NASSAU, BAHAMAS – The Bahamas Financial Services Board chief yesterday announced “Clear Choice” as the new brand for the financial services sector, reaffirming a commitment to compliance following a recent EU listing of The Bahamas as non-cooperative with Anti Money Laundering and Countering Financing of Terrorism (AML/CFT).
Outlining in full detail how the nation has committed to changes in legal and regulatory regimes, BFSB Executive Director Tanya McCartney said international regulatory standards have made the compliance process more complex for international financial centres (IFCs) like The Bahamas. However, she clarified that this process has also improved the international environment of unwanted exchanges and business relationships and changed how the needs of High Net Worth (HNW) clients are handled.
“In today’s ever-changing global regulatory environment, it is not business as usual, it is business re-engineered to adhere to global,” she said. “For international wealth planners, there is no doubt that IFCs will continue to play a very important role in the delivery of wealth planning tools to meet the needs and objectives of HNW individuals who seek to diversify investments. It is against this backdrop that the Bahamas has taken the initiative to brand itself as the ‘Clear Choice’ for financial professionals, maintaining its place as one of the world’s foremost wealth management centres.
“Times are different from when the Bahamas’ financial services industry started over 85 years ago. We recognize the need to be innovative in our approach; this is essential as financial services is integral to the sustainability of our economy. It is our second industry, the first being tourism, and accounts for more than 15 per cent of our [Gross Domestic Product].”
In line with what is happening globally, McCartney pointed out that The Bahamas was instituting changes to the legal and regulatory regimes that govern its financial sector. The moves were made in direct response to be compliant with the Organization for Economic Cooperation and Development (OECD) and European Union criteria on tax governance, with the jurisdiction engaged in discussions with these international bodies. New legislation has been drafted to ensure the achievement of the right balance of compliance with the international standards, business and economic sustainability.
These changes include, the passing into law the Multinational Entities Financial Reporting Act, which sets out a comprehensive framework for Country by Country reporting in line with the Base Erosion and Profit Shifting initiative; The initiation of Automatic Exchange of Information with 35 jurisdictions – 19 of which are EU jurisdictions -in accordance with the Common Reporting Standard, with the first exchanges having taken place in September 2018; Passing the Commercial Entities (Substance Requirements) Bill, 2018 this month in Parliament, which addresses EU concerns regarding entities having economic substance; and Beneficial Ownership Register Bill, 2018 as well as the Removal of Preferential Exemptions Bill, 2018 to address the concern of ring-fencing.
“These measures and commitments send a loud and clear message to the international financial services’ community that the Bahamas is serious about adhering to global standards and remaining a clean and compliant jurisdiction committed to the principles of transparency and cooperation,” McCartney said.
Among the changes, she said The Bahamas was embracing innovation, with new legislative framework to encourage and facilitate new, cutting edge business ventures to establish themselves in the dominion. Also updated was a complete overhaul of legislation governing investment funds’ regulatory framework is nearing completion by the Securities Commission of the Bahamas. The overhaul includes an updated Investment Funds Act as well as some forthcoming changes to the overall securities industry legislative regime.
As one of very few truly independent and sovereign territories operating as an IFC, McCartney ended the statement by listing the value that The Bahamas offers. They include the delivering of superior service in structuring and tailoring financial services products to meet client needs; providing expertise and innovative ideas in the area of trust and private banking, capital markets and most recently, family office business; a common law judicial system with the highest Court of Appeal being the UK Privy Council; flexibility in streamlining processes, technology and infrastructure; a large cadre of professional, educated and skilled workforce; a prime destination that is within easy reach from almost anywhere around the world with its proximity to the United States.