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WHAT TO EXPECT FROM YOUR FINANCIAL INSTITUTION

Market codes of conduct and practice

The Codes listed below have been developed to set standards of good practice and transparency among all financial institutions in Bermuda.

These Codes are available to help the public and companies understand what standards and level of service companies should adhere to when providing financial services.

The Market Codes are designed to ensure that customers receive fair treatment, which includes:

  • Providing clear information to customers about the products and services the companies provide
  • Dealing with complaints promptly, and having formal procedures for doing so, including logging
  • Providing clear and timely information about applicable fees and/or a company's policies for changing fees/interest rates

Bermuda's financial companies have made a commitment to adhere to these Codes. Local banks, investment firms, insurance companies, trust companies and fund administrators can assist you with understanding how the Codes are applied when serving you and your individual needs.

The Codes of Conduct and Practice apply to companies in the following segments of Bermuda's financial services sector:

Bermuda banking code of conduct

This Code sets the standards of good banking practice in Bermuda and explains how banks are expected to treat their customers. This Code applies to current accounts, savings and deposit accounts, payment services, cards and borrowing.

Bermuda's Banks should:

  • Quickly and reasonably deal with any concerns that may arise regarding your account
  • Provide you with clear information about an account or service, as well as any terms and conditions and applicable interest rates
  • Treat your information as private and confidential and use their best efforts to operate secure and reliable banking systems
  • Make regular account statements available to you and update displayed interest rates as required

Investment business code of conduct

This Code outlines professional conduct standards for investment businesses; it lays out guiding principles for client relationships and portfolio management, and includes rules about how to deal with conflicts of interest.

Investment Providers must:

  • Observe high standards of integrity and fair dealing when conducting investment business and should avoid conflicts of interest
  • Use reasonable care and judgment to achieve and maintain independence and impartiality in making investment recommendations or taking investment action

Investment Providers must not:

  • Churn accounts by generating transactions with unnecessary frequency or of excessive size
  • Recommend a transaction to a client if the recommendation is motivated largely by the benefits which it may bring to the investment provider

Investment business advertising code of conduct

This Code contains policies regarding proper advertising practices for the buying or selling of investments.

An investment business advertisement must not contain:

  • A statement, promise or forecast which is untrue or misleading
  • A statement of fact which the investment provider does not believe to be true
  • A misleading statement about the nature or scale of the activities, or resources of the investment provider
  • A statement relating to past performance (with certain caveats)

Insurance code of conduct

The Insurance Code of Conduct establishes the duties, requirements and standards Bermuda' s insurers must adhere to.

A Bermuda Insurer must:

  • Make certain that its business is conducted in such a way as to treat its policyholders fairly, including dealing appropriately with conflicts of interest and disclosing relevant information
  • Observe high standards of integrity and fair dealing when conducting business
  • Avoid misleading and deceptive acts or representations. It should not seek to exclude or restrict any duty or liability to a policyholder unless the liability is clearly excluded from the policy

Trust code of practice

The Code of Practice in place for trust companies provides guidance as to the duties, requirements, procedures, standards and principles persons carrying on trust business in Bermuda must follow.

A Trust Company must:

  • Conduct its business with integrity at all times and should not attempt to avoid its responsibilities
  • Have regard at all times to its legal obligations with regard to conflicts of interest
  • Exercise its fiduciary duties prudently and competently and, subject to the terms of the trust, consider the rights of all classes of beneficiaries when making decisions affecting the administration of the trust
  • Deal fairly with all clients and seek to ensure that clients are not misled as to the service being provided and the duties and obligations of the service provider

Fund administrators code of conduct

The Code of Conduct for Fund Administrators ensures that they conduct their business prudently and with due skill, care and diligence.

Fund Administrators must:

  • Be alert at all times to the risk of conflicts of interest
  • Protect the confidentiality of fund clients and underlying investors

Tips for being informed

It's important to be aware of the market Codes, and understand how they ensure the customers and clients of Bermuda's financial services receive fair and proper treatment.

However, there are several fundamental things you can do to ensure you protect yourself when using financial services.