The 2004/05 financial year saw significant strides being made in the enhancement of the regulatory framework of the Financial Services Commission (FSC) with the introduction of and amendments to several bits of legislation.
Among them were the passing of the Pensions Act (2004) and the amendments to the FSC Act 2001, allowing the Commission to disclose information to a wider group of prescribed entities and individuals. These include overseas regulatory authorities and the Financial Investigations Division of the Finance Ministry.
According to a Ministry Paper tabled in the House of Representatives recently by Finance and Planning Minister, Dr. Omar Davies, other activities undertaken during the year included the conducting of 287 routine investigations relating to suspected breaches of relevant Acts in 25 cases. There were 40 cases relating to the fit and proper status of persons applying for a licence or registration as well as individuals seeking senior positions within the securities and insurance industries. In the meantime, there were three cases concerning market conduct practices and 218 cases relating to consumer complaints, 38 of which were carried over from the previous year. At the end of the period, 76 per cent of the total cases of complaints were closed. Meanwhile, fees collected from regulated organizations constituted approximately 95 per cent of the FSC’s total income and increased by $16.75 million or 7.74 per cent for the period.
According to the report, the addition of approximately 76 dealers and representatives to the securities industry, coupled with collections under the new fee structure implemented in September 2003, facilitated an increase of $23.8 million in revenue to $91.82 million for the period. In addition, capital and revenue grants received from the Caribbean Development Bank through a government assistance programme increased by $13.46 million to $36.49 million. Net cash flows from operations effected a $22.85 million increase in cash and investments, while deposit on computer equipment resulted in a rise in accounts receivable and prepayments of $24.41 million. The Ministry Paper said both positive variances accounted for approximately 94 per cent of the $50.36 million growth in current assets from $129.62 million to $179.98 million.
Also over the period, the Commission continued its efforts to maintain the integrity of the financial services industry through its sustained regulatory and supervisory activities. Although the Commission has been empowered to monitor the pensions industry with the introduction of the Pensions (Superannuation and Retirement Schemes) Act 2004, registration is contingent on the approval of the accompanying regulations by the Senate.
According to the report, when implemented, this should impact positively on the income of the Commission and further contribute to its goal of being a fully self-financing body. The Financial Services Commission (FSC) came into existence on August 2, 2001 by virtue of the Financial Services Commission Act. It has replaced the Office of the Superintendent of Insurance (OSI) and Unit Trusts and the Securities Commission.
The FSC supervises and regulates the securities industry, the insurance industry and soon, the private pensions industry. As such, it may be properly described as an integrated financial services regulator.The Commission has responsibility to manage the proper administration of the securities and insurance laws. In doing so, it oversees the registration, solvency and conduct of approximately 114 firms and over 1,200 individuals doing business in the securities and insurance (life and general) industries.