The Tribune

By ANNELIA NIXON

anixon@tribunemedia.net

The Securities Commission’s top executive yesterday warned there has been a 7 percent “stark decrease” in the number of investment funds registered in The Bahamas since last year.

Christina Rolle, the regulator’s executive director, told members of the Bahamas Institute of Chartered Accountants (BICA) that while this nation’s digital assets business was expanding it was suffering a contraction in other areas.

“As of October 31, 2024, the Commission oversaw a regulated 166 securities firms, one marketplace, one current facility, 43 investment fund administrators, 614 investment funds, 304 financial and corporate service providers, and 24 digital asset businesses and or token exchanges,” she said.

“Now these numbers show some very interesting trends for financial services in The Bahamas. We are seeing an increase in digital asset businesses. However, we have a stark decrease of almost 7 percent in investment funds since last year and even a moderate decrease in the number of traditional securities firms.

“While the industry anticipated some restructuring, causing a shift away from funds to less costly holding companies, I think this is the first time certainly since I’ve been at the helm of the Commission that we are seeing a decrease in the number of securities firms.”

Ms Rolle said the Securities Commission is “currently in the process of developing new regulations to go along” with the recently-passed Securities Industry Act 2024. These should be issued for public consultation before year-end.

“The amendments to the Investment Funds Act 2019 are also ongoing,” she added. “We’re still debating internally, and that’s probably mostly me debating internally, whether we are going to issue digital asset regulations or rules. And I know, you know, sometimes you think they want regulations, but in the industry we can always appreciate that regulations are very prescriptive an, when we issue them, both you and I are bound.

“And so we’re still contemplating whether we have enough things that we want to address in regulations or whether we may want to address some specific things, like exchange operations and other things, in rules. Maybe we want to address regulatory capital rules as opposed to trying to develop regulations to address a whole other sensitive area we may not be yet ready to address in regulations.

Ms Rolle then revealed: “We intend to roll out a monitoring programme for digital assets the first quarter of next year. So far we talked about 48 of our staff who have been trained. We probably have another 20 staff that would like to be trained in one turn. We’ve also conducted a gap review, a gap assessment with respect to our capacity both on the human resources as well as the technology side.

“And we intend to use that gap analysis to improve both sides of our capacity in terms of our examinations. So far for the year we’ve conducted 35 exams. We expect to end the year with about 38 exams being completed. We don’t usually carry on with exams in the month of December.”

Ms Rolle said the Securities Commission intends to have its strategic plan approved by the end of the year, and “a version of that plan” will be published publicly.

“One of the critical, critical recommendations in this paper will be the recommendation to the Government to implement mandatory pensions. We’re also currently developing a framework for ESG (environmental, social and governance) reporting as well as exploring DAO (digital asset offerings) and tokenisation models.

“And what we hope to put out is a draft framework for how a DAO could be registered, or tokens to be registered, or certain assets could be tokenised in the jurisdiction.”