TCI Proposes Depositor Protection Scheme

by Amanda Banks, Tax-News.com, London

16 April 2010

Turks and Caicos Islands’ Bank, a private company, is to be liquidated following an Order from the Supreme Court in favor of the appointment of a provisional liquidator by the Financial Services Commission (FSC).

Commenting on the liquidation of the bank, Governor of the Turks and Caicos Islands, Gordon Wetherell, said:

“The FSC have informed me that all accounts will have been frozen, depositors will not have access to their funds and, very regrettably, may lose some of their money. The Court has appointed representatives of Deloitte & Touche as provisional liquidators as a first step in the process of liquidation. Details will be available very quickly explaining what steps will be taken, what staff should do, and to indicate how long it will take before depositors can expect to receive some of their money."

”While we now wait to see what timetable the provisional liquidators and the FSC put in place to deal with this situation, the government will prioritize an already important policy objective: to put in place a measure of protection for individual depositors with banks in the TCI - a Depositor Protection Scheme.”

Wetherell continued:

“Given the very difficult situation we now face, I have concluded that we must press ahead for the urgent establishment of such a scheme. Schemes of this kind - which provide depositor protection for all banks’ individual resident account holders up to defined limits - are common practice internationally. They are funded by the banks licensed to operate within those countries, not out of the public purse.”

”Given the gravity of this matter I have asked the FSC to engage in discussions on depositor protection with the banks licensed in this country, at the beginning of next week. I am also today writing to the banks and their regional head offices to explain why the government is taking these steps and to ask that they cooperate with the FSC.”

He concluded:

”I will take early opportunities to discuss with members of the Advisory Council and the Consultative Forum for the swift introduction of a Depositor Protection Ordinance which will provide the legislative mechanism to establish a scheme of this kind in the islands.”

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