CD&P Provides Clarification On New Bermudian Investment Business Act

by Amanda Banks, for LawAndTax-News.com, London

15 March 2004

International offshore law firm, Conyers Dill and Pearman has published clarification with regard to the Bermudian Investment Business Act 2003, which came into force at the end of January.

According to CD&P, which is headquartered in Bermuda, although the new legislation is similar in nature to the 1998 Investment Business Act, it contains several key changes, including a provision that any person undertaking investment business in or from Bermuda must hold a licence from the Bermuda Monetary Authority (BMA), unless they qualify for an exemption.

Entities with no physical presence in the jurisdiction will not be required to obtain an investment business licence.

The law firm went on to reveal that the 2003 Act provided detail on the enforceability of agreements made in contravention of the requirement to obtain a licence, clarified exclusions from the scope of the IBA, and announced the introduction of a regulatory regime for unsolicited calls.

In a recent analysis of the IBA, CD&P associate, Benjamin Dyer explained that:

"The IBA will prohibit persons from entering into an investment agreement with an individual in the course of or in consequence of an unsolicited call made on that person."

Writing with regard to the 2003 Act as a whole, Mr Dyer observed that:

"Generally, the introduction of the IBA 2003 brings regulation of licensed investment business entities in Bermuda in line with international standards. In addition, the IBA 2003 clarifies certain aspects of Bermuda's financial services regulatory regime," and concluded:

"The passing of the IBA 2003 by the Bermuda legislature further consolidates Bermuda's position as one of the world's premier offshore jurisdictions. It represents Bermuda's continued maintenance of international standards of regulation while encouraging commerce through a common sense approach to regulation."

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