Legislators yesterday fine-tuned Bermuda Monetary Authority Act provisions which allow the regulator to share normally confidential information held on clients of financial institutions with overseas authorities.

The amendments uphold the principle of client confidentiality and prohibits the BMA from disclosing client information as a general rule.

But the changes allow the regulator to share information with foreign and other local regulators for their regulatory purposes and to the Police in the event of a criminal investigation provided the information is relevant to that investigation.

"It is important to note that the sharing of information is primarily for regulatory matters," Finance Minister Paula Cox said.

"The persons noted above must justify why the client information is pertinent. Apart from these very narrow circumstances the information obtained by the Bermuda Monetary Authority must be protected and may not be shared without the person's consent or unless the Authority is otherwise compelled by law to give the information."

The BMA, she added, will be drawing up guidelines on the management and protection of client information.

The BMA act had already been amended in response to new standards of co-operation being demanded by the international community, said Ms Cox who introduced the bill.

But following two legal challenges questioning the exercise of the BMA's new powers, Government decided to amend the law to make it clearer.

Ms Cox said consultation with the industry had stressed that Bermuda must "give a clear statement as to the importance of protecting client interests."

"The industry agreed that is there is a criminal investigation clients can't hide and no service provider would advocate that such actions are to be perpetuated in Bermuda," she reported.

"Bermuda's reputation as a sound financial centre is based on principles of good business and sound practices. That is widely accepted. However, industry represented that there must also be clarity as to what types of situations will trigger a 'regulatory review' and require information about the personal affairs of a client."