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New securities policies from Bahamas Regulator

May 22, 2018

Recently, three new securities policies were announced by the Securities Commission of Bahamas (SCB) which will affect different aspects of securities laws.

The following documents were published on the Commission official website: (i) Due Diligence Refresher Policy; (ii) Reclassification and Downgrade of an Unrestricted Investment Fund Administrator License; (iii) Regulatory Capital Calculation for Firms Managing and Advising on Securities Policy.

The first of the mentioned above policies establishes a new approach of the Commission to the due diligence procedures. This policy is applicable to persons licensed or registered pursuant to any of the Bahamas administered Acts (Securities Industry Act 2011, the Investment Funds Act 2003, and the Financial and Corporate Service Providers Act 2000). The policy states that those registered entities and licensees that were approved by the Commission and operating for more than five years, will be required to provide updated due diligence information and/or documents. A notification will be sent by the Commission in writing (via letter). Upon receiving this notification, registered entities and licensees will be given six weeks to deliver, to the Commission, all required information and documentation. In cases when information and/or documents are not filed within six weeks, as required, a penalty is charged in the amount of $100 per day, in the course of 60 days, for each day that the information and/or documents are not delivered. After that enforcement actions will take place.

The second policy refers to the legal authority of the Commission and its legal capacity to re-qualify Unrestricted Investment Fund Administrators (UIFAs) license to a “Restricted” type, that does not have the Commission's delegated authority to license investment funds. As the policy states, the Commission has the authority to reclassify an investment fund administrator’s license and entail inability to be engaged in respective licensed activities.

Last by name, but not by value is the document that addresses important issues related to the government regulation of mandatory capital. The government’s position is that companies registered to advise on securities or to manage those without holding clients’ cash and/or other possible assets, may use receivables for fees, retrocessions and commissions when calculating net regulatory capital. These changes were made due to the fact that receivables are often important for the operations of such firms and do not necessarily increase the firm's risk profile.

This is basic information regarding the policies. With Offshorelicense Ltd you always be aware of actual legislative changes!

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