BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale, Hannah Tildesley and Marah Smith, Walkers
applicable regime would depend on the amount of gross revenues derived from each activity. Certain derivatives are available for trading on the BSX (eg, derivative warrants). If a person wished to trade derivatives of a Bermuda company for its own account, it would need to utilise the services of a licensed broker/dealer and trading member of the BSX in the jurisdiction. 4.5 Filing/Reporting Obligations Except as described in 4.2 Material Shareholding Disclosure Threshold , there are no specific securi - ties disclosure requirements under the Companies Act, and there are no competition laws in Bermuda. Where an entity is registered or licensed to provide investment business or digital assets business ser - vices relating to derivatives, there would be both fil - ing and reporting obligations on the entity that is pro - viding such services to the BMA pursuant to the IBA and DABA, respectively, but these would apply to the entity rather than to any individual buyer or seller. Where a company lists derivative warrants on the BSX, there are obligations on the issuers to provide price-sensitive information to the holders. Details of any changes to the terms and expiry of the warrants and of any purchase, redemption or cancellation of the warrants (among other things) must be provided to the BSX. 4.6 Transparency Disclosure of the business purpose would be required if the applicant was seeking a Section 114B licence (ie, a local company was being acquired by foreign acquirers) or a Section 129A licence (ie, an exempted company proposing to conduct business in the juris - diction). Such application is submitted to the Minister of Finance in Bermuda and must outline the impact of the acquisition on the Bermuda economy, the advan - tages/disadvantages that may result from the busi - ness being carried on in Bermuda and the impact on Bermudians and their job prospects, amongst other factors that will be considered. If the company being acquired is regulated by the BMA or the Regulatory Authority, it is likely this will trigger
a notification to the regulator under the applicable regulatory act as a “change of shareholder control - ler”. In providing this notification, the target would be required to provide details of the potential purchaser, the reason for the acquisition, what is intended for the business post-acquisition, and such other information as may be required by the regulator. The regulator will have a period of time (typically three months) in which to serve a notice of objection to the change of shareholder controller. The existence of direct lines of communication regarding the acquisition process often leads to the change of control application being processed prior to the expiry of the requisite time peri - od, and this is often a precondition to any acquisition of a regulated entity in the jurisdiction. Public disclosure is not required under the Companies Act. However, if the company is listed on the BSX, it may be required to disclose certain information to the public. The target company would have to keep the BSX informed of any information relating to it that: • is necessary to enable the BSX and the public to appraise the financial position of the company and the group; • is necessary to avoid the establishment of a false market in its securities; and 5. Negotiation Phase 5.1 Requirement to Disclose a Deal • might reasonably be expected materially to affect market activity in and the prices of its securities. Regulatory notifications (if required) would need to be made and non-objection obtained from the applicable regulator before the transaction may complete. 5.2 Market Practice on Timing If listed on the BSX, the target company must keep members of the issuer and any holders of its listed securities informed without delay. In practice, this will be satisfied by way of public announcement or circu - lars of the information being provided, as set out in detail in 5.1 Requirement to Disclose a Deal .
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