By Raymond Hainey

Bermuda’s financial police force will this year look beyond the Island’s borders in a bid to set standards rather than follow them, Bermuda Monetary Authority (BMA) CEO Jeremy Cox said yesterday.

Mr Cox said: “A world class financial services industry such as Bermuda’s requires the support of a world class financial services regulator capable of assuming a leading role at a global level.

“My goal and the goal of our leadership team is not only to ensure the Authority remains the world-class regulator our industry and country demands.

“We also want to set the standard for quality regulation at home and abroad for the benefit of all stakeholders, including other regulators.”

Mr Cox was speaking as he unveiled the BMA’s 2014 business plan at a packed meeting of business chiefs at the authority’s Hamilton headquarters.

He told the audience that Bermuda’s business watchdog was rated alongside the UK and US for regulatory quality and efficiency.

Mr Cox said: “In 2014, the authority will continue to build upon our highly-regarded regime and further entrench key framework enhancements across all of the financial service sectors we regulate.

“We will also continue to facilitate business development for the jurisdiction while maintaining an effective, risk-based and appropriate regulatory environment that is workable for the quality firms which operate here.”

He added: “The BMA has had a lot of success but I think, as I said earlier, a lot of that success has been reactive.....what I would like to see us doing going forward is take the knowledge we have and teaching others, maybe a different course from the course we are on.”

And Mr Cox said: “We have got to move from being a regulator willing to sit behind and wait for things to happen to pushing the envelope.”

Mr Cox told the meeting that the BMA plans for the year included boosting business set-ups in Bermuda through continued support for an opt-in regime for Bermuda’s funds sector so it can comply with the European alternative investment funds managers directive (AIFMD).

He said: “The proposed opt-in regime would enable Bermudas alternative investment funds managers (AIFMS) to register with a European Union member state.

“Upon registration, AIFMS could market funds throughout the EU by way of a ‘passporting’ option which will be available to non-EU countries by 2015.”

And he said technology would play an increasingly important role in the regulation of business — including the electronic filing of reports to the BMA.

The annual report added that BMA has already signed up to a European Securities and Markets Authority memorandum of understanding with EU states.

The authority also plans to complete the implementation of group capital requirements this year, which will apply to reporting for the 2013 financial year end and be phased in over five years.

Mr Cox added that the BMA — which has already won qualified jurisdiction status from the US National Association of Insurance Commissioners (NAIC), one of the first four jurisdictions to do so — would take part in a full assessment this year.

The US process was designed to to evaluate the reinsurance supervisory systems of non-US jurisdictions for reinsurance collateral reduction purposes.

Approval under the NAIC process means that reinsurers licensed and based in Bermuda will be eligible to be certified for reduced reinsurance collateral requirements under the NAIC credit for reinsurance model law.

The BMA will also move to amend the Island’s insurance legislation within the first six months of the year to “refine the content and process filing requirements for Bermuda’s captive insurers”.

The BMA annual statement said: “In particular, an enhanced statutory financial return, which consolidates previous filing requirements with a new risk self-assessment, will become an annual statutory requirement for Bermuda’s captive insurers. The enhanced statutory financial return will be submitted to the authority electronically.”

The 2014 business plan added: “These proposed changes will create greater efficiencies in the filing process and the collection of enhanced data will assist the authority in its continued analysis of Bermuda’s captive market.”