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Securities Commission introducing new fee schedule

Provisions in the Securities Industry Bill 2010 will allow the Securities Commission of The Bahamas(SCB)to levy charges for the cost of on-site inspections, and a new fee schedule for registrants and licensees is on the way.

The announcements came during the Bahamas Association of Securities Dealers'(BASD)first seminar for the year, held on Monday at the British Colonial Hilton under the theme”Capital Markets Education-Building An Economic Future”. Chairman of the SCB Philip Stubbs said the increases were necessary to ensure the regulator properly serviced the industry.

“Another challenge for the commission is that of finding adequate resources,”Stubbs said.”It means having the financial resources to do the things we need to do and provide the service to implement the new and modern legislation.”

Stubbs said it was too early to disclose what the fees were or how they would be applied, but he said the new fee regime would go to the industry for consultation before any implementation. He added that the SCB is working to prepare the industry for rules which will come into effect as soon as the bill is passed, and the increases were a part of those rules.

“There are a number of rules that would be effected immediately upon the act coming into force. We are working on them right now and are very close to having them finalized,”the chairman said.”It should be done within a few weeks.”

Also presenting at the seminar was Dominic Archer, deputy manager, inspections at the SCB. He said that the industry was likely to provide for the cost of on-site inspections under the proposed bill.

Section 48 of the latest version of the bill made available by the SCB, under header”Division 3-Inspections”does make provision for the regulator to pass on the cost of inspections for regulated persons under section 45 or market participants under section 47. The relevant points under section 48 of the bill read:

(3)The Commission shall assess charges to recover the cost of any inspection performed under this Division.

(4)Upon application, the Commission may grant an exemption regarding the payment of costs where the Commission considers it appropriate.”

Other regulators in The Bahamas already have provisions to pass on the cost of inspections to their various industries, Stubbs said yesterday. He added that it was a measure which really ensured that for inspections which were particularly onerous financially the SCB could recoup its costs.

“It gives us the mechanism whereby if we feel there is an extraordinary or special review we have the opportunity to have the licensee or registrants bare the costs,”the chairman said. According to Stubbs, ultimately the regulator should be self-funded and”essentially the industry should fund us as a regulator.”

The Securities Industry Bill 2010 was tabled in Parliament on December 15, 2010. One of the key features of the bill is that it will allow The Bahamas to become an’A’signatory to the International Organization of Securities Commissions(IOSCO)Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information(MMOU). One of the benefits of’A’signatory status is that it will allow citizens of countries like Brazil to use Bahamian-based institutions to administer their mutual funds. The benefit comes at the price of increased information gathering provisions for certain foreign authorities under prescribed conditions.

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