Deputy Premier and and Minster for Financial Services, Labour and Trade Honourable Lorna G. Smith, OBE (AL) has said the Financial Services Commission Amendment Bill 2024 will not only enhance governance and improve operational efficiency with the Financial Services Commission but also meet international obligations. Photo: YouTube

The Financial Services Commission Amendment Bill 2024, will improve the commission’s functions by introducing a risk-based approach to supervision, therefore broadening the commission’s capacity for cooperation with both foreign regulatory and non-regulatory entities, significantly enhancing the Virgin Islands’ capabilities in the fight against financial crimes. Photo: BVIFSC

Hon Smith was presenting the Bill following its second reading during the Continuation of the Nineteenth Sitting of the First Session of the Fifth House of Assembly (HoA) on Monday, September 16, 2024.

“The primary driver for these amendments is the need to comply with globally recognized FATF standards aimed at combating money laundering and terrorist financing,” she told the HoA.

Amendments will improve the commission’s functions by introducing a risk-based approach to supervision, therefore broadening the commission’s capacity for cooperation with both foreign regulatory and non-regulatory entities, significantly enhancing the Virgin Islands’ capabilities in the fight against financial crimes.

Protection of consumer rights

According to Hon Smith, the Bill introduces crucial changes in the protection of consumer rights.

“It replaces the context of consumer protection in the existing legislation with a broader concept of consumer duty as reflected in the amendment to Section 4A of the Principal Act. This new framework imposes a more proactive obligation on financial services providers to prioritise consumer interest, thereby enhancing transparency and accountability across the sector,” she explained.

Updates to penalties

The Financial Services Commission Amendment Bill 2024 also has proposed updates to penalties under the principal act which are intended to deter non-compliance and promote a higher standard of conduct within the industry.

The Bill also restructures the governance framework of the Commission where the board will now meet six times a year instead of at least ten under the current Section 7.

Employees must disclose interests

Moreover, to enhance transparency and manage conflicts of interest another amendment proposed is the disclosure of any personal, professional, business or financial interests by employees of the Commission.

“This measure aims to safeguard the integrity of the Commission’s operations,” Hon Smith stated.

Persons can be disqualified from board membership if they have been involved in the financial services industry within the preceding two years.

Donations can be accepted

Hon Smith added that the Bill also empowers the Commission to accept donations and contributions that promote financial literacy and education within the Territory.

“This provision will facilitate more structural collaborations with external stakeholders, ensuring that such contributions are used transparently and effectively,” she explained.

Under proposed changes, the Managing Director and Chairman of the Financial Services Commission will be allowed to make decisions in “exceptional circumstances” when necessary, as a means of ensuring continuity and stabilisation of the financial services sector.

“This is particularly pertinent in times of crisis where swift action is essential,” she said.