BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen
shareholder controllers, promoters, service providers, and auditors (and other such infor - mation); • disclosure of any legal proceedings; • the name and nature of the project; • key features of the product or service to be developed; • a description of the project and proposed timelines, including any milestones; • the targeted digital asset acquirers and jurisdiction(s) (and any restrictions that apply); • the amount of money intended to be raised; • a description of the proposed offer, including the timing of opening and closing the offer; • two-year financial projections; • details and descriptions of the technologies being used; • a description of the risks associated with the issuance (and any mitigations against such in place); • details of the custodial arrangements in place; and • a description of the data and privacy protec - tions in place. 2.3 Compensation Models DABA licensees do not have any restrictions regarding the way in which they charge custom - ers, if the charges are applicable to their busi - ness model and are adequately disclosed. According to the Digital Asset Business (Client Disclosure) Rules 2018 (the “DAB Client Disclo- sure Rules” ), at the time of entering a contract for the provision of products or services, a DABA licensee must either provide the customer with a schedule of fees and charges for any service or product being given or – if such fees and charg - es are not set in advance and disclosed at the time the contract is entered into – disclose the manner in which fees and charges will be cal - culated and the manner in which payment is to
be made by the customer to the DABA licensee. Following the conclusion of the transaction with the customer, a DABA licensee must provide the customer with information relating to (among other things) the fee charged for transactions, including any charge for conversion of a digital asset to another digital asset or to fiat currency. 2.4 Variations Between the Regulation of Fintech and Legacy Players The regulatory model for legacy players in Ber - muda (eg, insurers, investment business provid - ers, or banks) is fundamentally the same as the fintech regulatory model. Persons conducting such activities “in or from within Bermuda” who are not exempted or excluded fall within scope of the relevant Bermuda regulatory regime and are generally required to obtain authorisation or approval from the BMA prior to conducting such activities. The fintech regulatory regime in Bermuda – namely, the DABA, the DAIA, and the relevant regulations promulgated thereunder – apply to all persons who are conducting a digital asset issuance or digital asset business in or from within Bermuda, regardless of whether or not such persons were conducting such activities prior to the inception of each statute. Bermuda established one of the world’s first dig - ital asset business bank licensing regimes that provides for a banking licence to be issued to persons seeking to provide traditional banking services to the digital asset sector and – when conjoined with a licence issued under the DABA – the legal and regulatory ability to offer tradi - tional banking services using digital assets. 2.5 Regulatory Sandbox Bermuda’s “regulatory sandbox” concept encompasses regulated activities across all
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