securities commission of the bahamas at a glance

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SUPERVISORY APPROACHThe Commission has adopted a two prong supervisoryapproach, which includes a rigorous and effectivelicensing process and a broad-based surveillanceprogramme. This includes off-site and on-sitemonitoring. The approach is in line with the achievementof the Commission’s supervisory goals, which include themaintenance of effective oversight, strengthening ofmarket confidence, protection of investors, and facilitationof orderly growth and development of the jurisdiction.AUTHORISATIONSThe Authorisations Department is the first point ofentry for the Commission’s registrants and licensees.This department performs the critical function ofprotecting the reputation of the jurisdiction byassessing the bone fides of applicants. The unitadministers the entry criteria set out in the SIA, 1999and IFA, 2003 and ensures that participants andproducts fit the appropriate profile for the country.This includes an appraisal of fit and proper status, andan evaluation of financial strength and performanceand an overall judgment on the suitability of theapplicant.OFF-SITE SUPERVISIONOff-site Supervision is the primary function of theMarket Surveillance Department. In performing thisfunction, the department reviews reports, liaises withauthorised firms and individuals and acts expeditiouslyon areas of regulatory concern to ensure proactive andeffective oversight of the industry.ON-SITE SUPERVISIONOn-site Supervision is undertaken by the InspectionsDepartment. On-site Supervision takes the form ofRoutine Examinations or Inspections for Cause. ARoutine Examination is scheduled based on theCommission’s assessment of risk. An Inspection forCause is conducted based upon some underlying reasonsuch as a customer complaint or some credibleinformation the Commission has been made aware of.Inspections or examinations may involve a full scope reviewof the business or may focus on specific areas of concern,depending on the circumstances of the registrant/licenseeand queries raised by the ongoing off-site monitoringprocess.Table 4 provides an overview of the Routine Inspections and Inspections for Cause held from 2004 - 2006.Table 4 – On-site Supervision History 2004-2006Constitution Type Dec. 31, 2004 Dec. 31 , 2005 Dec. 31, 2006RoutineInspectionfor CauseRoutineInspectionfor CauseRoutineInspectionfor CauseBroker-Dealer Class I - - 2 - - -Broker-Dealer Class II 2 - 4 - 3 -Securities InvestmentAdvisorsInvestment FundAdministrators7 - 5 - 5 -1 - 2 - 1 -TOTAL 10 13 910.....................................................................................
SECURITIES COMMISSION OF THE BAHAMAS 2006REGULATORY ACTIVITIESPOLICY DEVELOPMENTSIn 2006, the Commission approved and implementedseveral policies, which include:-(1) Commission Approved Reduction in SecuritiesExchange Annual Registration FeeThe Commission, in its February 2006 meeting,approved a decrease in the Securities Exchange AnnualRegistration Fee from $25,000 to $10,000. Theapproval by the Commission was in response to arequest from the Bahamas International StockExchange (BISX) to have the Securities ExchangeAnnual Registration Fee reduced.(2) Interim Money Laundering and CounteringTerrorist Financing GuidelinesIn July 2006, the Interim Guidelines on the Preventionof Money Laundering and Countering of TerroristFinancing replaced the existing Guidelines on Anti-Money Laundering issued by the Financial IntelligenceUnit in 2001, with regard to Anti-Money Launderingand Know-Your-Customer (KYC) procedures.The named guidelines issued by the Commission weredrafted to provide general guidance to licensees andregistrants on the standards required for compliancewith the Financial Transaction Reporting Act, 2000 andthe Financial Transaction Reporting Regulations, 2000.(iii) A change in their rules to allow shareholders totransfer rights to each other.Upon the Commission’s review of BISX’s requestsregarding the named amendments, the Commissionapproved them at its February 2006 meeting.(4) Approval to Amendments of BISX’s Fee SchedulesThe Commission, in October 2006, approved that BISXamend its Fee Schedule to facilitate the listing ofgovernment securities and the securities ofgovernmental agencies.BISX’s request was based on the recommendationscontained in the Report of The Bahamas StockExchange Committee that was approved by the Cabinetof the Commonwealth of The Bahamas and BISXShareholders.In considering the approval of the requests outlinedabove, the Commission noted that the desired feeamendments compared favourably with thosepresently being applied to equities listed on BISX.The amendments to BISX fee schedule can be found inTable 5 below:Table 5 – Overview of BISX Fee Amendments(3) Approval of BISX’s 2006 Corporate FinanceInitiativesThe Bahamas International Stock Exchange, in itsefforts to advance several corporate finance initiativesand collaborative efforts with the government, asoutlined in the government’s Capital Market PolicyStatement, requested that the Commission approve:(i) Changes to BISX’s capital structure;(ii) Amendments to BISX’s Articles of Association;andDESCRIPTIONGovernmentSecuritiesTransaction Price forGovernmentSecuritiesFEE(1) Application Fee – a one - time$2,500(2) Initial Listing Fee – to beremoved(3) Annual Fee – 1.5 base pointson the value of the offer(1) five basis points on the valueof each complete buy or sellorder matched per tradingsession.11
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