The Bermuda Monetary Authority Act 1969
The Bermuda Monetary Authority Act 1969 (Act) establishes the Bermuda Monetary Authority (BMA) as a corporate body with perpetual succession. Its primary objectives include issuing and redeeming Bermuda's currency, supervising and regulating financial institutions, promoting financial stability, detecting and preventing financial crimes, and advising the government on monetary matters. The BMA also oversees innovative business development through its Innovation Hub.
Governance and structure
The BMA is governed by a Board of Directors, comprising executive and non-executive members, including a Chairman appointed by the Minister of Finance. The Board determines the BMA’s policies and strategies, while non-executive members oversee compliance with these policies. The Act provides immunity to officers acting in good faith and allows delegation of powers to committees or officers.
Currency and reserves
The Act establishes the Bermudian dollar as the national currency, pegged to parity with sterling or other currencies as determined by the Governor. The BMA has the sole authority to issue currency notes and coins, which are legal tender. It must maintain external and local reserves equivalent to at least 50 per cent of its currency liabilities.
Supervision of financial institutions
The BMA is empowered to supervise, regulate, and inspect financial institutions operating in Bermuda. It enforces compliance with anti-money laundering and anti-terrorist financing laws and assists foreign regulatory authorities. The Act also mandates the collection of fees from financial institutions for licensing and regulatory services.
Innovation hub
The Act introduces provisions for an Innovation Hub to support innovative financial businesses. Entities can apply for authorisation to operate within the hub, subject to fees and confidentiality requirements.
Financial management and reporting
The BMA is required to maintain a general reserve and submit annual budgets and audited financial statements to the Minister. It must publish an annual report and monthly statements of its assets and liabilities.
Enforcement and penalties
The Act outlines penalties for non-compliance, including fines and imprisonment for offences such as providing false information, failing to furnish required data, or breaching confidentiality. It also grants the BMA powers to assist foreign regulators and enforce compliance with international standards.
Amendments and updates
The Act has undergone numerous amendments to address evolving financial regulations, including the introduction of digital asset business oversight, enhanced prudential standards, and expanded powers for innovation and international cooperation.
This legislation forms the cornerstone of Bermuda’s financial regulatory framework, ensuring stability, transparency, and compliance with global standards.
Further reading
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