Govt. Moves to Protect Public Against Unregistered Investment Schemes

Government has moved to allay concerns raised regarding the operations of unregistered investment schemes in Jamaica, by instituting measures to safeguard the interests of investors.
Speaking on (January 8), at the post-Cabinet press briefing at Jamaica House, Minister without Portfolio in the Ministry of Finance & the Public Service, Senator Don Wehby told journalists that the measures to be taken would incorporate action by two of the Ministry’s agencies, the Financial Services Commission (FSC) and Financial Investigation Division (FID), as well as legislative intervention.
“We have legislation in place, through our agent, the Financial Services Commission; and the mandate of the FSC is to protect the investors of this country. The Financial Services Commission will continue taking action, prescribed under the law, to prevent entities from offering securities to the public in contravention of the Securities Act. This will involve the issue of cease and desist orders, and the engagement of the Financial Investigation Division, and their instituting prosecution where necessary. The FID and the FSC will be working a lot closer in terms of dealing with these unregistered schemes,” Minister Wehby outlined.
“Cabinet has also given instructions for urgent steps to be taken to ensure that legislation adequately addresses the operation of investment clubs,” he added.
Mr. Wehby noted that in other jurisdictions where investment clubs operate, such entities are limited in the number of members they may have and are required to allow these persons to participate in investment decisions made by the club.
“For example, in the USA, members (of investment clubs) are limited to 100, and every member of the club must participate in the investment making decisions. I think that is critical, and that is something that we need to look at,” the Minister pointed out.
On the matter of regularization of operations, Mr. Wehby said the FSC would consider application from any entity and/or licensing under the existing legal provisions. “Such applications will be processed in accordance with established criteria, which include minimum capital adequacy, fit and proper assessment of principals and operating officers, and the filing of appropriate returns to enable regulatory oversight,” he said.
The Minister said that genuine investment schemes committed to proper standards of operational conduct should have no reluctance in submitting themselves to this regulatory framework. “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 risks they take. The government will not allow for them to elude oversight and to expose to irresponsible risk, the hard-earned savings of innocent members of the public,” Minister Wehby warned.