The Bahamas can boast an outstanding record of political stability, progress and stewardship, providing an efficient basis of common law, and the longstanding commitment and continuity of its people and government to the industry and its clients.
Market responsiveness has played a key role in maintaining the strongest possible competitive position for The Bahamas in financial services. Legislation that reflects evolving international standards and client requirements is seen as fundamental to this competitive positioning by both Bahamian policy makers and the private sector.
In this regard 2010 saw a raft of initiatives, with a series of new and amendment Acts already on the table for the current year.
The 2010 legislative agenda covered several pieces of industry and business-relevant legislation.
The Arbitration Committee of the Bahamas Financial Services Board (BFSB) worked closely with the Office of the Attorney General and the Bahamas Maritime Authority to develop a comprehensive and modern Arbitration Act 2009 and Arbitration (Foreign Arbitration Awards) Act 2009. Both became law in 2010.
BFSB’s Funds Working Group worked diligently to affect recommended changes to the funds regime and the Investment Funds (Amendment) Act, 2010 was enacted to redefine and clarify certain words and phrases for connected purposes. The act clarified the definition of Non-Bahamas-Based Funds, Recognised Foreign Funds and Professional Funds; it also amended the audit filing deadlines.
An important market oriented initiative relative to Restricted Banks was undertaken by the Central Bank of The Bahamas with the issuance of its “Guidance Notice on the Waiver of the Minimum Number of Shareholders Requirement for Applicants for a Restricted Bank and/or Trust Company Licence”. The review and adjustment of the regime was based on a risk based analysis of this specific class of licensee, following representations from industry.
The External Insurance Act, 2009/External Insurance Regulations, 2010 provides The Bahamas with state of the art legal and administrative machinery with which to compete in the international insurance market; for example, it establishes a clear and efficient structure whereby a captive insurance (or reinsurance) company covering risks outside of The Bahamas may be established in the jurisdiction.
The IBC (Amendment) Act, 2010 clarifies striking off and restoration powers of the Registrar General and the payment of related fines.
To simplify the legal and regulatory requirements to operate a business and to facilitate a “one stop shop” for business licence applications, the Government enacted the Business Licence Act, 2010. This legislation repeals and replaces the previous Business Licence Act.
The enabling International Tax Cooperation Act, 2010 gives effect to the implementation of the newly signed TIEAs ( 23 in total ) and amends The Bahamas and United States TIEA Act and Regulations
This year is shaping up to be equally progressive in terms of financial services bills. Proposed changes to Trustee, Perpetuities and Purpose Trust legislation will be forthcoming as well as the introduction of the Bahamas Executive Entity.
It is also anticipated that the Investment Funds Act, 2003 and the Segregated Companies Act, 2004 will undergo review in 2011.
Already in force is the Probate and Administration of Estates Act 2011, which consolidates the law on the procedures for obtaining a grant of representation in respect of the estate of a deceased person and for the administration of a deceased person's property.
In addition the Securities Industry Act was passed in the House of Assembly and is awaiting passage in the Upper Chamber, with the draft Regulations expected to be signed by the Minister simultaneously with the coming into force of the New Act.
The new securities legislation enhances the reputation of The Bahamas in the international financial services and capital markets industries, and meets the ‘principles and objectives’ set by the International Association of Securities Commissions (IOSCO). Included in the reforms under the SIA are the registration of industry participants by function rather than practice; provisions for information sharing; enhancement of the SCB’s regulatory and investigative powers; simplification of the disciplinary process; greater minority shareholder protection; and new disclosure and transparency provisions. The Act addresses certain deficiencies in the existing Securities Industry Act, 1999 that had been identified by the International Monetary Fund, protects investors from unfair, improper or fraudulent practices and fosters fair and efficient capital markets and confidence in the capital markets in The Bahamas. Of note, entities incorporated or registered under the Companies Act as well as the International Business Companies Act, 2000 will be eligible to apply for registration to conduct securities business under provisions of the new Act.
Further to the focus given to improving the business environment through the 2010 Business License Act that seeks to provide for completion of the review of applications within seven days, the Government has announced a 21-day response for applicants for permanent residence whose investment in a residence exceeds US$1.5million and for qualifying investors. In addition, institutionalising efficiencies in the delivery of the public services is sought through a US$9 million investment in an e-business programme, with the first series of key deliverables set to be launched in July 2011.
The Bahamas: Always Looking Ahead
These legislative and regulatory developments reflect The Bahamas‘ unequivocal pursuit of an ever-improving platform for owners of capital to conduct their international business, to manage their private wealth and to make The Bahamas their home.
We believe it is critical that the jurisdiction remains focused on market development while moving through the change process that is not only taking place globally but within The Bahamas as well. The latter is not only mandatory to keep pace with international developments but equally important to build relationships and create positive momentum for the vision that is now driving business development.
The vision - to be a globally competitive international business centre for wealth management, capital investment in the Americas and emerging markets, and residency - brings to bear the unique strengths of The Bahamas:
Wendy Warren is managing director of Caystone Solutions. Wendy served for 11 years as CEO and Executive Director of the Bahamas Financial Services Board (BFSB). BFSB works with The Bahamas government, regulators and private industry to ensure The Bahamas provides global clients with best in class financial services. Beginning her professional career in 1988, Wendy has worked in a variety of roles in the fund administration, wealth management and audit fields. She has served on various boards and committees including Bahamasair Holdings, Bahamas Electricity Corporation, Bahamas Trade Commission, the Financial Services Consultative Forum and the Bahamas Association of Mutual Fund Administrators. Wendy is a Chartered Accountant and holds a Bachelors Degree in Accounting from the University of Waterloo, Canada.