Walkers (Bermuda) Limited has successfully completed the Island's first Class B Registration, since the Investment Business Amendment Act 2022 came into force in July 2022 (the "Amendments").

Persons who did not previously require a license under the Investment Business Act 2003 (as amended) (the "Act") or relied on the Exemptions Order (defined below) must now be licensed or registered with the Authority no later than 26 July 2023. The Bermuda Monetary Authority ("the Authority") has committed to processing applications within three months and therefore applications for licensing or registration must be submitted to the Authority no later than the end of April.

By way of background, the Amendments to the Bermuda investment business regime widened the Authority's scope of supervision over investment businesses and as a result, new categories of registered persons were introduced. Where investment businesses were previously either licensed or exempt from licensing under the Act 2003, the Amendments imposed categories of registered and non-registrable persons.

Those persons who previously relied on an exemption pursuant to the Investment Business (Exemptions) Order 2004 (as amended) ("the Exemptions Order") are now required to apply to the Authority to be registered as a Class B registered person pursuant to the Investment Business (Class B Registered Persons) Order 2022 or to apply for a full license under the Act. This relates specifically to persons, other than market intermediaries, who carry on investment business exclusively with sophisticated participants or where the investment business services are provided to not more than 20 persons at any time and who do not carry on investment business with, or solicit business from, the public.

Additionally, the Amendments expanded the definition of "investment business" under the Act to include the "promotion of investments to the public." Persons who are conducting these activities will now also need to consider whether they need to be licensed or registered under the Act.

Prior to the Amendments, the determination of whether a person was required to be licensed under the Act required the consideration of two main components: (i) whether the person was conducting an activity considered to be 'investment business' as defined in the Act; and (ii) was the activity being carried on "in or from Bermuda". Whether an activity was carried on "in or from Bermuda" centered on whether the person conducting such activity "maintained a place of business in Bermuda". This entailed having premises in Bermuda, where there were staff employed and salaries paid, as well as other business expenses. As a result, persons who did not maintain a place of business in Bermuda fell outside the scope of the Act and were not required to be licensed thereunder.

Further to the Amendments, provisions are inserted in place to stipulate that a person carries on investment business in or from Bermuda if such person "is incorporated or formed in Bermuda and carries on an investment business" or "is incorporated or formed outside Bermuda and carries on investment business in or from Bermuda". Consequently, entities that are incorporated or formed in Bermuda that are carrying on investment business outside of Bermuda must now be licensed or registered under the Act.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.