The Bahamas: A Balanced Approach to International Initiatives

Innovation in wealth and asset management services provided in The Bahamas parallels the level of changes in international regulatory standards heralded by the revised FATF recommendations, FATCA and other such initiatives. The Bahamas has taken a balanced and cooperative approach in responding to these worldwide initiatives at both the legislative and product level. This approach balances the need to ensure that clients operating in a compliant manner have the right to privacy with The Bahamas commitment to being a cooperative and transparent jurisdiction that adheres to international best practices. Indeed, The Bahamas has been fully engaged in the work of the various multilateral organizations. As a result, The Bahamas achieved a largely compliant rating in the Phase 2 Peer Review process of the Global Forum, which evidences its commitment to the practical effectiveness of its Tax Information Exchange Agreement (TIEA) obligations, and intention to ensure the effective implementation of the FATF revised standards.

The Bahamas has to date signed over 30 TIEAss and has implemented rigorous KYC/AML standards with regulated financial institutions being required to complete effective due diligence on clients.

Provided the timelines remain as currently contemplated, The Bahamas is expected to adopt the OECD’s Standard on the Automatic Exchange of Information (AEOI Standard) - through bilateral mechanisms - by September 2018. Of utmost importance to The Bahamas is that the receiving country is an ‘appropriate’ country for the receipt of such information, meaning that such country has in place the safeguards necessary to ensure the confidentiality, data protection and proper use of the information exchanged.

The Bahamas has also moved forward with its Model 1 IGA with the US in respect of FATCA which will include a secure FATCA reporting system, the establishment of The Bahamas Competent Authority and a number of other elements to effectively manage compliance with FATCA Model 1 IGA requirements. In keeping with the country’s public-private sector partnership for the development and management of its financial services industry the Ministry of Finance which is responsible for FATCA compliance, has worked closely with the financial services industry to ensure its views were incorporated into the Bahamas FATCA solution.

The Bahamas is the first independent country in the region with IOSCO ‘A’ Status, which it received last year. Appropriate steps are being taken to raise its profile as an attractive funds centre. To succeed as an international funds centre requires not only a proactive regulator but a willingness to respond to the changing needs of the market and develop new products accordingly.

Aside from securing the “A” Standard with IOSCO, The Bahamas’ financial regulator, the Securities Commission of the Bahamas (SCB) takes innovation seriously when it comes to furthering the evolution of its funds industry. For example, an unrestricted fund administrator on the island has oversight capabilities and delegated authorities that administrators in other jurisdictions simply do not have. They have the SCB’s imprimatur to register and launch Professional and SMART Funds (not Standard Funds), which brings undoubted speed-to-market benefits to the manager and streamlines the whole licencing process. Ongoing supervision is then conducted by the SCB in line with international standards.

Dr. Tanya C McCartney
Dr. Tanya McCartney is a UK trained barrister and chartered banker who since 2016 has served as the CEO and Executive Director at the Bahamas Financial Services Board. Over the past two decades Tanya has distinguished herself as a hardworking professional with expertise in the law, regulatory and gaming compliance, risk management, banking, and international financial services. She holds a Doctor of Business Administration from Edinburgh Napier University (Scotland, U.K.) for a programme of work entitled “Perspectives on Leading change: Exploring Change Readiness Strategies used in the Bahamian Financial Services Sector”. Tanya was appointed to the Senate of the Commonwealth of the Bahamas in 2001 being one of the youngest persons ever appointed to the Upper House where she served for five years. She vied for a seat in parliament in the 2002 general elections. She is a former President and founding member of the Bahamas Association of Compliance Officers. She is the co-chairman of the Bahamas Chapter of the global Association of Certified Anti-Money Laundering Specialists. Tanya is also an adjunct professor in the School of Business at the University of the Bahamas. She has served on several government boards over the years including The Public Hospital’s Authority, The University of The Bahamas and currently serves as Chairman of The Police Complaints Inspectorate and Deputy Chairman on The Airport Authority.