The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamas saw a 15 per cent year-over-year increase in funds registered and domiciled in this nation in 2013, the Financial Services Minister said yesterday.

Speaking at the third Caribbean Conference on the International Financial Services Sector, Ryan Pinder said: “We have seen the international attack, and ‘name and shame game’, in recent years with a motivation of bringing down these jurisdictions.

“Having financial centres that are full service offerings, or diversified offerings, is imperative for preservation and growth. Having a focus on not only a wide range of product offerings is important, but so is having the service providers to support the elements of your industry.

“Ultimately attracting physical presence operations, both from a commercial offering side, but also client side, is fundamental. Attracting a wide range of products, services, and physical presence business operations demonstrates substance, credibility, and demonstrates a business centre, providing a platform with business purpose.”

Mr Pinder added that the Bahamas also enjoyed 60 per cent growth in captive insurance entities in 2013 as compared to 2012.

“What in the Bahamas pride ourselves on is that we have the most diversified operating entities in all sectors of the financial services industry: operating banks, operating trust companies, operating family offices, operating investment advisors and managers, operating fund administrators, operating captive insurance managers,” the Minister said.

“All of these operating companies, supporting our diversified product offering as a jurisdiction, demonstrating the credibility and substance of our industry, is proof that we are a legitimate and credible trade in services business jurisdiction.”

He added: “This strategy is working, and causing considerable growth in financial services in areas where one would not typically think of the Bahamas as a market leader. For instance, due to our product innovations and flexibility, we have seen an increase of over 15 per cent in funds registered in the Bahamas in 2013 as compared to 2012.

“Additionally, as part of our 10-year strategy we committed to re-launching captive insurance in the Bahamas. Through focused efforts we have seen a more than 60 per cent increase in captive entities in the Bahamas in 2013 as compared to 2012. We have also seen an increase in captive insurance managers being licensed in the Bahamas. Growth through diversification of products and services is where we see growth and success in the financial services industry of the Bahamas.”

Mr Pinder said a significant challenge to the financial services industry in the Caribbean were the mandates by multilateral institutions, such as the International Monetary Fund (IMF), the Financial Action Task Force (FATF), the OECD’s Global Forum, the International Organisation of Securities Commissions (IOSCO), the European Union (EU) through its Alternative Investment Fund Managers Directive (AIFMD), and the US through its Foreign Account Tax Compliance Act (FATCA).

“Each of these have made efforts to impose on jurisdictions regulatory and policy requirements to protect against financial crimes, and develop a standard for international best practices. The ability to comply and properly implement such systems preserves the integrity of a particular jurisdiction as a financial centre” said Mr Pinder.

Mr Pinder said that thr Bahamas has been a leader in complying with international best practices in all segments of the financial services industry.

“For example, the Bahamas achieved A certification by the International Organisation of Securities Commissions (IOSCO), better known as IOSCO A certification, an accomplishment so significant that the Commonwealth of the Bahamas became the sole sovereign and independent country in the Caribbean region who has achieved IOSCO A status,” he added.

“Likewise, the Bahamas has agreed to an MOU regarding AIFMD, a regime in the European Union governing investment funds to be marketed in Europe and compliance with certain information exchange and best practices.

“The Bahamas has worked with the OECD in respect of tax information exchange since 2002, when it committed to implementing the international standards of transparency and information exchange. The Bahamas has an exchange of information (EOI) network covering 30 jurisdictions; 26 of these agreements are presently in force, and the Bahamas has taken all steps for its part which are necessary to bring the remaining agreements into force.”