Bahamas Securities Industry Reform Under Way
Wednesday April 27 2011 | 04:39 AM

A redrafted Securities Industry Act for the Bahamas has passed its first legislative stage, and, if approved by the Upper Chamber, will provide additional clarity on registration requirements, and bring the Securities Commission's powers up to date.

Based on recommendations made by a recent International Monetary Fund (IMF) Technical Assistance Mission, and during a prolonged period of industry consultation, the Bahamas Securities Industry Act, 2011, aims to improve the previous Act. In addition, a special Review Team engaged with the Regulator and the Commission over the course of the consultation. The Bahamian House of Assembly passed the amendments on April 18, and it now falls to the Upper Chamber to follow suit.

According to the government, the new legislation is consistent with international best practice, both for securities legislation and the Financial Action Task Force's recommendations on combating money laundering and terrorist financing. It is hoped that greater value-driver opportunities will arise as a result.

Building upon the IMF's findings, the updated Act is designed to provide clarity over the definition of securities, and on the activities deemed to require registration with the Regulator. The information sharing and enforcement powers granted to the Securities Commission have been also been altered. The Commission has declared that the rapid pace of change in the industry requires Regulators to be able to respond quickly and, as such, the Bahamas legislation should be amended in response.

A more flexible form of legislation, where key legal obligations appear in the Act itself, and additional detailed requirements are prescribed by either regulations or Commission-made rules, was considered important.

The government defines the purposes of its Securities Industry legislation as: the securing of investor protection, fair and efficient markets and systemic stability, the fostering of investor education, and the reduction of the (mis)use of regulated businesses for financial crime. These goals, from the government's point of view, are good indicators for the growth of the securities business at large.

Moreover, the Bahamas is keen to promote the efforts it is making to maintain and grow its presence as a provider of high quality financial services, and the amendments to its Securities Industry regime are to be seen as part of this endeavour.