Thursday, 19 July 2018

Financial Services Sector Deserves Good Regulation for Continued Growth

NASSAU, The Bahamas – Deputy Prime Minister and Minister of Finance the Hon. Peter Turnquest said considering the opportunities the Financial Services Sector provides for Bahamians to be business owners or to gain meaningful employment, and the role that Financial and Corporate Providers play in supporting the jurisdiction’s wealth management services, the sector deserves attention and requires good regulation to ensure its continued growth and sustainability.


DPM Turnquest explained that much of the growth will also hinge on the sector’s reputation, which is inclusive of the professionals who populate the industry, the regulators who are charged with oversight in order to ensure the integrity of the sector, as well as the Government, which is responsible for setting policy direction, enacting appropriate legislation and following through with the enforcement of the law.

“We must be a jurisdiction, which is organised, well regulated and replete with competent world class professionals and certainly open for business,” he said at the Financial and Corporate Service Providers Act, 2000 Industry Briefing hosted by the Securities Commission of The Bahamas at the British Colonial Hilton, Tuesday, August 8, 2017.

The DPM said in today’s international climate, regardless of whether it is true or not, being perceived as an international financial centre that is weak in hampering money laundering and combating terrorism efforts, or as a haven for persons engaged in illicit activities will inevitably destroy the nation’s financial services industry.

He said, “It is a very serious matter for the jurisdiction when the Head of the Organisation for Economic Co-operation and Development (OECD) Global Forum on Tax Transparency and Tax Information Exchange, Monica Bahtia says that the nation’s image was that of the last tax haven standing and warns that actions are needed to avoid a blacklisting as was reported in The Tribune of April of this year.”

DPM Turnquest said the country should not be fooled into thinking that serious above-the-board investors will start beating a path to its door to do business as a result of headlines like this.

He noted however, that this announcement came prior to the Government’s commitment to adopting the multi-lateral approach to shared tax information under the OECD’s Common Reporting Standard (developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calling on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis).   It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.

The DPM said, “The reputational hit the jurisdiction would have to suffer from being blacklisted as a non-cooperative, would pose an existential threat to our financial services industry restricting access to global markets and increasing the costs of doing business as a result of the greater due diligence requirements that those willing to do business with a blacklisted jurisdiction will incur.  Transparency is the order of the day.”

He noted that the Securities Commission has recently released guidelines on the management of accounting records, which impacts many financial and corporate service providers.

DPM Turnquest underscored the importance of this new initiative and commended the Commission for issuing the guidelines, which sends a strong signal to the international community that the jurisdiction is committed to world class regulation.

“As financial and corporate service providers, you must ensure that you meet your obligations and maintain accounting records as required under relevant legislation both in respect of your own businesses and any International Business Companies or exempt limited partnerships where you provide corporate or administrative services.”

The DPM said, “You should expect that you are taking every effort to meet these fundamental responsibilities.  You have a reasonable and pragmatic regulator in the Securities Commission, so as you see ways to improve the guidance, share it with your regulator but ensure at the same time that you meet the requirements.”


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