Digital Asset Business (Cybersecurity) Rules 2018
  • Digital Asset Business (Client Disclosure) Rules 2018
  • Code of Practice that must be observed by DABs;
  • Digital Asset Custody Code of Practice;
  • Statement of Principles, which applies to the Bermuda Monetary Authority in its oversight of the sector; and
  • The AML/ATF Sector-Specific Guidance Notes for DAB.

The new rules cover:

  • The statutory financial return for the current financial year;
  • Contents of the statutory financial return;
  • Auditor's report;
  • Statutory balance sheet;
  • Accompanying notes to statutory balance sheet; and
  • Requirements relating to the preparation of statutory financial returns generally

It is proposed that the Rules will come into operation on December 31, 2020, and apply to financial years commencing on or after December 31, 2020.

TAGS: money-laundering | tax | tax avoidance | law | accounting | international financial centres (IFC) | offshore | United States | regulation |

 

 

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