Half of Managed Banks in The Bahamas to Establish Operations

More than half of the 124 registered managed banks in The Bahamas are expected to remain in the country and comply with the a broad-ranging legislative package that was passed by the Bahamas Government at the end of last year.

The remaining registered managed banks – banks which are incorporated here, but which have no office, employees or records in The Bahamas – are expected to cease operations by September 30.

In complying with new laws these banks will, among other conditions:

-establish a physical presence in The Bahamas;

-retain at least one resident professional at a director level;

-have committed management resources to ensure the institution operates in accordance with Bahamian legislation; and

-maintain all records in The Bahamas.

The package of 11 new and amended laws has strengthened the country’s regulatory and supervisory regime and makes The Bahamas FATF compliant. The industry here has embraced all of the principles of FATF’s recommendations and has thrown its support behind the new legislative environment.

While the new legislative package is expected to eliminate “fringe” elements from the most highly-developed international financial centre in the region, Bahamian Government policy targeting managed banks had been in the works prior to the various supranational initiatives that have emerged during the past year.

“We are encouraged by developments with managed banks; this development speaks to the reputation of the businesses doing business in the Bahamas and to the Bahamas itself,” said Wendy Warren, BFSB’s Executive Director. “By establishing a physical presence in The Bahamas, they will strengthen and make our financial services industry even more competitive both internationally and domestically.”

Long-established as one of the foremost international financial centers and a key operational base for many of world’s most recognized and respected banking and financial organizations, The Bahamas has preserved its crucial tax neutrality advantage in the new financial architecture that has emerged in the country.

(Note: See April Edition of the BFSB Newsletter for a report on the financial services industry’s enhanced regulatory regime)