JIS News

Some 70 representatives of regional law enforcement and regulatory agencies, are currently participating in a three-day workshop, being held at the Half Moon Hotel in Montego Bay, St. James, which aims to equip them to better understand and counter the activities associated with unregulated investment schemes.
The workshop, which commenced on Wednesday (Oct. 29), is being jointly staged by the Financial Services Commission (FSC), the Caribbean Regional Technical Assistance Centre (CARTAC), the United States Agency for International Development (USAID), the United States Securities and Exchange Commission (USSEC), and the International Monetary Fund (IMF).
According to the FSC, the workshop comes against the background of the marketing of the schemes within Latin America and the Caribbean, a scenario being facilitated by cultural and historical factors. The Commission notes that as some jurisdictions tighten their control over the emergence of such schemes, perpetrators try to move to other regional locales.
“Thus it is becoming increasingly apparent that a regional approach is needed for Latin American and Caribbean regulators, to craft effective and cost effective responses to the threat posed by these fraudulent schemes,” an FSC statement notes.
In a message, read by FSC Chairman, Emil George, Minister without Portfolio in the Ministry of Finance and the Public Service, Senator Don Wehby, stressed the need to identify and interdict fraudulent investment schemes, which he said “have no place in the Jamaican financial landscape.”
Senator Wehby pointed out that the Government’s position regarding unregulated investment schemes, as articulated earlier this year, states that: “while investors must bear the risk of their own investment decisions, the Government has a duty to ensure that these investment schemes are conducted within a regulatory framework that ensures appropriate and timely disclosures, so their investors can more effectively evaluate the risk they take”.
Senator Wehby stated that in trading off market development against investor protection, it is clear that as the regulator assumes less of a direct role, mechanisms need to be put in place to ensure effective market discipline. This, he pointed out, is one of the key lessons to be learnt from the current global financial crisis.
Meanwhile, in her remarks, IMF representative, Anna Carvajal, bemoaned the “extensive damage”, which she said unregulated investment schemes have inflicted on the social and financial stability of some developing countries. She opined that regulatory systems implemented to control such schemes, are only as good as the supervisory and enforcement mechanisms that are established to ensure compliance.
Ms. Carvajal noted that in a global financial market, effective enforcement requires the ability of regulators to exchange information and cooperate with one another. This cooperation, she said, will help regulators to determine the best course of action in their respective jurisdictions, including the introduction of legal reforms to strengthen their enforcement framework, where necessary.