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Legislation on securities introduced

Thu, May 6th 2021, 12:00 PM
Politics Tribune Stories

PRIME Minister Dr Hubert Minnis led debate in the House of Assembly yesterday on legislation that will amend the Securities Industry Act and Insurance Act.

“The proposed amendments are prompted by the need to address outstanding deficiencies in the protection of minority investors’ regime identified in the World Bank’s Doing Business report,” he said, speaking about the Securities Industry (Amendment) Bill. “This report compares the ease of doing business across economies. The proposed amendments will enable the commission to address the technical gaps in the Act.
#“The proposed amendments will provide for the automatic revocation of a registration, where a registrant fails to renew its registration, submit its annual filings, or to pay its annual fees as required.”
#In 2017, the Bahamas ranked 121 out of 190 countries on the doing business index. Dr Minnis said in response to this, the government appointed advisors who worked with staff of the delivery unit in his office to make changes.
#He said the Bahamas subsequently jumped 44 spots on the metric for protecting minority investors, up from 132, while the ranking for ease of doing business improved from 121 to 119.
#Dr Minnis said the amendments debated yesterday address further deficiencies, including those relating to the “requirements for disclosure by the issuer of its financial statements and any material contracts.”
#“The amendments also make the provision of a register of public issuers mandatory as opposed to discretionary,” he said.
#“These proposed amendments: provide good regulation, set standards that encourage investment activity and enhance the ease of doing business in the Bahamas.”
#As for the Insurance (Amendment) Bill 2021, Dr Minnis noted that the Caribbean Financial Action Task Force (CFATF) conducted an onsite examination of the Bahamas’ anti-money laundering and terrorist financing regime in 2015 and found deficiencies.
#“This examination identified numerous gaps and deficiencies in the AML/CFT framework across the financial services sector,” he said. “Following the onsite visit, a Mutual Evaluation Report for the Bahamas was published in July 2017.”
#“The (Insurance) Commission has various powers as outlined in the Insurance Act, including the power to prescribe conditions of registration for insurance companies.
#“Section 30 of the Insurance Act requires companies to obtain prior approval from the commission whenever there is a change in the beneficial ownership of the company. However, there is no specific requirement for companies to obtain prior approval whenever there is a change in senior management. The CFATF considered this a deficiency in the insurance legislation.
#“It was deemed to affect the commission’s ability to prevent criminals from doing business in the insurance sector after the initial company registration. FATF Recommendation 26 requires that financial supervisors take the necessary legal or regulatory measures to prevent criminals or their associates from holding, or being the beneficial owner holding a management function in a company. It was determined that insurance companies should obtain prior approval from the Insurance Commission for any change in senior management in the company, to mitigate against this risk.”
#“In carrying out its power to supervise insurance companies under the Insurance Act, the Commission determined that it was necessary to require insurance companies to obtain prior approval of the Commission whenever there is a change in senior management in the company.”

“The proposed amendments are prompted by the need to address outstanding deficiencies in the protection of minority investors’ regime identified in the World Bank’s Doing Business report,” he said, speaking about the Securities Industry (Amendment) Bill. “This report compares the ease of doing business across economies. The proposed amendments will enable the commission to address the technical gaps in the Act.

“The proposed amendments will provide for the automatic revocation of a registration, where a registrant fails to renew its registration, submit its annual filings, or to pay its annual fees as required.”

In 2017, the Bahamas ranked 121 out of 190 countries on the doing business index. Dr Minnis said in response to this, the government appointed advisors who worked with staff of the delivery unit in his office to make changes.

He said the Bahamas subsequently jumped 44 spots on the metric for protecting minority investors, up from 132, while the ranking for ease of doing business improved from 121 to 119.

Dr Minnis said the amendments debated yesterday address further deficiencies, including those relating to the “requirements for disclosure by the issuer of its financial statements and any material contracts.”

“The amendments also make the provision of a register of public issuers mandatory as opposed to discretionary,” he said.

“These proposed amendments: provide good regulation, set standards that encourage investment activity and enhance the ease of doing business in the Bahamas.”

As for the Insurance (Amendment) Bill 2021, Dr Minnis noted that the Caribbean Financial Action Task Force (CFATF) conducted an onsite examination of the Bahamas’ anti-money laundering and terrorist financing regime in 2015 and found deficiencies.

“This examination identified numerous gaps and deficiencies in the AML/CFT framework across the financial services sector,” he said. “Following the onsite visit, a Mutual Evaluation Report for the Bahamas was published in July 2017.”

“The (Insurance) Commission has various powers as outlined in the Insurance Act, including the power to prescribe conditions of registration for insurance companies.

“Section 30 of the Insurance Act requires companies to obtain prior approval from the commission whenever there is a change in the beneficial ownership of the company. However, there is no specific requirement for companies to obtain prior approval whenever there is a change in senior management. The CFATF considered this a deficiency in the insurance legislation.

“It was deemed to affect the commission’s ability to prevent criminals from doing business in the insurance sector after the initial company registration. FATF Recommendation 26 requires that financial supervisors take the necessary legal or regulatory measures to prevent criminals or their associates from holding, or being the beneficial owner holding a management function in a company. It was determined that insurance companies should obtain prior approval from the Insurance Commission for any change in senior management in the company, to mitigate against this risk.”

“In carrying out its power to supervise insurance companies under the Insurance Act, the Commission determined that it was necessary to require insurance companies to obtain prior approval of the Commission whenever there is a change in senior management in the company.”

 

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