The Bahamas prides itself on adhering to the highest levels of financial services regulation, Deputy Prime Minister and Minister of Finance K. Peter Turnquest said at the Americas’ Central Securities Depositories Association (ACSDA) General Assembly at Atlantis, Thursday, April 12.
“In the year 2000, The Bahamas began to transform itself from a private banking centre into a true International Financial Centre, by passing modern legislation designed to make it easier for our jurisdiction to exchange information with other jurisdictions and regulators,” DPM Turnquest said.
“This is not, as you all realize, an isolated event, but rather a continuous exercise in strengthening legislation to ensure that we maintain international best practices when it comes to Know Your Customer, Anti Money Laundering and Combating the Financing of Terrorism.”
He said Successive Governments of The Bahamas through policy and action have sought and will continue to pursue best practices when it comes to ensuring the legality and transparency of the financial services sector.
“The regulatory bodies that are charged with monitoring these regulations include the Central Bank of The Bahamas for Banks and Trust companies, the Insurance Commission of The Bahamas for insurance companies and the Securities Commission of The Bahamas.”
DPM Turnquest said the Bahamian markets are young in comparison to some other markets.
He explained that one of the first equity offerings was that of the Finance Corporation of The Bahamas, also known as FINCO, which sold some of its ordinary shares to Bahamians in the 1960s. “This was followed by several more offerings, mainly by commercial banks and insurance companies.
“With the recognition that economic growth in a modern economy depends on an efficient and effective financial sector that is able to bring together domestic savings to mobilize capital for productive projects, the modern era of the Bahamian Capital Markets began with the creation of The Bahamas International Securities Exchange or BISX and subsequently with the establishment of the Bahamas Central Securities Depository or BCSD.”
The DPM said BISX was incorporated in September of 1999, interestingly about one month after the by-laws of ACSDA were established, and only eight months later in May 2000, BISX was formally registered as a Securities Exchange and began electronic trading (at the premises of the Exchange) with nine securities listings and two broker dealers.
He said at the time the nine listings were all ordinary shares and their combined market capitalization was approximately $820 million. BISX is registered with the Securities Commission as a Marketplace and is the only such registered entity in The Bahamas.
DPM Turnquest said, “Today, BISX has grown its domestic market to include 52 securities that are listed and traded electronically by its five broker dealer members.
“The securities listings now include in addition to ordinary shares, preference shares and debt instruments with a total value of over $5.2 Billion.”
He said two of these securities are Bahamas Depository Receipts with the underlying securities being a NASDAQ listed company and a Toronto Stock Exchange listed company.
The exchange also maintains a facility for the listing of mutual funds and currently has over 50 mutual fund listings with assets under management of over $4.5 billion.
The DPM said in 2009, BISX and two of its Brokers, Royal Fidelity and CFAL Securities Limited collaborated to create the Bahamas Central Securities Depository or BCSD; the host for this conference. BCSD is registered with the Securities Commission of The Bahamas as a Clearing Facility.
“Since beginning operations in 2009, BCSD has worked steadily to increase the number of services offered to the Bahamian Capital Markets and they are working to improve the level of sophistication for the delivery of those services.
He said the BCSD has grown with the addition to registry services to include pledging services, and the issuance of Depository Receipts on behalf of companies DPM Turnquest said, “Our depository is very young, but I know they are very keen to continue to collaborate with groups such as ACSDA to improve their offerings of all manner of registry and depository services, as well as their custody and clearing options to align these with the best practices and standards that groups such as yours promote.”