DPM and Min. of Finance the Hon. K. Peter Turnquest explained that under the provisions of the Financial and Corporate Service Providers Bill, 2020, the Securities Commission is charged with the function of protecting the non-bank financial services and corporate services market against abuses, market misconduct and other improper practices, and is empowered to take administrative and other actions to protect the interests of the public.
As he introduced the Bill in the House of Assembly on Wednesday, November 4,2020, DPM Turnquest stated that beyond the broad function and general power, there are certain specific provisions of the Bill. It will place a duty to maintain the highest standards of professional conduct on licensees. They are required to act honestly and fairly, and with due skill, care and diligence.
“I note here, that the draft Financial and Corporate Service Providers Regulations, 2020, which have been prepared to support this Bill upon passage, elaborates on some of the standards, particularly with regard to client relations, that must be maintained. “Among them, licensees will be required to take all reasonable steps to ensure that information it provides to clients are presented fairly and clearly.”
He said the regulations also require that licensees protect clients’ personal data in keeping with the provision of the Data Protection (Privacy of Personal Information) Act. The Deputy Prime Minister stated that further, the Regulations will require licensees to ensure their data protection measures adequately address the collection and storage of personal data, prevent unauthorized access to personal data, and allow for the correction of erasure of inaccurate data. He explained that with respect to protecting the industry and the reputation of the jurisdiction from the contagion of money laundering, or abuse of terrorism financing, the Financial and Corporate Services Bill, 2020, requires licensees to comply with the Financial Transactions Reporting Act, 2018 and the Anti-Terrorism Act, 2018.
DPM Turnquest noted that licensees will also be required under the Bill to have adequate financial resources and be solvent and to have adequate insurance coverage appropriate to their business operations. “These all work to protect investors, both by increasing the likelihood that operators are financially prepared for the activities they will engage in, and may add some protective measures for aggrieved consumers.”
He stated that he wished to underscore that the Bill defines for the first time certain criminal financial schemes, making The Bahamas one of the leading jurisdictions to introduce legislation to expressly criminalize this type of activity. “These may take the form of pyramid schemes, Ponzi schemes and advance-fee schemes, among others, and many of them have plagued unsuspecting
Bahamians for generations.”
The DPM said, “Further, these schemes are fundamentally detrimental to investors and the public. The Bill criminalizes the promotion or marketing of these financial schemes and empowers the Commission to dissolve them where circumstances so warrant. It also empower the Commission to investigate and enforce against persons engaged in financial schemes.”