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Caution stressed by OBA as Senate passes new fintech measures

Senator Douglas De Couto of One Bermuda Alliance (File Photograph)

The Opposition has raised concerns about the potential damage some fintech companies could do to Bermuda’s international reputation as the Senate passed measures streamlining the regulation of digital asset business.

The Companies Amendment Act 2023 amends the 1981 companies legislation to permit an exempted company licensed under the 2018 Digital Asset Business Act to conduct business without the requirement for additional licensing in a separate section of the 1981 Act.

The moves frees companies cutting their share capital from the requirement to publish details of the proposed action.

Additionally, an exempted limited liability company approved under the Digital Asset Business Act 2018 to carry on business in Bermuda will do so without having to be licensed under the Limited Liability Company Act 2016.

Douglas De Couto, of One Bermuda Alliance, cautioned about the impact of financial technology companies that are in trouble with overseas regulators setting up business in Bermuda.

He said: “Unfortunately, some of our engagement with some of these companies has not been as beneficial for our reputation as I would like.

“And, so I get a little concerned we are removing checks and balances, or opportunities for us to look carefully at these businesses.

“I get very concerned when I see companies that seem to be in trouble with the regulators overseas coming to Bermuda to set up here.

“While I want this fintech stuff to work here … I am very concerned at what it’s doing for our international reputation which has been hard earned, well earned and could easily be lost.”

Arianna Hodgson, the Junior Minister of Finance, said she would not be drawn on what she called the OBA “commentary”.

Ms Hodgson said the moves came from a request by the industry to streamline regulations, with advice having been taken from the Bermuda Business Development Agency.

The Government has stressed the independent regulation of the Bermuda Monetary Authority in managing the industry and said the moves represent a “significant step forward for our technology ecosystem”.

The OBA did not oppose passage of the legislation.

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Published May 18, 2023 at 7:54 am (Updated May 18, 2023 at 7:31 am)

Caution stressed by OBA as Senate passes new fintech measures

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