Smith: Higher SCB fees could alienate members

Wed, Jun 6th 2012, 10:22 AM

With the Securities Commission of The Bahamas (SCB) attempting to position itself to become a self-funded entity, the process in itself might not be music to the ears of registrants of the commission, according to James Smith, former minister of state for finance.
Smith told Guardian Business that if the SCB intends to increase its fees to registrants in order to generate funds to fuel the commission, it could steer potential corporations away and leave current registrants with a decision to make.
"You have to look at what type of structure is being proposed to the licensees, because you have to be careful with that," Smith said.
"If it's too high you could drive registrants away and potential registrants may decide to go elsewhere."
Smith's comments come after Executive Director of the SCB Dave Smith told Guardian Business on Monday that the organization is aiming towards becoming a self-funded agency, independent of the government, and would like to achieve that status by 2015. He mentioned that fee increases for its registrants will be a viable option to generate monies, and it will hopefully eliminate a criticism from the Financial Sector Assessment Program (FSAP).
The move by the commission is backed by Minister of Financial Services Ryan Pinder, who said it is a step in the right direction in terms of making The Bahamas a compliant jurisdiction and more business friendly.
"When you look at the proposed fees and benchmarks against others, we are significantly below others in the region," Pinder told Guardian Business. However, Smith mentioned that ultimately if the SCB can't generate the necessary funds needed to operate independently, it will have to turn to the government to receive subsidies. He added that there are many steps in between and a "trial balloon" to test how effective independence will be.
The Bahamas Financial Services Board (BFSB) believes that this is a good move being made by the SCB. "We fully support an independent Securities Commission as we did with the Insurance Commission of The Bahamas, which gained funding independence in 2009," said a statement sent to Guardian Business.
"This is an international standard and the advantages are obvious both in terms of regulatory equivalence and reputation. We understand that the commission has benchmarked the fees against other jurisdictions. BFSB believes that it is important that we allow the consultation process to run its course before commenting on reasonableness or adequacy.

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