Financial services industry practitioners have been pressing for a “Statement of Practice” from the Securities Commission of The Bahamas on proposals relating to the physical presence requirements for registrants under the Securities Industry Act (SIA). With the new Securities Industry Act and Regulations still progressing through the consultation process, this Statement of Practice was proposed to address a perceived regulatory gap and provide guidance on the minimum requirements to satisfy physical presence standards for advisors under the existing SIA, 1999.
Effectively, in consultation with the Regulatory Authority, industry had proposed that the physical presence standards for securities investment advisors be satisfied either by the standards set out in part IV of the existing Act, or by the appointment of a ‘Managing Representative’ that administers the affairs of the registered firm, subject to the following:
* At least one executive (following established due diligence standards) of the securities investment advisor firm must be registered with the Commission: (does not have to reside in The Bahamas); and
* The fulfilment of established requirements; chief of which would be that the Managing Representative must be a Bahamian registered or incorporated company that operates in or from The Bahamas, and is licensed or registered with the Securities Commission of the Bahamas or the Central Bank of the Bahamas.
Further to the announcement in the September issue of BFSB News, BFSB is delighted that the Securities Commission now has published the [Statement of Policy](http://www.scb.gov.bs/pdf/Statement%20of%20Practice%20-%20Physical%20Presence%20Requirements%20for%20Registrants%20-%20SIA,1999-04.11.09.pdf) on its website –
and, in fact, has announced its intention to convert this to a legally enforceable Guideline in due course. See [here](http://www.scb.gov.bs/pdf/PRESS%20RELEASE%20-%20Final%20-%20Physical%20Presence%20041109.pdf) for a press release issued today by the Commission.
CEO & Executive Director Wendy Warren points out that BFSB’s aggressive representations to the SCB on this matter have been driven by requests from industry practitioners – including external advisers and private banks – who are convinced of the business opportunities that can accrue from this new policy.
On publishing the Statement, Philip Stubbs, Chairman of the Commission, said *”the Commission is of the view that this is a very positive development that will enhance business opportunities for new and existing industry participants”.* He further commented that, *“the development will be beneficial to external asset managers desirous of registering as Securities Investment Advisors through the Managing Representative option”.*
BFSB continues to be engaged with the SCB in ongoing dialogue on the importance of The Bahamas continuing to provide a regulatory regime conducive to and attractive for the conduct of competitive securities and investment fund business. CEO Wendy Warren says *“The physical presence requirement provisions as outlined above will allow external asset managers and other investment advisors to establish in The Bahamas with limited barriers to entry. We do believe that over time a number of such service providers, who may initially enter under such conditions, will opt to increase their presence in this jurisdiction in order to meet regulatory and tax considerations.”*