Banks and Offshore Banking in Bermuda

Bermuda Bermuda Bermuda Latest News The Bermuda Triangle Bermuda Triangle Theory Bermuda History Bermuda Government Bermuda Government 2 Offshore Low Tax Banking in Bermuda Online Casino Bermuda Reefs Bermuda Weather Bermuda Tourism Bermuda Hotels Bermuda Ferries Bermuda Maps Bermuda Towns Bermuda Flags Bermuda Coins Online Shopping Useful Contacts Bermuda Plus... Bermuda BLOG Bermuda Site Map Bermuda Articles Other Low Tax Islands Bahamas Cayman Islands Isle of Man

Banks and Banking in Bermuda Bermuda has links with principal banking regulatory authorities world-wide, especially with the Offshore Group of Banking Supervisors and the Basle Committee on Banking Supervision. The former first met in 1980. It allows offshore centers to define their common ground more exactly; identify the extent to which the exchange of information with other supervisory authorities can be compatible with their general function as offshore refuges from the fiscal and monetary policies of other countries; and develop/refine a positive, constructive and coordinated response to the approaches of other banking supervisory authorities. Due to the exclusion of foreign banks, classical banking services in Bermuda were, until 2003, provided primarily by the three established Bermudian banks. These banks now have adequate international correspondent networks, and some overseas branches. Foreign involvement has been allowed in more sophisticated financial services such as securities issuance and custody, and such services are increasingly available through the Internet, reducing reliance on the local financial infrastructure. Foreign-controlled firms can nowadays freely provide financial services (other than deposit-taking) internationally, but the Bermuda Government is protectionist as regards local activities, requiring 60% local ownership unless special permission is given. There are currently eight trading members of the stock exchange, most being locally-owned firms, and seven of them can sponsor listing. A number of foreign firms are providing electronic brokerage, dealing and trading services internationally, alongside the Stock Exchange, and in some cases with its involvement.

Bermuda's new anti-money laundering legislation came into effect via the Proceeds of Crime Amendment Act 2000, from 1 June, 2001, which applies to all banking and financial institutions. With the Act in place, fiscal offences are now consistent with international anti-money laundering standards and all forms of tax evasion are now a criminal offence in Bermuda. Bermuda is not an offshore international banking center. International banks, which in other offshore locations and also in most onshore jurisdictions, are allowed to register as banks and can operate in those countries, are not allowed in Bermuda to register as banks and may not operate as banks in Bermuda for the general population. There are now four banks, all local or mostly so. All registered banks in Bermuda must by law - local, not United Kingdom law - be at least 60% beneficially owned by Bermudians. The actual figure was closer to 85% until early in 2004. There is an understanding from the Bermuda Government that their Head Offices will remain in Bermuda, their staff in Bermuda will be majority Bermudian and their mind, management and control will be Bermudian. The exception to this is the first-named bank, below: Deposits made with Bermuda banks are: Not covered by the Financial Services Compensation Scheme under the UK Financial Services and Markets Act, 2000. In addition, they are not licensed to conduct banking business in the United States or Canada. There is no compensation scheme in Bermuda covering deposits. Not authorized under the Financial Services and Markets Act, 2000 to carry on investment business in the United Kingdom. They are not regulated by the UK's Financial Services Authority nor are any monies payable under the UK's Financial Services Compensation Scheme. Their investment vehicles and services have not been registered or licensed under any United States securities legislation and are not being offered, directly or indirectly, in the United States or in any of its territories or possessions or areas subject to its jurisdiction or to its citizens or persons thereof. The essential elements of banking regulation in each offshore center in the Offshore Group are conditions of membership which require effective supervision through effective legislation; an applied commitment to the principles of effective banking supervision, as embodied in the Basle Committee's Concordat, its supplement and minimum standards requirements; and with the necessary administration in place to effect the commitment. Jurisdictional members of the Offshore Group of Banking Supervisors are also committed to the implementation of the Basle Committee's Capital Concord and in almost all cases have set, and are achieving, more rigorous risk asset ratio requirements than the eight percent minimum set by the Basle Committee. The Offshore Group of Banking Supervisors has no enforcement powers over its members. But, like the Basle Committee, it seeks to promote the effective supervision of banks on the peer group principle. Thus, standards are set by the conditions of membership. The Basle Committee on Banking Supervision was established in 1974 by the central bank governors of the Group of Ten industrialized countries to strengthen collaboration among national authorities in their prudential supervision of international banking. It meets four times a year at the Bank of International Settlements in Basle, Switzerland, hence its name. Membership comprises senior officials of the central banks and supervisory agencies of the Group of Ten countries and the Grand Duchy of Luxembourg. The Basle Committee's reports and recommendations are not legally binding. But through discussion of supervisory issues, it reaches consensus on best practices. These are embodied in the Basle Concordat, first drawn up in 1975 and extended in 1983. The Basle Committee has extended its work considerably over the last decade, to keep abreast of major developments in banking, especially the progressive internationalization of banking Below are some established Bermuda Banks... HSBC/Bank of Bermuda Formerly the Bank of Bermuda Limited. Since February 2004 owned 100% by HSBC - for US$1.3 billion. 6 Front Street, Hamilton HM 11 and with branches elsewhere, including overseas. Telephone 295-4000. Fax 295-7093. Bermuda's largest and second-oldest bank. In 1889, they established the beginnings of a second major banking house, as something of a going concern - by taking over the 3-year old branch in Bermuda of the Merchants' Bank of Halifax, Nova Scotia which split off in 1886 from its original agency-holder, N. T. Butterfield & Son Ltd. They called their new bank the Bank of Bermuda Ltd. It was formally established and incorporated in 1890 and is now the largest bank in Bermuda by a considerable margin. Once beneficially locally owned - lo longer - it has about 2,150 employees in Bermuda and worldwide. Like the other two banks, it owns its Bermuda real estate. Opening hours are 9 am to 4:30 pm except Church Street Drive-in which is 9 am to 6 pm on Friday and western and eastern branches which are 9 am to 4 pm. More than 42% of the bank's overall revenue comes from its division called Global Fund Services, with its 111 staff. Its fund management portfolio is immense, big business in Bermuda Bank of N. T. Butterfield & Son Limited 65 Front & Reid Streets, Hamilton HM 12 and with branches elsewhere, including in London and elsewhere. Phone USA-code (441) 295-1111. P. O. Box HM 195, Hamilton HM AX. 789. It has about 790 staff in Bermuda and 808 staff outside Bermuda, with 317 employees in the Caymans in late 2006. .Bermuda's oldest and second-largest bank. Originated in 1815 by Nathanial T. Butterfield. Established in 1858. As N. T. Butterfield & Son, it held from the early 1860s until 1886 - when it was acquired by the new Bank of Bermuda Ltd - the Bermuda branch of the Merchants' Bank of Halifax, Nova Scotia. Incorporated in 1904. Subsidiaries include Bank of Butterfield Executor & Trustee Company Ltd, Palmar Ltd - a nominee company, Field Nominees Ltd, Butterfield Trust (Bermuda) Limited, a mortgage company. In early 2001, it acquired the Matherson Bank in England and has renamed it the Bank of N. T. Butterfield & Son Ltd (UK). It provides retail banking and full international business services. In 2002, the bank sold its interests in Hong Kong. In 2003, the bank bought Thorand Bank & Trust Company of Nassau, Bahamas - now renamed Bank of Butterfield (Bahamas) Ltd - and The Mutual Bank of the Caribbean Inc. in Barbados (now renamed Bank of Butterfield (Barbados) Ltd). It also has Bank of Butterfield International (Cayman) Ltd in Grand Cayman. In early 2004, Leopold Joseph, a City of London merchant bank since 1919, surrendered 85 years of independence when it was acquired by Butterfield's for £51.5 million. It's Butterfield Fund Services (Canada) Ltd. of Halifax, Nova Scotia, provides fund accounting and administrative services to hedge funds and alternative investment vehicles in North America Bermuda Commercial Bank Ltd 43 Victoria Street, Hamilton HM 12. P. O. Box HM 1748, Hamilton HM GX. Phone 295-8091. Bermuda's third bank. Incorporated in 1969, then as Bermuda Provident Bank Limited. Its name was changed in 1984. It has about 63 employees. Its largest shareholder is First Curacao International Bank NV, which acquired the bank in May 1993 from Barclay's Bank. It is for international business only. First Curacao International Bank has had hundreds of millions of dollars in assets frozen in 2006 by European authorities. Both banks are owned by Bermuda-based Dutch national Mr. John Deuss. The Bermuda Government benefits substantially from licensing and regulation, via the Bermuda Monetary Authority, of Bermuda's banks. There is NO central bank in Bermuda. Instead, the Bermuda Monetary Authority is the regulatory authority and the relevant pieces of legislation are The Banks & Deposit Companies Act 1999 and The Banking Appeal Tribunal Regulations 2001.