Bahamas in Focus 2021

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The Bahamas has introduced a number of legislative amendments that were, in part, designed to modernise the regulatory framework applicable to banks and non-bank financial institutions Christel Sands-Feaste, Partner, Higgs & Johnson


onsistent regulatory updates contribute to a robust legal framework, which supports product development innovation, which sits at the heart of the Bahamian endeavors to encourage growth in the financial services industry. These continued efforts are critical for the jurisdiction to remain competitive as an international dimension. “From a regulatory perspective, the focus must be to establish this jurisdiction as one of excellence with respect to product development, but also best in class for regulation,” comments Christina Rolle, Executive Director, Securities Commission of The Bahamas (SCB). “This means understanding the risks, threats and opportunities in the space. It means staying on the cutting edge of developments, and having a keen and accurate sense of the direction of regulatory trends.” Kevin Moree, Partner, McKinney, Bancroft & Hughes, notes: “The increase in


international regulatory initiatives has allowed The Bahamas to demonstrate our willingness and capability to introduce and implement necessary legislation. This allows us to ensure we continue to adhere to international best practices, while maintaining our position as a premier international financial centre.” Focusing on the local regulatory environment, Carl Illing, ActiveTrades, adds: “The SCB has followed the worldwide trend and implemented new regulations in our industry which will have a positive long-term effect and help to improve the country’s fiscal reputation.” “The Bahamas has introduced a number of legislative amendments that were, in part, designed to modernise the regulatory framework applicable to banks and non-bank financial institutions,” Christel Sands-Feaste, Partner, Higgs & Johnson. “They also served to enhance the safety and soundness of the banking system and increase the level of protection afforded to depositors in domestic


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The trend for mobile trading on the go reached new heights during the Covid crisis. As long as there are low interest rates worldwide and savings accounts don’t generate any income, the international investor will venture into equities and commodities trading Carl Illing

banking institutions.” These include the Banks and Trust Companies Regulation Act, 2020, the Central Bank of The Bahamas Act, 2020 and the Protection of Depositors (Amendment) Act, 2020. According to Sands-Feaste, these amendments demonstrate the jurisdiction’s ongoing commitment to compliance with international best practices. The pace of international regulatory change is something regulators across the world must learn to contend with – it is a reality of doing business in a rapidly changing world, as new risks and threats emerge. Rolle outlines: “New regulatory initiatives provide opportunities for regulators and regulatory regimes to distinguish themselves. The Bahamas and its financial services regulators strive to be nimble and best in class as we address global standards, initiatives and best practices.”

The Bahamas is also witnessing progress in registrations under the Securities Industry (Business Capital) Rules. These rules are resulting in new crowdfund offerings live in The Bahamas and a local operator, Koodoo, moving into the global space with its crowdfund platform. Under these rules, small and medium-sized enterprises (SMEs) can raise a maximum of USD5 million via crowdfunding within a 12-month period. In addition, since codifying rules related to contracts for differences, there has been significant growth in this space. “There is also an increasing stream of applications for various businesses and products provided for by DARE. These go beyond digital exchanges, and include activities such as the transferring or exchanging of digital assets and products such as stable coins,” Rolle highlights.

FINTECH DEVELOPMENTS The deliberate move by The Bahamas to establish itself as a well-regulated hub in the Fintech space has been a major development “The regulation of the fintech sector through the Digital Assets and Registered Exchanges (DARE) Act, 2020 regulated the issuance, sale and trade of digital assets in The Bahamas,” explains Sands-Feaste. “We are seeing our efforts bearing their first fruit,” Rolle says, “One of the largest cryptocurrency exchanges in the world is now registered under the DARE Act.” This is FTX, the second-most popular crypto trading platform, which in September 2021 officially relocated its headquarters from Hong Kong to The Bahamas.

DIGITAL DIMENSION This digital dimension is a key building block of The Bahamas’s future success. As investor appetite for digital assets grows, The Bahamas i well-positioned to meet this demand. “Attractive opportunities for growth in The Bahamas include the establishment of businesses in the fintech space, such as digital asset businesses, and token issuers,” Sands-Feaste points out. She also believes the jurisdiction can benefit from


the establishment of single and multi-family offices: the establishment of investment funds within a flexible but well-regulated framework. Rolle observes: “For example, under DARE, there are opportunities for digital token exchanges and service provider business using digital assets. Related to this, certain financial services specific to digital assets were incorporated in the Financial and Corporate Services Providers Act, 2020, including digital wallet services, and custody of digital assets business. DARE also provides a streamlined path for existing registrants to add digital assets business lines to the activities they are licenced or registered to perform.”

CHRISTEL SANDS-FEASTE Partner, Higgs & Johnson



Illing highlights the role digital tools can play stating: “The trend for mobile trading on the go reached new heights during the Covid crisis. As long as there are low interest rates worldwide and savings accounts don’t generate any income, the international investor will venture into equities and commodities trading.” Very tangibly, with respect to the digital assets space, the SCB must ensure it keeps abreast of the industry and regulatory trends. “We must make sure we stay on top of investor needs for appropriate regulatory protection,” Rolle stresses. The SCB is engaged in International Organization of Securities Commissions (IOSCO) work streams in these areas to help stay on top of regulatory trends. Further, we have dedicated resources to keep track of FATF initiatives with respect to anti-money laundering/combating the financing of terrorism/Financing of Proliferation of Weapons of Mass Destruction (AML/CFT/PF) and relevant OECD initiatives. “In keeping with the ethos of the SCB, we are also committed to meaningful engagement with our stakeholders to understand how regulation, or the lack of it,


Executive Director, Securities Commission of the Bahamas (SCB)


is affecting their operations,” she continues. In addition, in October 2020, the Central Bank of The Bahamas launched the Sand Dollar – the world’s first officially issued and central bank-backed digital currency. In Illing’s view: “The introduction of the Bahamian Sand Dollar will have a positive effect on our trading industry. It will prove that with some sensitive regulation and oversight, digital currencies can be a safe and inexpensive way of transferring funds between different entities. The trend towards digital and cryptocurrency will continue and will benefit the client that trades on the international markets.”


Partner, McKinney, Bancroft & Hughes

THE COVID-19 YEARS Amid the regulatory changes being ushered in by the Bahamian authorities, the repercussions of the Covid-19 pandemic continue to be felt by society, the financial services industry and the global economy at large. “Unsurprisingly, the pandemic has dictated industry trends over the past year,” comments Moree. “Specifically, we saw clients focusing more on corporate governance procedures. This included confirming that meetings of directors and shareholders could be held properly virtually, and determining where the central management and control of the entity was being exercised.” This last matter was particularly relevant given that many decisions were being made in virtual meetings, with participants in various jurisdictions across the globe. “The global pandemic made it necessary to provide a flexible work environment and be able to work from everywhere,” Illing says. “Thanks to available bandwidth and technology advances, employees were able to start working remotely without service interruption. And

our clients worldwide enjoyed uninterrupted trading possibilities, either from their mobile devices, or on their home computer.” Rolle emphasises the resilience that the securities, investment funds and capital markets business have shown throughout the Covid-19 pandemic years. “These industries have held strong and maintained positions, or showed some growth. This helped offset some of the economic losses the country suffered since the start of the pandemic. It also highlighted the role the industry plays in the diversification of our national economy.” When contemplating where to do business, certainly the suite of product and service offerings, overall governance and regulatory environment are factors that must be considered. The Bahamas has a well-established track record in financial services. Over the years, the jurisdiction has adapted to ensure that that it continues to meet evolving client needs, whilst adhering to international standards of best practice and regulation. It remains a compelling jurisdiction for financial services in general, but more so today for fintech and digital financial services.


OVER VIEW Founded in 2001 as a pioneer in online trading we have become an award-winning global organisation. Initially specialising in Forex we gradually expanded the range of products and currently our customers can choose from over 1000 CFD or Spread Betting instruments across Forex, Indices, Shares, Commodities, Financials and ETFs. Headquartered in the heart of London together with offices in Milan, Nassau, Sofia and Luxembourg, we deliver exceptional trading conditions and outstanding support to our loyal customers in more than 140 countries. We offer the world’s most popular trading platform: MetaTrader, enhanced with Smart Tools developed exclusively for our customers as well as our own ActivTrader – an intuitive and fully-featured platform designed for all levels of trading experience and available on desktop, smartphone and tablet. Contact: Chris Illing, E:

The Bahamas Financial Services Board (BFSB) is a multidisciplinary body that embraces active contribution from individuals within government, banking, trust and investment advisory services, insurance and investment fund administration as well as interested legal, accounting and management professionals. BFSB represents and promotes the development of all sectors of the industry, including: banking, private banking and trust services, mutual funds, capital markets, investment advisory services, accounting and legal services, insurance, and corporate and shipping registry. In addition to its coordinated programs to increase confidence and expand knowledge of The Bahamas among international businesses and investors, the private sector-led BFSB will continue to consult with government to develop new initiatives to meet the rapidly changing demands of international financial markets. Contact: Tanya McCartney, E: Higgs & Johnson is a full-service corporate and commercial law firm in The Bahamas with over 70 years of experience. The Firm offers a variety of legal services through its practice groups that include Litigation, Financial Services, Insurance Law & Regulation, Real Estate & Development, Securities & Investment Funds, Private Client & Wealth Management, Commercial Transactions, Maritime & Aviation, Insolvency & Corporate Restructuring, Intellectual Property, Tax, and Government & Regulatory Affairs. The Firm provides superior legal, corporate and fiduciary services to global law and accountancy firms, financial institutions, trust companies, multi-million dollar touristic and A-list residential developments, multinational companies and high net worth individuals. Higgs & Johnson serves clients across multiple industries including banking, hospitality, financial services, mining, oil and gas, media, petroleum, insurance, transportation and advisory & wealth management. Contact: Antonia Burrows, T: 242 502 5200 McKinney, Bancroft & Hughes is one of the largest and oldest firms in The Bahamas and conducts an extensive international and domestic practice from its offices in the cities of Nassau and Freeport. Established in 1945, the firm has a team of over thirty attorneys with a support staff of more than one hundred. Contact: Kevin Moree, E: The Securities Commission of The Bahamas (SCB) is committed to the growth and development of a vibrant, competitive financial services sector in The Bahamas. Established in 1995, the SCB is responsible for the oversight, supervision and regulation of investment funds, securities, the capital markets, financial and corporate service providers, and licensees under the Digital Assets and Registered Exchanges Act, 2020. contact: Stewart Miller, T: +1 (242) 397-4100 E: /



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