BERMUDA Law and Practice Contributed by: Bourn Collier and Sharon A. Beesley, BeesMont Law Limited
At the time of writing the BMA has conducted a con- sultation in respect of Asset Tokenisation and in a recently published consultation paper it considered new guidance to allow investment fund and invest- ment business licensees to issue digital assets, dis- cussed further on in this chapter. 2.4 Token Issuance See 2.3 Regulated Firms and Legal Wrappers . As noted, both DABA and DAIA allow for licensed issu- ance of digital assets. DAIA licensing is for issuances for the purpose of firms raising investment capital for the purposes of the respective business whilst DABA licensing for the issuance activity relates to use cases where issuance of digital assets by way of business. White Paper and disclosure requirements (in respect of a Bermuda-based issuer) are specified in DABA/ DAIA, while for overseas institutions marketing into Bermuda, the advertising and promotion rules would be applicable (see 4.1 Marketing ). 2.5 Market Abuse Bermuda does not have a dedicated insider-dealing offence or comprehensive market-abuse regulation equivalent to those found in the United Kingdom, the European Union or the United States. The Bermuda Stock Exchange’s Listing Regulations contain market-conduct expectations and disclosure obligations on listed issuers, including a requirement under Regulation 6.8 of the Debt Listing Regulations 2026 for issuers to notify the Exchange of formal legal or regulatory proceedings for market abuse and finan- cial crime, and disciplinary powers exercisable by the Exchange against issuers and directors under Regula- tions 7.30 and 7.31. The Proceeds of Crime Act 1997 captures the pro- ceeds of foreign insider dealing as a predicate offence under its dual-criminality test (Section 3) only where the same conduct would have constituted an indict- able offence had it occurred in Bermuda – usually requiring the conduct to involve fraud, deception, breach of fiduciary duty or another element capable of grounding a Bermuda indictable offence.
As part of its guidance and forward positioning the BMA requires that DABA licensees articulate a mar- ket surveillance framework. BMA Guidance states that they should outline the tools and systems used to monitor trading activities, along with processes for identifying and investigating suspicious patterns. They should provide dedicated resources for market surveillance, with protocols in place for addressing market abuse once identified, ensuring a robust and responsive system. In its recent consultation on Asset Tokenisation (detailed further on in this chapter), the BMA made some granular observations as to the expectations of Primary Tokenisers and Secondary Offerors Regard- ing market abuse systems and controls. 2.6 Non-Compliance The BMA has wide-ranging enforcement powers under DABA and DAIA, which include issuing direc- tions, restrictions and conditions, appointing investi- gators, imposing civil penalties of up to USD10 million, publishing public censures, making prohibition orders against individual directors and officers found not to be fit and proper and applying for injunctions. The BMA exercises its powers in accordance with its Statement of Principles and Guidance on the Exer- cise of Enforcement Powers. The Statement sets out the BMA’s general approach to deciding when to use its enforcement powers and the factors weighed in any particular case – including the seriousness of the breach, customer impact, the licensee’s co-operation with the regulator, prior compliance history and the deterrent effect of the proposed measure. See 1.2.5 Insolvency in respect of cross-border co- operation. 3. Licensing and Set-Up Requirements 3.1 Licensing Requirements Any company wishing to carry out digital asset busi- ness will require the consent of the BMA and the grant of a licence pursuant to DABA. A detailed compre- hensive digital asset business application must be
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