Bermuda’s financial-services regulator plans to ramp up site visits and increase the scope of enforcement actions this year, as the island prepares for a critical international assessment.

Also revealed in the Bermuda Monetary Authority’s 2018 Business Plan is an overhaul of its fees to better align fees with the actual cost of supervision.

A clear area of focus is the Caribbean Financial Action Task Force’s upcoming mutual evaluation review of Bermuda’s Anti Money-Laundering/Anti Terrorist-Financing framework.

A successful assessment will bolster the island’s standing as an international business centre, while a poor grade would do the opposite.

CFATF assessors will visit the island in September and October this year.

In its plan, the BMA says it will expend its AML/ATF resources, add a deputy director to lead the team, beef up supervisory activities and address remaining areas in the legal framework that fail to match FTAF technical requirements.

“In 2018, the number of on-site assessments will more than double, from almost 30 in 2017 to 70 in 2018,” the BMA plan states.

“In addition, continued improvements will be made to internal supervisory policies and procedures covering licensing and authorisation, entity level risk assessment, enforcement and ongoing monitoring.”

The BMA has recognised areas of the regulatory framework that need to be strengthened. These include increasing the scope of enforcement sanctions, coverage of certain lending, leasing and financial guarantees, amendments to exchange control laws, insurance-related activities in segregated accounts companies and insurance-linked securities, and enhanced supervision of investment funds.

The BMA points out that the CFTAF assessment includes a technical requirements questionnaire, which was due on March 24, and an effectiveness questionnaire, due on May 23, well before the visit of the assessment team.

The plan adds: “In summary, the BMA is committed to doing everything within its power to enable Bermuda’s success during this challenging and crucial year for the jurisdiction.”

Jeremy Cox, chief executive officer of the BMA, in his commentary, explained the rationale behind the overhaul of the fee structure.

“In 2018, we will be launching a plan to re-engineer supervisory fees, one which will involve aligning fees with the actual cost of supervision. Supervision that requires the most time must be commensurately priced.

“This may sound like a statement of the obvious, but during a decade of momentous growth in global regulatory development and increased competition, structural adjustments and fine-tuning were not a top priority.

“Essentially, we became the builders that kept adding to their house to accommodate increasing requirements. When we stepped back and took a good look at the structure, we saw that refinements were needed. We’ve already begun this work.”

Any fee adjustments will be carried out in consultation with the entities that the BMA regulates.

Mr Cox added: “We know that value for money is crucial to industry stakeholders, and our friends and neighbours in the community.”

The CEO noted three themes of the changing financial-services landscape in Bermuda, which he referred to as “the three Ts” — taxes, technology and takeovers.

He mentioned the effects of US tax reform, technologies that could drive “truly massive economic transformations and disruptions in the coming years”, and takeover deals in the insurance industry.

In this fast-changing environment, he said there was a need for a solid and sustainable regulator.

Mr Cox said: “The role of the regulator must be to strike the balance between financial stability and economic growth.

“We must remain the ever-vigilant gatekeeper, enabling Bermuda to continue to be a well-regulated and safe financial-services centre; and we must take care not to stand in the way of progress.”

• The BMA’s Business Plan 2018 publication is attached to this webpage under the heading of Related Media