Minister Laing explained at the Tax and Trade Symposium hosted by The Bahamas Financial Services Board, on December 6, that, at the moment, all new clients of the financial services sector must apply to, report to, interact with and observe the regulations of five financial services regulators.

These include the Central Bank, the Securities and Exchange Commission, the Inspector of Financial and Corporate Service Providers, the Office of the Registrar of Insurance Companies and the Compliance Commission.

“In many instances each of these regulators has exacting demands that represent a duplication or replication of requirements for our clients,” he observed. “We all agree that this is not an ideal operating environment for our clients who would much rather focus on pursuing their core business interest than having to fulfil requirements two and three times already fulfilled within our jurisdiction."

He added that: “Although the regulators have established a Memorandum of Understanding among themselves to help them cope with certain cross-cutting issues of our operators, this is admittedly not sufficient to promote the optimal environment for competing in a globally competitive business such as financial services.”

Laing told the seminar that the government has decided to move “with deliberate haste” to alleviate the problem by amalgamating regulators in a phased fashion, moving towards ultimately establishing what might become a single super-regulator, or at most two regulators for the entire financial services sector.

He explained that the government has already engaged an international consultant to assist with the endeavour, and has agreed upon a special committee of public and private sector experts to lead this process.

The minister added that the consolidation process has already commenced, to the extent that the Inspectorate of Financial and Corporate Service Providers has been transferred from the Registrar General’s Department to the Securities Exchange Commission, to take effect from January 1, 2008.

He additionally explained that the consolidation process involves improvements in the functioning of the Registrar General’s Department:

“Cognizant of the critical role that this department plays in the facilitation of establishing and regularizing business operations in this jurisdiction, we have [been] seeking to shore up the human and technological systems that support this department with a view to ensuring its greater effectiveness and efficiency.”

Laing said the consolidation effort also includes establishing a comprehensive, internationally recognized anti-money laundering and counter terrorism financing (AML/CFT) regime. This effort is being led by the Financial Intelligence Unit (FIU), and is expected to be complete within 12 months.

The government is also going to refine immigration policies as they relate to international services such as financial services, he announced. The policies will seek to more clearly define the parameters for the granting of work permits in the sector, and provide some reasonable assurances for the receipt, review and determination of work permit and permanent residency applications.