Bahamas' Finance Minister Confirms Securities Compliance

Amanda Banks, Tax-news.com, London

06 March 2001

Last week The Bahamas' Minister of Finance, Sir William Allen, spoke at the fourth annual Round Table Meeting of the Council of Securities Regulators of the Americas (COSRA) and confirmed that the Bahamas government is committed to supporting a financial services sector that is a world class leader in implementing the highest international best standards and practices.

The aim of the meeting, which lasted three days (1- 3 March) was to inform security regulators and investors of recent international trends in the securities industry including capital markets, stock exchanges and online trading issues. Delegates attended the meeting from North America, Latin-America and the Caribbean, giving their reports on the latest developments in securities and the implementation of the Hague Convention principles.

The Finance Minister also used the forum to underline the government's intention to comply fully with the principles set out by COSRA's parent group, the International Organisation of Securities Commissions (IOSCO). He said: 'We wish to associate ourselves with your effort and will take whatever measures are necessary to ensure full compliance with your principles and our place as a respected partner in the international community ... We are aware of the enormous responsibility resting upon the regulators of securities markets and the critical and delicate responsibility which the market's institutions discharge in the nation's financial intermediation process.'

Sir William spoke of the need for a strict regulatory body to govern the process of online trading based in the Bahamas. While recognising the benefits of online trading in terms of revenue and economy, Sir William said: 'Borderless e-Commerce in this virtual environment can also mean uncertainty and risk, creating new challenges for those charged with regulating the market.' He said the regulatory body would uncover 'valuable opportunities, gain competitive advantage, and build shareholder value in the cyber marketplace, which requires systems that are aligned and integrated.'

Sir William Allen also took the opportunity to confirm that the Bahamas financial services sector will be reviewed by the IMF/World Bank Financial Sector Assessment programme (FSAP), saying: 'The securities industries will be included in the initial review. Investor education, which is a priority of COSRA, is also an important pillar of this jurisdiction' regulatory efforts. The ultimate objective is to enable the individual investor to become an important force in the market. He then becomes the regulator's best ally.'

He continued: 'The integrity of the market and the protection of the investor are the objectives of these efforts. In a similar vein, efforts are being made to enhance information sharing with other local regulatory bodies and to establish a supervisory regime for investment businesses that do not have a physical presence in the Bahamas.'

Sir William referred to The Bahamas' response to the multilateral organisations such as the OECD, FATF and FSF which have demanded, effectively, an overhaul of the jurisdiction's legislative and regulatory powers over its financial services sector. He explained: 'Our response was prompt and comprehensive where the need was clear and unambiguous. In fact, the Bahamas had already begun to review its regulatory regime independently of the external pressure, although I have to say that the pressure produced faster results. I still do not think the pressure was either necessary or even handed.'

He added: 'The Bahamas has been a leader and pioneer in the international financial services industry because of its ability to respond appropriately to both opportunities and challenges as they have emerged over the years. The Government moved resolutely to respond to what it recognised as a legitimate concern about the conduct of financial and quasi-financial institutions operating within its jurisdictions.'

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