The Bahamas Financial Services Board (BFSB) has wrapped up its latest International Business & Finance Summit (IBFS), a event targeting leading stakeholders in the sector. The 2015 IBFS was held at the Grand Lucayan resort in Grand Bahama, February 5-8.
Prime Minister the Rt. Hon. Perry Christie, M.P. addressed delegates and guests at a CEO Dinner on February 5 (see below). The following morning, the Hon. Hope Strachan, M.P., Minister of Financial Services, provided an overview of the state of play in global financial services and used the opportunity to speak about some of the programmes her Ministry is launching to continue with promotion and development of the sector. (see below). She kicked off more than thirteen different sessions around a central theme of “Creating a New Legacy”. The Hon. Fred Mitchell, M.P., Minister of Foreign Affairs & Immigration, addressed the luncheon session on February 6, outlining policies relevant to the financial services sector. He affirmed that government is keenly aware of the balance needed between enforcement of the laws and the welcoming nature that must be a part of the jurisdiction. In this context, the Minister noted the work already in progress with the financial services sector on both improving the range of products and efficient delivery of services. The Minister acknowledged that there is need for a national discussion on immigration matters, including citizenship. For the present, economic citizenship is not on the table but permanent residence on an accelerated business remains a product which we offer, he said.
CEO Aliya Allen explains that the theme chosen this year was very much in line with earlier themes of Staying Ahead of the Game and Survival of the Fitness. *“IBFS 2015 looked at how IFCs are navigating the winds of change, ever in pursuit of the level playing field, examined this jurisdiction’s building blocks for a new legacy, and reviewed how tradition can interweave with innovation for customized client solutions”*, she says. “*Without a doubt, successful centres must embrace the need to adopt successful strategies that exploit the competitive dimensions that make a difference in attracting and retaining business.”*
An interactive panel moderated by the CEO and comprising Brian Moree, Q.C., Senior Partner, McKinney, Bancroft & Hughes and David Munoz, CEO, Deltec Bank & Trust Ltd. immediately followed the introductory session with the new Minister of Financial Services on February 5. Panelists discussed **The New Legacy** from the perspective of **The Past, The Present and the Future** – with particular focus on defining the vision and the next steps on the journey ahead.
Ivan Hooper, CEO, The Winterbotham Trust Company, moderated the next session entitled **Tax & Information Exchange: The Reform Agenda – Navigating the Winds of Change**, where Mark Bridges, Partner, Farrer & Co. (UK) examined the global context of the current debates surrounding the issues of Tax and Information Exchange, and looked at this both in terms of the historical position, and how The Bahamas can be a prominent player in the future. Jean-Philippe Krafft, a Wealth Planner from Pictet Group, Geneva explained the Swiss perspective on automatic exchange of information. He outlined the challenges of this new OECD standard and how Switzerland is responding.
Michele Y. Thompson, Country Managing Partner, Ernst & Young was the moderator for the panel on **Immigration – Tool for Business & Economic Development**, which focussed on Global Citizens and the Rise of Investment Immigration Programmes. David Friedman, President, Wealth-X and Christopher Willis, IMCM, RCIC, Managing Partner, Henley & Partners Caribbean Ltd. spoke to this topic, discussing various programmes relating to residence and citizenship and evolving due diligence requirements. They were joined by John Christie, CEO, H.G. Christie Ltd. who presented slides on Redomiciling in The Bahamas – the value offerings in the second home market, particularly for HNWIs.
**Regulation & Compliance – The Culture of Compliance** was the focus of the session moderated by Industry Consultant Philip Stubbs and which featured Helen Hatton, Managing Director, Sator Regulatory Consulting and David A. Javdan, Managing Director, Alvarez & Marsal Holdings, LLC. Panellists discussed whether clients are attracted to jurisdictions with strict regulatory regimes and whether there is a clash of ideology where a client wants low regulatory standards, yet also wants his service provider to deliver best practice administration and fiduciary care. Both stressed the importance of getting the balance right. Also covered in this session was corporate governance, with an emphasis on risk management, risk review functions, and governance and structure. Noting the need for the right tone at the top, it was pointed out that never before has the linkage between strategy, risk management, and regulatory risk been greater.
Joseph A. Field, Of Counsel, Withers Bergman LLP/Withers LLP and Steven Wang, Partner-Wealth Planning Team, Duan & Duan (Hong Kong) spoke on **Succession Issues In China**, looking at it from the viewpoint of “Opportunity and Challenge”. Specifically covered was the growth in demand for succession plans for HNWIs in Mainland China, how private banks there meet such demands, and what these trends mean for offshore jurisdictions and service providers. This session also provided the opportunity for an overview of China (a region in transition) the various engines for growth, the tremendous wealth and outward investment trends – all in the context of The US and The Bahamas.
Perhaps one of the most anticipated sessions was the one on **“Promoting a Culture of Entrepreneurship within the Financial Services Industry: Challenges, Opportunities and Imperatives.”** Here, Moderator Wendy Warren, Managing Director of Caystone Solutions, led discussions by Kenwood N. Kerr, Founder, President & CEO, Providence Advisors Ltd. and K. Jonathan Rodgers (Dr), President, Transfer Solutions Providers Ltd. (TSP). They maintained that a dynamic approach to the encouragement of entrepreneurship in financial services is the key to long term stability and growth of the industry in The Bahamas. They warned against complacency in providing back office or administrative activities in The Bahamas, promoting instead the creation of a “solution-oriented” industry – considered essential for sustaining the sector going forward. In order to broaden the industry and build a solid foundation from which future generations of Bahamians can reap benefits, the Government, BFSB, and indeed industry as a whole, were encouraged to create an environment that fosters and encourages entrepreneurship in the financial services industry. Each speaker outlined personal experiences on their road to entrepreneurship.
Ronald Alsop, renowned author of “The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace” headlined the session on **Creating & Sustaining a Culture of Innovation – Millennials in the Workplace.** His presentation focused on the value added proposition of engaging millennials and steps that employers should be pursuing. It is estimated that this year millennials are set to become the largest percentage of the workforce for the first time.
Speaking on Saturday as part of the “Building Blocks” segment of IBFS, Robert McGraw, Principal, KPMG Financial Services Advisory (New York) presented on **“The Road to Sustainable Growth in Wealth Management”**. He highlighted challenges facing the wealth management sector, from the perspectives of the customer, shareholder, and regulation and compliance. Factors such as changing customer demographics, undifferentiated product and service offerings, generational and wealth shifts, digitalisation of wealth management all make it imperative to pursue new operating and service models to ensure growth.
Private Wealth Consultant Katie Louise Booth and Rose Chamberlayne, Partner, Wiggin Osborne Fullerlove took a look at **“The Continuing Evolution of the Dynamic but Sometimes Misunderstood Family Office“**. They spoke to trends post the financial crisis, future challenges, and the positioning of The Bahamas to take advantage of opportunities that have arisen from some of these challenges, given the wide range of services that these vehicles can provide.
Brian Jones, Managing Director of Deltec Fund Services addressed participants on **“The Investment Condominium (ICON) and its Place within The Bahamas’ Investment Funds Landscape”**. He specifically addressed issues such as why fund sponsors/promoters choose a particular fund domicile, and what makes The Bahamas special in this regard. The bulk of his presentation focussed on the ICON, The Bahamas’ new structuring vehicle that can be licensed as a SMART Fund, Professional Fund or Standard Fund.
Moderator Sanchez Brooks, Underwriter, Summit Insurance Co. Ltd. facilitated presentations and discussions by panelists Peter Strauss, Managing Member, The Strauss Law Firm, LLC (South Carolina) and Carlos Rodriguez, CEO of Arthur J Gallagher Colombia Re (Colombia) on **Positioning The Bahamas as a Domicile of Choice for Captives.** Both spoke to the growing reputation of this jurisdiction as a centre for captive insurance planning, and how the recognition is garnering attention from across the globe. Discussions also included an overview of the strong growth of the captive market in Latin America, with an emphasis on how this can work to the advantage of The Bahamas.
The last formal session of IBFS 2015 saw Gina M. Pereira, Founder, Dana Philanthropy speaking to **Global Philanthropy Opportunities.** She said banking and wealth management developments, global business trends, and global trends in philanthropy all have created a strong value proposition for offshore charities, arising for example from the expertise in cross border transactions and international wealth planning and fiduciary services. She encouraged BFSB to create a New Legacy for The Bahamas through philanthropy which she said would enhance the nation’s profile as a market-leading innovator, promote collaboration across sectors to develop and efficient and strategic global charitable offering, and redefine the value proposition of The Bahamas in the international wealth management industry. Risks and uncertainties that would have to be considered carefully, of course, would include money laundering, misappropriation of fund, terrorism, tax evasion schemes and, generally, reputation damage.
Prince Rahming, BFSB Chairman, points out that the financial services landscape continues to evolve. *“No matter the diversity of changing trends, they all result in transforming what clients expect. Consequently, IFCs and the service providers within them have become accustomed to “reinvention” and meeting the challenge to develop value proposition for competitive positioning. The Bahamas has been well positioned in terms of its broad toolkit of products and services but has not been immune from having to take a more holistic view of its financial and international business sector.”*
##Presentations in Focus##
**Prime Minister – Supporting the Financial Services Industry**
The Prime Minister emphasised the importance of events such as IBFS for the dialogue between industry stakeholders themselves and with Government and Regulators. He said, *“I cannot stress how important these conversations are, for both sides, and how this forum embodies the enduring Partnership which has come to characterize this industry over the course of time. Indeed, the very Bahamas Financial Services Board is a result of a harmonious public-private partnership and the Government pledges its commitment to sustaining this organization.”*
He implored all participants to think deeply, discuss passionately and work in partnership with Government to significantly grow the financial services sector and maintain a position as one of the world’s premier financial jurisdictions.
Speaking to the IBFS theme of “Creating a New Legacy”, he concurred with the approach of drawing on the lessons which have served the nation best over the years and which, indeed, have become embedded in the very nature of the sector: the power of creativity and the benefits of collaboration and efficiency to ignite change and growth of the financial services industry. He pledged the commitment of the Government of The Bahamas to provide the most fertile environment possible in which to enable financial services institutions to thrive. *“Minister Hope Strachan, the new Minister of Financial Services, will ensure that you have continued focused representation at Cabinet level as we craft a way forward for The Bahamas and for The Bahamas’ financial centre.”* The Prime Minister reaffirmed that given the Government’s commitment, it will do what is necessary to defend the centre by ensuring that *“we advocate for sensible policy and by ensuring that we navigate the world of change with skill, innovation and determination.”*
**Minister of Financial Services – Targeted Agenda**
In outlining the priorities of the Ministry, Minister Strachan spoke to Guarding Against Reputation Risk (OECD, GATCA, FATCA); Preparing our Financial Services Workers for Success (Proposed Centre for Excellence in Financial Services); Immigration for Development (responsive immigration management system which considers domestic development goals); Targeted but Aggressive Promotional Activities; and the Creation of New Markets and/or New Products.
Similarly to the remarks made by the Prime Minister at the CEO Dinner, the Minister also referenced the recently negotiated agreement in principle with the Chinese Government which will allow The Bahamas to trade in Chinese Renminbi, describing this as a serious win for the financial Services Industry. *“The details of this agreement will be worked out imminently but I implore all of you to lend your support to the government in this initiative. The possibilities are endless and I am extremely excited over the prospect of this happening under my watch.”* The Prime Minister indeed had foreshadowed a joint public private sector Working Group to chart the course for the Renminbi Trading Hub. He said this approach would ensure that The Bahamas has the infrastructure and processes in place to make it one of the most successful Renminbi hubs in the world.
*“The fluid nature of the financial services industry, it’s susceptibility to market forces, economics, and politics, dictate the need for constant diligence, and awareness; a constant search for information, constant work, new and amending legislation and the need to always be re-inventing ourselves,”* said the Minister. In this connection, she also spoke to the five “C” rules that must be applied within the industry to ensure success: Be Cognizant; Be Consultative; Be Compliant; Be Competitive; and Be Creative.