The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Securities Commission yesterday said a three-pronged reform package would “beef up” its capital markets enforcement capacity, enabling it to deal with civil law breaches more efficiently and quickly.

Hillary Deveaux, the regulator’s acting executive director, told Tribune Business that the combination of legislative amendments and rules changes would remove the “conflicting roles” created by the disciplinary process set out in the original 1999 Securities Industry Act.

“We need to beef up our enforcement process, and this is definitely the way to go,” Mr Deveaux told Tribune Business.

“It means that we will be able to address administrative matters and breaches of our legislation very quickly and effectively. The criminal matters will still be referred to the Attorney General’s Office.”

The Securities Commission is currently locked in consultation with the financial services industry over the proposed reforms, which include changes to the existing Securities Industry Act that allow it to call on the Royal Bahamas Police Force to assist with investigations.

The amendments also allow the regulator to conduct investigations and regulatory hearings into capital markets breaches, and impose sanctions on those found guilty.

And the Securities Industry Amendment Bill 2014 is designed to create “a clear separation between the Commission’s authority to investigate” and the disciplinary hearings it holds into those investigations, while providing for a final settlement not to be subject to appeal.

The same Bill, if passed, will also “allow the Commission to apply to the court for orders to enforce its directives, and orders to commence supervisory liquidations under securities laws”.

“We’re just making every effort to ensure any contravention of our legislation is addressed, if necessary through a disciplinary process,” Mr Deveaux told Tribune Business.

He said the 1999 Securities Industry Act had created ‘so many conflicts of administrative roles” when it came to the Commission’s efforts to investigate and punish wrongdoers.

Under that process, Mr Deveaux said disciplinary matters first went to the Securities Commission’s Board, before being sent on to the hearing panel. Once that panel was finished, its decision had to be referred back to the Board for “sign off”.

Confirming that this cumbersome process would be eliminated by the proposed reforms, Mr Deveaux said: “We’ve now developed this new rule, pursuant to the 1999 legislation, and the promulgation of the 2011 Securities Industries Act, to ensure we handle disciplinary matters effectively.”

The proposed Securities Industry Disciplinary (Hearings and Settlements) Rules set out the new, streamlined process.

“The Rules establish a hearing panel and the procedures/processes by which disciplinary matters will be addressed pursuant to the Securities Industry Act, 2011 (SIA),” the consultation document said.

“In summary, disciplinary hearings will be conducted by the hearing panel appointed by the Commission, comprising not more than nine individuals who are not Board members.

“The hearing of a disciplinary matter involves the parties presenting oral and documentary evidence before the panel. After the hearing, the panel will issue a final decision and, where applicable, impose appropriate penalties and/or sanctions.”

Mr Deveaux added that anyone aggrieved by the hearing panel’s decision in the new process had the right of appeal to the Supreme Court.

“I’m sure this will be welcomed by the industry, but I’m not going to second guess the result of the consultation,” Mr Deveaux added.