The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank expects to have a new Central Securities Depository (CSD) ready by the 2018 fourth quarter as part of an overhaul of the Government's debt management practices.

The regulator's 2017 annual report said a review conducted by the Commonwealth Secretariat, with Central Bank and government support, "targeted several key areas for reform" that the latter two are now moving to address in practice.

"A critical foreseen reform is the passage of a Public Debt Management Act to provide the legislative framework for efficient public debt management," the Central Bank said. "The Act would also promote efficiencies related to dematerialisation, debt management strategies and the oversight of public enterprises' debt operations.

"As an important component of the enhanced public debt management regime, in accordance with international best practices, the Bank is on course to implement a Centralised Securities Depository (CSD) to assist with managing Government securities' operations, and promote improved monitoring, oversight and transparency.

"The Bank has already made significant progress towards the development of its CSD, and expects that it will be ready for deployment during the fourth quarter of 2018."

Any interest savings that the Government can achieve from an improved debt management strategy are vital, given that it continues to struggle under the weight of a near-$8 billion national debt and $300 million-plus annual fiscal deficits that were described as "stubborn" by the Deputy Prime Minister.

The Central Bank, meanwhile, added that it was also working to modernise and improve its short-term Treasury Bill processes. "These enhancements, which are scheduled for deployment in 2018, are expected to improve the overall efficiency of this process and promote more timely reporting, consistent with international best practices," it added.

The regulator is also proposing reforms to amend the Banks and Trust Companies Regulation Act 2000 in relation to the handling of dormant account balances that institutions transfer to it.

"The reforms would extend custodial protection to new asset classes (including securities and precious metals), and transfer unclaimed assets exceeding a certain amount to the Government after a period of 10 years in the Dormant Accounts Fund," the Central Bank said.

"The Bank is also exploring technology upgrades and administrative reforms to facilitate easier queries of the dormant accounts' register by the public. At end-2017, a total of 41,508 facilities had been transferred to the Bank's custody, accounting for an estimated $80.9 million in unclaimed funds."

The majority of these accounts, some 33,764, contained Bahamian dollar balances, but the greatest value - some $52 million - was denominated in US dollars.