BERMUDA Law and Practice Contributed by: Ian Stone and Leo Shaw, Wakefield Quin Limited
shareholders to notify the company when their hold - ings cross specified thresholds. This may also be required under the listing rules of an exchange. Under Sections 8 and 11 of the BOA, a company may give notice to a shareholder to provide beneficial own - ership information. If the bye-laws allow and informa - tion is not provided, under Section 17 of the BOA the company may issue a warning notice and decision notice prior to imposing restrictions on the relevant shareholder. Where the bye-laws do not allow this, the company must apply to court to issue warning and decisions notices, as well as impose restrictions. The BOA requires all legal persons in Bermuda to identify and maintain records of their beneficial owner, generally being any individual owning 25% or more of a company. This information is filed with the ROC. The central register is not publicly accessible but is availa - ble to government authorities and AML/ATF regulated entities. There is an exemption for any entity listed on the BSX or another appointed stock exchange. For registered insurers, the Insurance Act 1978 impos - es a separate shareholder disclosure regime that oper - ates independently of any listing rules. A “shareholder controller” is defined broadly to include any person who holds 10% or more of the shares carrying voting rights in a registered insurer or its parent company. There are four control bands:
In both cases, a shareholder controller must also notify the BMA when disposing of shares such that the person’s holding falls below any of those thresh - olds (Section 30EA). The BMA may object to a new or increased level of control if it is not satisfied that the person is fit and proper to be a controller (Section 30F) and contravention of the notification requirements is an offence. 5. Corporate Reporting and Disclosures 5.1 Financial Reporting Requirements Under Section 83 of the Companies Act, every com - pany must keep proper books of account sufficient to give a true and fair view of its affairs and explain its transactions. Every company must present financial statements to its shareholders at each AGM, or circulate them if AGMs have been dispensed with. The Companies Act does not prescribe a specific accounting stand - ard; companies commonly adopt US GAAP, IFRS or other recognised standards depending on their cir - cumstances and listing requirements. There is no obligation under the Companies Act to file accounts with the ROC. Pursuant to Section 88 of the Companies Act, a com - pany may waive the laying of accounts before the gen - eral meeting and the appointment of an auditor. The waiver requires the unanimous consent of the board of directors and members of the company. Regulated entities are subject to additional financial reporting requirements imposed by the BMA and applicable sector-specific legislation. Insurance com - panies, for example, must file audited financial state - ments and statutory financial returns with the BMA annually. 5.2 Corporate Governance Arrangement Disclosure There is no general requirement under the Compa - nies Act for companies to disclose their corporate governance arrangements. Companies listed on the BSX are subject to the disclosure requirements of the
• 10% or more but less than 20%; • 20% or more but less than 33%; • 33% or more but less than 50%; and • 50% or more.
Where the shares of the insurer (or its parent) are not traded on a recognised stock exchange, a person is prohibited from becoming a shareholder control - ler at any of those thresholds unless the person has first served written notice on the BMA (Section 30D). Where the shares are traded on a recognised stock exchange, prior consent is not required, but the per - son must notify the BMA in writing within 45 days of becoming a 10%, 20%, 33% or 50% shareholder controller (Section 30E).
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