FSC Amendment Bill Passed by the House of Assembly

On August 11, 2009, the House of Assembly passed the Financial Services Commission (Amendment) Bill, 2009 with significant amendments to certain provisions in the Financial Services Commission Act, 2001. One of the important issues addressed by the Bill is the independence of the Financial Services Commission as a regulatory body, in response to the concerns of the financial services sector about the new duties imposed on authorized or registered agents.

The Bill addresses a loophole in the current legislation which did not allow the BVI FSC to take enforcement action against defaulting licensed entities, due to the inadvertence of their registered agents. However, the House of Assembly passed the final Bill without strict liability provisions for registered agents. When the agents report a breach or offence committed by their licensees to the licensee or the FSC, they are provided immunity. If they fail to comply, they may be subject to a fine not exceeding $25,000.00.

Also, the Bill requires that the reasons should be provided by the Cabinet for removing members of the Board and the Managing Director of the Commission. It should be said that under BVI law there is no requirement that reasons should be given for administrative decisions, and this amendment would bring greater transparency to the decision-making process by the FSC and greater independence to the FSC in conducting its regulatory functions.

When assented by the Governor, the Bill will require the Commission to publish its estimates, work plans, audited accounts and financial statements, and annual reports to ensure greater accountability.