Minister of Finance and the Public Service, Hon. Audley Shaw, has announced the lifting of a moratorium on the registration of new Unit Trusts and new Unit Trust products.
Speaking at a press conference, today (February 18), at the offices of the Financial Services Commission (FSC), in Kingston, Mr. Shaw informed that in the 1990s, a moratorium was placed on the registration of new Unit Trusts and new Unit Trust products.
“However, the time has come to revisit this policy, in light of market developments and initiatives to progressively strengthen financial sector regulations,” Mr. Shaw said.
In his remarks, Executive Director of the FSC, Mr. Rohan Barnett, explained that the moratorium on the granting of licences for new Unit Trusts as well as new Unit Trust products was a result of inadequate regulatory framework.
Minister of Finance and the Public Service, Hon. Audley Shaw (right), addressing a press briefing at the Financial Services Commission’s (FSC) New Kingston offices, on February 18. Looking on is Executive Director of the FSC, Mr. Rohan Barnett.
“This regulatory framework has now been enhanced through amendments to the Unit Trust Regulations. These enhanced regulatory measures are being put in place to ensure that a Unit Trust investor has a similar level of protection to that afforded an investor in a Mutual Fund registered under the Securities (Mutual Funds) Regulations,” Mr. Barnett said.
In the meantime, with regard to Mutual Funds and Unit Trusts, a consultant from the Caribbean Regional Technical Assistance Centre is currently assisting the FSC with the development of collective investment scheme legislation over the next five weeks.
“Our aim is to not only focus on Mutual Funds, but to also enable the securities industry to accommodate hedge funds, private equity funds and other innovative products for more sophisticated investors,” Mr. Barnett said.
The Executive Director also noted that as the securities industry begins to diversify away from the dominance of the current repo model and move to a free-based brokerage service that is focused on the appreciation in the value of equities, there will soon be a need for a more comprehensive investment advisory legislation.
“In fact, it is anticipation of this that we see certain market players seeking to establish new institutions with non repo business models. We are also exploring the review and strengthening of the FSC legislation to improve regulatory and supervisory capabilities in respect of consolidated supervision and combating unregulated financial entities,” Mr. Barnett said.
The mandate of the FSC is to supervise and regulate the securities, insurance and private pensions industries. As such, the FSC may be described as an integrated financial services regulator.
The FSC has a responsibility to manage proper administration of the pensions, securities and insurance laws. In doing so the FSC oversees the registration, solvency and conduct of approximately 614 firms and over 4,800 individuals doing business in the pensions, securities and insurance (life and General) industries.