B.V.I. Thursday, August 13 – The First House of Assembly of the Virgin Islands has passed the Financial Services Commission (Amendment) Act, 2009, paving the way for more transparent operations of the regulatory body.
The Bill moved by Premier and Minister for Finance Honourable Ralph T. O’Neal, OBE and largely recognised as an important bill for the Territory, received unanimous support in the House. Its goal is to further streamline the regulation and supervision of the financial services industry.
The amendments largely embody recommendations contained in a 2004 report by the International Monetary Fund (IMF) with respect to the BVI and the Financial Services Act, 2001.
According to Honourable O’Neal, the work of the Financial Services Commission (FSC) is scrutinised by the IMF and as such the amendments seek to increase the transparency of the FSC’s operations and bring it more in line with international standards.
“The international standards expected of all financial services jurisdictions should be more or less uniform and we try our best to live up to that standard,” Honourable O’Neal stated.
Although the IMF recommendations have been gradually incorporated into the FSC’s operations, there were some outstanding ones which have now been addressed in the 2009 amendment. Among them is the need for the Cabinet and the Board of the Commission to provide in writing reasons for the removal of a commissioner or the managing director from office to safeguard the autonomy of the regulatory body.
According to Honourable O’Neal, “the Government cannot unduly interfere in this autonomous body which is the regulatory body of financial services; they must be allowed to act without fear or favour but at the same time, the IMF expects the commission to operate with transparency in doing what it is supposed to do properly.”
Transparent operations is one of the key facets of proper industry regulation and as such, the amended act includes new corporate governance subsections providing for the FSC to lay its estimates, work plan, audited accounts, report and audited financial statements before the House; requiring the managing director and other senior staff to appear before a Select Committee of the House, if so summoned, by the Speaker to respond to questions regarding the estimates and work plan.
The amended act also authorises the FSC to take action against persons who undertake unauthorised financial services business or fail to comply with a directive from the FSC or fail to pay an administrative penalty imposed pursuant to financial services legislation.
Under the amended Act, the FSC is also authorised to require payment of the costs associated with the investigation of any licensee including the appointment of an examiner.
Another key provision of the Financial Services Commission Amendment Act, 2009 is the empowerment of the FSC to require regulated persons to prepare and submit returns to their business or affairs and to ensure the effective collection and analysis of statistics relevant to the financial services industry.
In wrapping up debate on the Bill, the Premier and Minister for Finance thanked his fellow members of the House of Assembly for fully supporting this important piece of legislation. He also expressed appreciation to those who had an input in amending the legislation including staff of the Attorney General’s Chambers and the FSC.
The Financial Services Commission functions as the autonomous and independent regulatory authority for financial services business operating in the BVI to ensure compliance with international standards and best conduct of business practices. The FSC has a mandate to promote accountability, transparency and good governance in the financial services industry.
British Virgin Islands News