New Corporate Governance Requirements for Trustees, Investment Providers and Fund Administrators
About Brian Holdipp
Brian Holdipp is Counsel in the firm’s corporate practice group. His practice encompasses many areas of general corporate and commercial law, with specialist expertise in securities, joint ventures, corporate restructurings and cross-border financings. Mr. Holdipp also advises on partnerships.
Brian Holdipp’s full profile on mjm.bm.
Recently, the following Orders were enacted to add a dedicated corporate governance licensing criterion to the Trust (Regulation of Trust Business) Act 2001, the Investment Business Act 2003 and the Investment Funds Act 2006 (collectively, the “Regulatory Acts”):
- Trusts (Regulation of Trust Business) Amendment Order 2014 (50 KB PDF);
- Investment Business Amendment Order 2014 (50 KB PDF); and
- Investment Funds Amendment Order 2014 (50 KB PDF)
The Orders, which came into effect in January, require those licensed under the Regulatory Acts — namely, professional trustees, investment providers and fund administrators — to implement corporate governance policies and processes as the Bermuda Monetary Authority considers appropriate given the nature, size, complexity and risk profile of the business.
The Orders call for the business to be effectively directed by at least two individuals or, if so approved by the Bermuda Monetary Authority having regard to the circumstances and the nature and scale of operations of the business, by one person.
The last change brought into effect by the Orders mandates the appointment of such number of non-executive directors as the Bermuda Monetary Authority considers appropriate given the nature, size, complexity and risk profile of the business.
All institutions licensed under the Regulatory Acts are required, as a minimum criterion of licensing, to conduct business in a prudent manner. These new requirements underscore the importance of a robust corporate governance framework to a prudently run business, while also demonstrating Bermuda’s ongoing commitment to establishing and maintaining international standards of regulation.