The Bahamas has made very substantial progress towards the development of an effective regulatory regime over the past two years according to the International Monetary Fund (IMF) report titled "The Bahamas: Assessment of the Supervision and Regulation of the Financial Sector – Review of Financial Sector Regulation and Supervision".
The IMF report said this progress is not only reflected in the regime of legislation that has been enacted since December 2000, but also in the structural and operational arrangements put in place by the agencies that have been entrusted with supervisory responsibilities.
Both the Central Bank of The Bahamas and the Securities Commission of The Bahamas were given high marks by the IMF due in large part to strong leadership and professional, dedicated staff. "This process has placed a considerable burden on both the agencies themselves and on the private sector institutions that they regulate,"the report stated.
The IMF noted that the majority of this transformation appeared to be complete at the time of their review in 2002 while work continues in several areas that remain under examination and development in the jurisdiction.
The objective of the IMF report was to assess the extent to which the regulatory and supervisory arrangements in The Bahamas complied with certain internationally accepted standards and measures of good practice. The scope of the assessment included the banking, securities and trust and company service sectors.
"The report reinforces the view that The Bahamas is a well-regulated jurisdiction and a leader in banking, private banking and asset management among international financial centres," says Bruno Roberts, Chairman, Bahamas Financial Services Board.
The Bahamas' system of regulation, designed to ensure that institutions operating from this jurisdiction conduct their affairs in accordance with best practices, has its origins in the 1960s with the regulation of banks and trust companies. Today, the Group of Financial Services Regulators (GFSR), comprised of the Central Bank of The Bahamas, the Securities Commission of The Bahamas, the Registrar of Insurance Companies, the Inspector of Financial and Corporate Service Providers and the Compliance Commission, ensures adherence to international regulatory and supervisory standards through a comprehensive and progressive framework. Bahamian regulators adhere to the principles espoused by the Basel Committee on Bank Supervision, the International Organization of Securities Commissions (IOSCO), the Council of Securities Regulators of the Americas (COSRA), and the International Association of Insurance Supervisors (IAIS).
The Bahamas' Financial Intelligence Unit is a member of The Egmont Group of Financial Intelligence Units.
The Office of the Attorney General, the Regulatory agencies and the Financial Intelligence Unit are empowered to investigate and take firm action where improper activity is suspected. These agencies are fully empowered to cooperate with legitimate, specific requests by foreign jurisdictions for assistance on regulatory issues and matters relating to money laundering and other criminal matters.
The Bahamas has entered into mutual legal assistance treaties with three major countries. They are: the United States of America, Canada and The United Kingdom. Requests for legal assistance in criminal matters by all countries are expedited pursuant to the Criminal Justice (International Cooperation) Act, 2000.
Executive Director Wendy Warren notes that "BFSB is pleased that the hard work of The Bahamas government, regulators and industry participants has been recognised and validated by an independent agency such as the IMF." She further says, "BFSB will continue to work alongside government and regulators to support the required steps to expand opportunities for growth in the sector through an appropriate regulatory regime."