The government is moving ahead to strengthen the financial services sector. The aim is to develop a new framework to enhance industry regulations and protect revenues to the Public Treasury.
During a press conference held at the Office of the Prime Minister, on Thursday, 3rd January, Deputy Prime Minister and Minister of Finance, the Hon. K. Peter Turnquest said that the move would ensure that The Bahamas maintains its competitive edge as a global leader in the financial services industry and ensure the country’s second economic pillar remains vibrant over the medium and long term.
“The establishment of this new framework follows broad consultation with industry representatives in both the private and public sectors,” said DPM Turnquest. “Under the framework, all financial institutions will now be permitted to offer services to both domestic and international clients, provided that the financial institution meets the prescribed regulatory requirements in respect of the services offered.”
Speaking to stakeholders representing the private and public sectors and members of the media, the Deputy Prime Minister said that the new framework would remove any difference in the fiscal treatment of financial institutions that cater primarily to the domestic markets and those institutions that cater to international clientele.
The new framework, which is intended to take effect as of 1st January, 2019, proposes that financial institutions, including banks, insurance companies, trust companies, investment advisers, mutual fund administrators, brokers/dealers and other regulated financial services entities, will be exempt from paying a Business License fee when renewing or applying for a license, starting January 2020.
He said that in lieu of business license fees, financial institutions would be subject to a three-tiered system, which includes a sliding scale between $2,250 to $250,000 per annum; all financial institutions that are deemed systematically important, as determined by their degree of integration into the domestic financial system, would be subject to an additional fee in respect of Bahamian liabilities and contingencies; and any bank wishing to access the domestic payments system and/or wishing to operate as an authorized agent for Bahamian dollar transactions would be charged fees reflecting the substantial supervisory and management costs of these arrangements for the Central Bank of The Bahamas and other public sector agencies.
“We expect that our demonstrated commitment to operate within the framework of mutually agreed standards, that are accepted by all stakeholders, will allow The Bahamas and the global community to move forward and get down to the work of doing business in a marketplace characterized by more transparent rules that lead to equity and fair competition,” said DPM Turnquest.