Government regulations on how companies issue digital certificates for online transactions were presented to the House of Assembly on Friday.

Telecommunications Minister Renee Webb said the regulations, which were introduced last month, "represent a significant step forward in the development of e-business in Bermuda. They demonstrate to business internationally that we are a serious jurisdiction for sophisticated e-business".

These regulations, formally called the Certification Service Providers (Relevant Criteria and Security Guidelines) Regulations 2002 follow the Electronic Transactions Act (ETA) 1999,

deal with the formation of electronic contracts and the validity of digital signatures.

The voluntary CSP scheme allows certificate authorities to apply for Government recognition under the ETA.

Quo Vadis, a Bermuda-based digital certificate provider company, is the first company to seek CSP approval.

Ms Webb indicated on Friday that the Bank of Bermuda will be making application this week. She anticipates there will be applications from outside of Bermuda as well.

Stephen Davidson, vice-president of marketing for Quo Vadis said: "While the ETA recognises that electronic signatures are legally binding, users may have to prove that the signature is valid unless it was created using an "accredited digital certificate". Signatures from accredited certificates are automatically accepted as valid and binding."

Mr. Davidson added: "Quo Vadis is excited to be the first CSP to be accredited by the Bermuda Government. We view this as an important step in the development of e-government and the legally binding use of electronic transactions," he said.

Bermuda was one of the first off-shore jurisdictions to set up a legal framework for electronic transactions with the 1999 ETA, but the regulations put in place how to comply with the ETA legislation.

Dublin and Hong Kong have already put in place their version of the Certification Services Provider regulations, which will mean that anyone with the certification has met fairly stringent criteria to be allowed to produce digital certificates.

In introducing the CSP regulations last month, Ms Webb said the criteria were formulated in liaison with Island businesses and stakeholders. She added that within business, certificates were also increasingly being used to allow important clients to transact business online and for employees to authenticate themselves when working off-site.

Ms Webb said: "With the increasing important role that certificates are playing in e-business it is clearly vital that the businesses which issue certificates are competent, honest and technically up to the mark.

"It is for that reason I decided a scheme to assess their competence was required. The criteria used has been developed, as I mentioned, with business on the Island, but it also has been drawn up to be compatible with that used in other International schemes in both North America and Europe. I firmly believe it will be the first offshore CSP scheme to become recognised by the European Union."

According to Nigel Hickson, E-commerce advisor to the Minister, companies such as KPMG, PricewaterhouseCoopers and the banks may also apply for the certification.

Mr. Hickson said: "The scheme requires the ministry to put arrangements in place whereby they can assess the conformance of applicants to the criteria and standards contained within the regulations. To undertake this, the ministry proposes to contract experts, where required, to assess the applications made. To offset this cost there will be a charge of $10,000 per application made."