BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen
6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms Digital Asset Exchange/Digital Asset Derivative Exchange Digital asset exchanges and digital asset deriva - tive exchanges are permissible and the opera - tion of both are regulated under the DABA. There are no material differences between the require - ments applicable under the DABA to these two different types of platforms. A digital asset exchange is a centralised or decentralised electronic marketplace used for digital asset issuances, distributions, conver - sions and trades (including primary and second - ary distributions) with or without payment. These may include digital asset conversions and trades entered into by the electronic marketplace as principal or agent. A digital asset derivative exchange means a cen - tralised or decentralised marketplace used for digital asset derivative issuances, distributions and trades with or without payment, which may include digital asset derivatives trades entered into by the marketplace as principal or agent. A digital asset derivative means an option, a swap, a future, a contract for difference or any other contract or instrument whose market price, val - ue or delivery or payment obligations are derived from, referenced to or based on a digital asset underlying interest. Insurance Marketplace Provider The Insurance Act also licenses the operation of a platform, of any type, established for the purpose of buying, selling or trading contracts of insurance. Such licensed activities may be done in a traditional manner or through the insurtech
sandbox as an innovative insurance marketplace provider. Bermuda Stock Exchange In relation to the general trading of securities of publicly listed companies in Bermuda, the Ber - muda Stock Exchange ( “BSX” ) is the primary trading platform. Traditional securities of all types can be listed on the BSX, provided they meet the application and maintenance require - ments of the BSX Listing Regulations. 6.2 Regulation of Different Asset Classes See 6.1 Permissible Trading Platforms . 6.3 Impact of the Emergence of Cryptocurrency Exchanges See 6.1 Permissible Trading Platforms . 6.4 Listing Standards Traditional securities that are listed on the BSX must meet the standards and requirements set out in the BSX Listing Regulations. The principal function of the BSX is to provide a fair, orderly and efficient market for the trading of securities of both domestic and foreign issuers and the BSX is itself regulated by the BMA. In contrast, digital asset exchanges and digital asset derivative exchange providers are all regu - lated under the DABA and are required to con - duct their business in a prudent manner. Specifi - cally, in relation to the listing of digital assets and digital asset derivatives, there are no definitive regulatory criteria for exchanges to adhere to other than in relation to seeking BMA approval to introduce a new product or service. The stand - ards by which each licensed entity chooses to list different products will be set and maintained by that licensed entity as part of their applica - tion for a licence. The general overview of such standards must be included in and approved
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