KINGSTON, Jamaica, CMC – The Bank of Jamaica (BOJ) says it is preparing its operational systems and personnel to transition to the “Twin-Peaks” regulatory framework effectively.
Under this framework, once it is implemented within the stated 18-24 months transition period, BOJ will have responsibility for the micro-prudential supervision of not only Deposit-Taking Institutions (DTIs) – commercial banks, building societies, merchant banks, and credit unions but also Non-Bank Financial Institutions (NBFIs) – securities dealers, insurance companies and pension funds.
The central bank said that this intended change in the country’s financial regulatory landscape was outlined in the Jamaica government’s policy statement on Monday by the Minister of Finance and the Public Service, Dr. Nigel Clarke.
Clarke had said the government is moving to review several pieces of financial sector legislation to apply more stringent penalties for breaches, adding that the review is necessary to strengthen the country’s ability to identify, investigate and prosecute financial crimes in the banking, securities, insurance, and pensions sectors.
The legislation to be amended includes the Securities Act, Banking Act, Insurance Act, and Pensions Act.
Clarke’s announcement came as the authorities announced that the United States Federal Bureau of Investigation (FBI) would assist local authorities in investigating the alleged multi-million dollar fraud at an investment firm, Stocks and Securities Limited (SSL).
Prime Minister Andrew Holness has said no effort would be spared in uncovering the full extent of the fraud at the SSL, whose clients included eight-time Olympic champion Usain Bolt.
The legendary world-class sprinter is alleged to have been fleeced of millions of dollars in local and foreign currencies given to the firm to invest.
Bolt has indicated through his lawyer that he had a balance of US$12.7 million at SSL as of October 31, 2022, but that figure declined to US$12,000 on January 11.
The BOJ said it “is equipped with the personnel, technology, and the supervisory systems at globally accepted and recognized standards to undertake its existing macroprudential supervisory activities.
“The central bank is committed to strengthening its systems, upgrading the competencies of BOJ staff, as well as collaborating to synergize the appropriate technical skills at the Financial Services Commission (FSC) to fulfill the central bank’s additional responsibilities for the fair, transparent, open and diligent regulation and supervision of all financial institutions to global standards as prescribed by law and government policy.”
The BOJ said that its team would be working closely with the management and staff of the FSC to give effect to the transition that will include the transfer of responsibility for the market conduct of DTIs to the FSC, which will also have added to its remit, financial consumer protection, in addition to retaining market conduct oversight for NBFIs.
“The two entities will also cooperate in undertaking the necessary assessment of the required amendments to the legislative, policy, and institutional frameworks to effect the new government policy.”
BOJ Governor Richard Byles, who has been appointed FSC chairman, says the new FSC board will be relying on the continued dedication and professionalism of the Commission’s management and staff in charting the FSC’s future direction and implementing the tangible steps towards achieving the stated objectives of the government.
Byles and FSC executive director-designate, Major Keron Burrell, who is being seconded from BOJ, met with FSC management and staff on Thursday to thank the FSC team members for their invaluable public service and to encourage them to continue giving their best in the current period of transition and beyond.
“Bank of Jamaica and the FSC will be consulting with the requisite stakeholders in the public and private sectors to ensure the seamless and effective implementation of the responsibilities of the organizations.
“As Bank of Jamaica embarks on the processes required for the consolidation of prudential regulatory supervision of DTIs and NBFIs, BOJ will provide updates to the Minister of Finance and the Public Service and other stakeholders, including the people of Jamaica and local and global investors,” the BOJ said in its statement.