- The Senate on Friday, December 13, passed the Securities (Amendment) Act.
- The Bill was drafted due to the urgent need for the Financial Services commission (FSC) to be equipped with adequate legislative powers.
- Central to this are powers to investigate the conduct of market players.
The Senate on Friday, December 13, passed the Securities (Amendment) Act, to combat the establishment and proliferation of unlawful financial organizations.
In piloting the Bill, Minister of Justice, Hon. Mark Golding, said the Bill was drafted due to the urgent need for the Financial Services commission (FSC) to be equipped with adequate legislative powers to supervise and regulate the Jamaican securities market, in accordance with international best practices.
He noted that central to this are powers to investigate the conduct of market players and to enforce the regulatory provisions that are necessary to rid the industry of intolerable and harmful practices, such as fraud.
“Among other things, the Bill seeks to enhance the FSC powers to take enforcement action against ponzi schemes and other unlawful securities operations commonly referred to as unlawful financial organisations,” Senator Golding said.
He added that this was of particular concern to the International Monetary Fund and the implementation of regulations that address these activities has been an outstanding deliverable for Jamaica under the 2010 memorandum of economic and financial policies.
The Caribbean Policy Institute (CAPI) has estimated that there were 21 unregulated financial institutions operating in Jamaica in 2008, and by 2010, the Financial Services Commission (FSC) said the number grew to 63.
Senator Golding informed that two of the major ponzi schemes, Cash Plus and Olint took in over $35 billion from over 50,000 investors.
“This gives rise to various issues as a country, chief among which is our perception of money laundering. We have not grasped the understanding of the serious implication for not adhering to the verification processes as to sources of funds. This can result in great harm and have a severe impact on our financial systems,” he noted.
The Bill also seeks to modernise the legislative framework for the regulation of the collective investment schemes, and to deal with matters that will enable the FSC to meet obligations set out by the International Organisation of Security Commissions.
For his part, Senator Noel Sloley, while supporting the legislation, noted his concern that stakeholders did not have adequate opportunity to participate in the development of the Bill.
In his response, Senator Golding said the Jamaica Securities Dealers Association had submitted its review of the Bill to the Government.
Opposition Senator, Marlene Malahoo Forte, commended the Bill, especially its dealing with a problem that has caused a lot of pain to Jamaicans.
She however raised concern that persons committing an offence under the Act will be tried by a jury, and not by a judge in the Supreme Court alone.
Minister of Foreign Affairs and Foreign Trade, and Leader of Government Business in the Senate, Senator A.J. Nicholson rejected the suggestion, while saying that “this is the prime example of persons being tried by their peers.”
“When a citizen is hard done by in these circumstances, the best example is trial by jury,” Senator Nicholson said.
The Bill was passed with 10 amendments. It is part of the programme with the International Monetary Fund (IMF) that has to be passed in Parliament before December 31.