Financial services sector to get boost from several new legislations

The government has proposed several regulations in the upcoming year to improve one of the territory’s main economic pillars—the financial services sector.

In yesterday’s Speech from the Throne address, Governor John Rankin announced that the government has proposed amendments to the Financial Services Commission Act to deal with exceptional circumstances that affect the sector.

It is designed to ensure a faster process for decision-making, to properly align the provisions of the Act with those of the Financial Services (Exceptional Circumstances) Act, 2020, and to address how banks and insurance companies function during catastrophic natural disasters such as earthquakes, hurricanes, and pandemics, inclusive of their procedures and applied costs.

“The proposed reforms will also provide necessary synergy with the provisions of the Virgin Islands Deposit Insurance Corporation Act to address issues concerning banks and other key financial institutions that may fall into financial distress, in order to better protect consumers,” Rankin added.

Regulatory fees in the sector

Another proposed legislation for this year is the Financial Services (Fees) Regulations, which will provide a comprehensive review of all the regulatory fees. The intention of this review is to enhance current fees and, where necessary, implement new ones.

The governor said another legislation that will be tabled is the Banks and Trust Companies (Amendment) Act, 2022. This Act will address issues relating to banks and other key financial institutions that may experience financial distress in hopes of better protection for consumers.

Governor Rankin said there will be reform to the BVI Business Companies Act and will mainly address issues surrounding struck-off companies, abolition of bearer shares, and record-keeping measures.

“The reforms will also include amendments to require persons wishing to act as voluntary liquidators of BVI business companies to be either licensed insolvency practitioners or persons resident in the Virgin Islands and holding specific qualifications and skills,” the Governor added.

Legislation to reduce conflict, financial crimes

Another piece of legislation on the government’s agenda is the Insolvency (Amendment) Act, 2022. According to Rankin, this will reduce the conflict between the role of the Office of the Official Receiver and the role of the Commission as the regulator of the financial services sector by withdrawing the responsibilities of the Official Receiver from the Finance Ministry.

Meanwhile, to better enhance the Virgin Islands’ international obligations to prevent the misuse of virtual assets for money laundering, terrorist financing, or proliferation financing purposes., the government will seek to enact the Virtual Assets Service Providers Act, 2022.

In addition, appropriate legislative reforms will continue to be carried out to the Anti-money Laundering Regulations, 2008 and the Anti-money Laundering and Terrorist Financing Code of Practice, 2008.

“This ensures that the Virgin Islands fully meets its technical obligations under the FATF [Financial Action Task Force] Recommendations in preparation for the CFATF [Caribbean Financial Action Task Force] mutual evaluation which is expected to commence later this year,” Rankin said.

The Financial Services Appeal Board Act will also be amended to address issues highlighted by the pandemic, thus enabling the efficient and smooth running of the appeal process for the benefit of both the Financial Services Commission and the appellants.