BIBA-ICAB joint seminar raises FSC concerns
Friday March 05 2010 | 03:38 PM

While Prime Minister David Thompson pledged during last Monday’s public/private sector national economic consultation to fast track the establishment of the long mooted Financial Services Commission (FSC), some representatives of the industries that will be most affected have raised concerns about the current draft bill.

Chief among these concerns are, whether all categories of international businesses should indeed fall under the ambit of the FSC; the need to modernise the different pieces of current legislation whose administration will fall to the FSC once it is up and running; the need to guarantee a fully independent and functioning appeals tribunal; and the need to ensure that this extra layer of regulation would enhance Barbados’s international reputation without eroding its competitiveness through bureacratic inefficiencies.

These concerns were raised when the Barbados International Business Association (BIBA) and the Institute of Chartered Accountants of Barbados (ICAB) recently held a joint luncheon seminar to allow their respective members, as well as non-members, in the areas of insurance, cooperative societies, non-banking financial institutions, and the operation of International Business Companies (IBCs) and Societies with Restricted Liability (SRLs), to discuss the provisions of the FSC draft bill that was released by the Special Projects Unit of the Ministry of Finance, Investment, Telecommunications and Energy for feedback in January.

Following an overview of the draft bill by attorney-at-law and Lex Caribbean partner Melanie Jones, the strengths and weaknesses of the draft bill were brought out through a panel discussion featuring ICAB Vice President Andrew Brathwaite; Connie Smith, the chair of BIBA’s Service Provider Committee; Howard Edmonds, financial sector advisor with the Caribbean Regional Technical Assistance Centre; Anthony Pilgrim, general manager of the Barbados Co-operative and Credit Union League; and Marlon Yarde, chief executive officer and general manager of the Barbados Stock Exchange.

Both Jones and Smith pointed out that IBCs and SRLs are not in the business of providing financial services but rather were involved in mining, pharamceuticals, manufacturing, property development, consultancies and inter-treasury functions not for third parties – so it was questionable for these to have to be licensed and regulated by an entity and legislation geared toward oversight of financial institutions.

Brathwaite echoed Jones’ concerns over the need to ensure that the quality of staffing met the high levels of competence necessary for such an important agency, while Edmonds added that once quality staff was recruited, emphasis had to be placed on retaining them through adequate compensation in order to avoid high turnover of critical staff. Edmonds also stressed that the FSC needed to be autonomous of Government in the same way that Central Banks were meant to be autonomous. The issue of autonomy was also raised by Pilgrim as it related to the appeals tribunal, where he noted that the FSC had the power to appoint the chair and members of the tribunal, which he cautioned could lead to conflicts of interest.