Bermuda Regulator To Add Conduct Oversight To Mandate
Mike Godfrey, Tax-News.com, Washington
31 August, 2020
The Bermuda Monetary Authority (BMA) has recently released a discussion paper on its plans to broaden its mandate by developing a conduct of business regime for the financial services sectors it regulates.
The BMA said the release of the discussion paper is intended to begin talks with the financial services sector on its proposals to increase consumer protections, focusing on retail investors, rather than wholesale consumers.
The paper notes international work in this area, including by the International Organization of Securities Commissions (IOSCO), which has been endorsed by the G-20 and OECD.
The paper says that Bermuda will look at the model in place in Ireland, where the Central Bank of Ireland has responsibility for both prudential regulation and conduct of business and consumer protection concerns for multiple sectors including banking, insurance and securities.
The BMA said: "Given the size and scale of Bermuda's financial services market, this would likely be the model Bermuda will follow, where the Authority will be the integrated financial services regulator." It added: "Following the research outlined above, the Authority formed the view that in order to be effective, Bermuda's consumer protection regime must cater for both retail and wholesale consumers. The Authority considers it pragmatic to first focus on the conduct of financial services firms catering primarily to retail consumers as opposed to those serving wholesale counterparties."
Discussed in greater depth in the discussion paper, the BMA has said the regime will be centered around ensuring:
- Fair and equitable treatment of consumers;
- Responsible business practices;
- Disclosure and transparency;
- Protection of consumer assets against loss, fraud, and misuse;
- Dispute resolution mechanisms; and
- Financial education and awareness for retail consumers.
The discussion paper, A Conduct of Business Regulatory Framework for Bermuda, concludes with two surveys for financial institutions and consumers to complete, to provide input towards the development of the new regime.
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