The Bahamas passes Bill in the House of Assembly to Criminalize Financial Schemes

The Financial and Corporate Service Providers (FCSP) Bill 2020 was passed in the House of Assembly of the Bahamas on November 4th, 2020. The Deputy Prime Minister of The Bahamas, the Honourable K. Peter Turnquest stated that that the Bill has defined certain financial schemes as illegal. He explained that “these may take the form of pyramid schemes, Ponzi schemes and advance-fee schemes, among others, and many of them have plagued unsuspecting Bahamians for generations. Further, these schemes are fundamentally detrimental to investors and the public. The Bill criminalizes the promotion or marketing of these financial schemes and empowers the Securities Commission to dissolve them where circumstances so warrant. It also empowers the Commission to investigate and enforce against persons engaged in financial schemes.”

 Deputy Prime Minister Turnquest stated that the FCSP Bill is designed to give the Securities Commission oversight of non-bank financial services and corporate services to protect these from improper use and abuse. The Bill also makes specific provisions that empower the Securities Commission to take administrative and other actions to protect public interests. Additionally, he pronounced that the Financial and Corporate Service Providers Regulations, 2020 which has been drafted to support The FCSP Bill, expands on some of the standards that must be maintained by licensees.

 The proposed Regulations will place a duty on licensees to uphold the highest standards of professional conduct. Deputy Prime Minister Turnquest noted the protection of clients’ personal data in keeping with the Data Protection (Privacy of Personal Information) Act as well as measures to address the collection, storage and prevention of the unauthorized access to personal data are among the issues that the Regulations will focus on.

 The Honourable Deputy Prime Minister further elaborated that in order to protect the financial industry and the reputation of The Bahamas from the threat of money laundering (ML) and terrorism financing (TF), the FCSP Bill also requires licensees to comply with the Financial Transactions Reporting Act, 2018 and the Anti-Terrorism Act, 2018. Moreover, it will be necessary for licensees to possess sufficient financial resources, be solvent and obtain adequate insurance coverage suitable for their business operations. “These all work to protect investors, both by increasing the likelihood that operators are financially prepared for the activities they will engage in and may add some protective measures for aggrieved consumers” he added.