The Bermuda Monetary Authority has published a consultation paper and illustrative draft bill proposing wide-ranging amendments to the Banks and Deposit Companies Act 1999. The package would make prudential and technical standards and statutory returns enforceable through rules, introduce fixed late fees for overdue returns and audited financial statements, raise the maximum civil penalty for other breaches from BMD 500,000 to BMD 10 million, and add new notification and no-objection requirements for material business changes and operational resilience. The paper does not propose changes to existing prudential standards, large exposure requirements or reporting templates. Under the proposals, banks and deposit companies would need to notify the BMA and obtain a no-objection before outsourcing important business services, entering material outsourcing arrangements, changing licensed products or services, or making a material change to their business plan. Firms would also have to notify the BMA within 24 hours of becoming aware of a breach of an operational resilience impact tolerance threshold. The BMA would gain power to impose, vary or revoke licence conditions across all licence classes, late filings of statutory returns and audited financial statements would move to a BMD 1,000 per week fee regime, applications for exemptions or modifications to prudential or technical requirements would carry a BMD 1,500 fee, and the Act would be updated to let the BMA petition to wind up firms that have surrendered licences and to Gazette licence surrenders. The BMA expects to issue supporting monthly, quarterly, semi-annual and annual statutory return rules in 2026. Comments are due by 3 July 2026. The Operational Resilience and Outsourcing Code is scheduled to take effect for Banks and Deposit Companies Act licensees on 1 January 2027, and the draft bill would also repeal the separate Banks and Deposit Companies Fees Act 1975 from that date, with wider commencement to be set by notice.
Bermuda Monetary Authority2026-06-03
Bermuda Monetary Authority launches consultation on banking law overhaul with BMD 10 million civil penalty cap and operational resilience notifications
The Bermuda Monetary Authority has issued a consultation paper and draft bill proposing wide-ranging amendments to the Banks and Deposit Companies Act 1999, including making prudential and technical standards and statutory returns enforceable through rules and introducing fixed late fees for overdue returns and audited financial statements. The proposals would raise the maximum civil penalty for breaches from BMD 500,000 to BMD 10 million, introduce new notification and no-objection requirements for material business changes and outsourcing, and expand the BMA’s powers to impose licence conditions and petition to wind up firms that have surrendered licences. The BMA plans to issue supporting statutory return rules in 2026, and the draft bill would repeal the Banks and Deposit Companies Fees Act 1975 when the Operational Resilience and Outsourcing Code takes effect on 1 January 2027.