BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen
for itself, making allowances for the size of the transaction (and other allowances). The BMA has not published any specific guid - ance on best execution for regulated digital asset business entities. However, the BMA will consider the method(s) for execution and set - tlement as part of the licensing application pro - cess.
assets with or without interest or premium on a future date or when requested to do so by the lender; and • a person facilitating, either as principal or agent, digital asset repurchase transactions by which a person transfers digital assets to a counterparty subject to a commitment to repurchase such digital assets (or substituted digital assets of the same description) from that counterparty at a specified price with or without premium on a future date specified or to be specified. The counterparty in the above-mentioned cir - cumstances can be any type of person or entity. As mentioned in 2.4 Variations Between the Regulation of Fintech and Legacy Players , Bermuda also introduced one of the world’s first digital asset business bank licensing regimes that provides for a banking licence to be issued to persons seeking to provide traditional banking There are no additional requirements for the underwriting of digital assets, other than com - pliance with regulations under the DABA and the Banks Amendment Act mentioned in 2.12 Review of Industry Participants by Parties Oth- er than Regulators , as applicable (assuming the underwriting process does not fall within scope of the Insurance Act). A person conducting digi - tal asset lending will be required to deliver details of risk management and controls to the BMA. Additionally, to the extent the assets transferred to an underwriter constitute equity securities, the Exchange Control Act 1971 of Bermuda will apply. services to the digital asset sector. 4.2 Underwriting Processes
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
The BMA regulates the business of lending fiat under the Banks and Deposit Companies Act 1999 and relevant regulations (collectively, the “Banks Act” ). Under the Banks Act Code of Con - duct, licensed banks and deposit-taking com - panies are required to identify and implement policies and procedures to accommodate and afford reasonable care to an individual who is identified as vulnerable or who discloses these needs to the institution. Otherwise, the Banks Act does not differentiate between the business of lending to individuals, small businesses, or others. Additionally, in 2023, operating as a digital asset lending provider and operating as a digital asset repurchase transactions service provider were included as separate regulated digital asset activities under the DABA. These categories (respectively) encompass circumstances where: • a person facilitating, either as principal or agent, digital asset lending transactions by which a counterparty transfers or lends digital assets to a borrower subject to a commitment that the borrower will return equivalent digital
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