The Securities Commission of The Bahamas announced today that two important pieces of legislation which will improve the regulatory framework for the securities industry had come into effect earlier this month. Specifically, The Securities Industry (Anti Money Laundering and Countering the Financing of Terrorism) Rules, 2015 (“AML/CFT Rules”) and the Securities Industry (Amendment) Regulations, 2015 were made effective on 4th December and 8th December 2015, respectively.

The AML/CFT Rules bring the regulatory framework for the securities industry into compliance with international standards regarding antimoney laundering and countering the financing of terrorism. The rules are applicable to all registrants of the Securities Commission. The scope of the Rules covers, inter alia, internal control requirements, a requirement for implementation of a risk rating framework, verification of customer identity and record keeping requirements.

The Securities Industry (Amendment) Regulations, 2015 make changes to Regulation 69 and Regulation 88 of the Securities Industry Regulations, 2012 (SIR), which capture registrants’ obligations to ensure the suitability of client investments and the segregation of client cash and assets, respectively. Regulation 69 of the SIR has been amended by the deletion of paragraph two. This amendment removes the obligation from registrants to give their opinion prior to executing client-instructed transactions (buy, sell, or hold) which, in their opinion, may not be suitable for the client. Regulation 88 of the SIR has been amended by the insertion of a new paragraph which gives exemption to registrants who hold a license under the Bank and Trust Companies Regulation Act (Ch. 316) from the requirement to hold client cash and assets in a designated trust account separate and apart from the firm’s property.

Copies of the legislation can be found on the Commission’s website.