Bermuda: Business Environment
Banking and Financial Services
This page was last updated on 5 August 2019.
Due to the long-time exclusion of foreign banks, classical banking services in Bermuda were provided primarily by the three established Bermudian banks, until the biggest of them, Bank of Bermuda, was taken over by HSBC in March 2004. These banks had in fact developed adequate international correspondent networks, and had some overseas branches. Foreign involvement was allowed in more sophisticated financial services such as securities issuance and custody, and such services are increasingly available via the internet, reducing reliance on the local financial infrastructure.
Foreign-controlled firms can nowadays freely provide financial services (other than deposit-taking) internationally, but the Bermudian government is protectionist towards local activities, requiring 60% local ownership unless special permission is given. There are currently 11 trading members of the stock exchange, most being locally-owned firms, and several of them can sponsor listing. A number of foreign firms are providing electronic brokerage, dealing and trading services internationally, alongside the stock exchange, and in some cases with its involvement.
In August, 2008, following lengthy consultation with industry, the Bermuda Monetary Authority (BMA) published the 'Revised Framework for Regulatory Capital Assessment', which sets out in a single policy document the final rules for implementation in Bermuda of pillars 1 and 2 of the new Basel II international capital accord.
The BMA also published the new reporting form and guidance notes that institutions must use from 1st January 2009 to calculate and report their capital requirements to the Authority.The one remaining element of the Authority's Basel II policy was its approach to market discipline and disclosure - Pillar 3 of the new accord and this was incorporated in the Revised Framework for Regulatory Capital Assessment later in 2008. These new arrangements for setting minimum capital requirements for institutions caught within scope (mainly banks but also applies to some investment firms) came into effect on 1 January 2009.