The new Securities Industry Act, 2011 was passed in the House of Assembly today, after its first reading. It will now have to progress to the Upper Chamber for approval.

A BFSB SIA Review Team has worked on providing input to the Regulator, the Securities Commission of The Bahamas, over the course of consultations and is happy to see the conclusion of joint efforts to revamp securities legislation in The Bahamas.

The new Act provides clarity on the definition of securities and the activities that would require registration with the Regulator. Other key changes include the SCB’s information sharing and enforcement powers and the prospectus disclosure regime. The new Act represents a more flexible form of legislation where the key legal obligations appear in the Act itself, while detailed requirements are prescribed by subordinate instruments such as Regulations or Commission-made Rules that have the force of law. The Commission was keen to move to this form, increasingly being used for securities legislation, recognising that the rapid pace of change in the industry requires Regulators to be able to respond quickly.

The defined purposes of the legislation - investor protection, fair and efficient markets, systemic stability, fostering investor education, reducing the (mis)use of regulated businesses for financial crime - all augur well for growth of the securities business at large. Industry will have to stay engaged in the rule making process to ensure this. The public private sector partnership that has been the modus operandi so far should continue to serve industry well and promote the desired sustainable growth.

The securities industry is a dynamic environment and one that complements the private wealth management sector. The strength of this jurisdiction is rooted in its long history in providing financial services, since the 1930s, and this has been reinforced by the ongoing commitment to maintain and grow its presence as a provider of high quality financial services. This new legislation builds on the knowledge industry and undoubtedly will secure greater value-driver opportunities for The Bahamas.

Note: The new Securities Industry Act was drafted to improve the old Act, in consultation with industry over a period of time. It is consistent with international best practices, both for securities legislation and on combating money laundering and terrorist financing.