Barbados’ main corporate regulator, the Financial Services Commission (FSC), is keeping a close eye on some businesses but has temporarily relaxed its rules on the filing of audited financial statements, the hosting of annual general meetings and the provision of financial statements to shareholders.
With the spread of COVID-19 disrupting the operations of local companies and financial institutions across the island, the FSC has issued communication directing to credit unions, publicly listed companies, insurance providers, pension funds and mutual fund operators.
Restrictions on the movement of people, a 24-hour national curfew and business shutdowns have affected some operations, and the FSC has told entities it regulates that they will be given some latitude in meeting regulatory requirements without facing fines and other sanctions from them.
Regulated entities whose financial year ends before September 30, 2020 will be given more time to file audited financial statements.
“A regulated entity who is unable to complete its audit and file audited financial statements for its latest financial year end as a result of being negatively impacted by COVID-19, may file said statements, within a further period of up to three months from its original filing deadline without regulatory action. In addition, fees associated with such late filings will not be applied for the relevant period,” the FSC noted.
Credit unions, over the past three years have been required by the FSC to undertake greater scrutiny of persons seeking to sit on boards by ensuring they produce police certificates of character and attest that they are not bankrupt or involved in any activity that would compromise their positions as credit union executives. The FSC has also outlawed the election of committee or executive members from the floor of annual general meetings.
However, given the current COVID-19 pandemic, the FSC has told the credit unions: “Where a credit union’s ability to convene its AGM in respect of its latest financial year end has been impacted by COVID-19, that credit union may postpone the holding of that AGM for a period of up to three months after the expiration of the initial three-month period stipulated by the Co-operatives Societies Act CAP378A without regulatory action.”
At the same time, the FSC has warned credit unions: “The commission expects that credit unions will comply with the deadline for provision of audited financial statements to members once the date for the AGM has been established. Further, the commission expects credit unions to file the audited financial statements within the requisite deadline where the AGM has been held.”
In addition, credit unions have been urged not to let up on the screening of potential candidates who want to serve on boards of directors or on committees.
“Credit unions are reminded that regardless of the actual AGM date, they are to ensure that the nomination and vetting process is carried out in a timely manner so as to not further delay convening the AGMs,” the regulator urged.
Insurance companies and publicly listed companies who are regulated by the FSC and which must give periodic updates to shareholders, have to be issued with additional instructions.
“Entities are encouraged to file unaudited financial statements or financial returns including quarterly and annual financial statements in accordance with the requisite deadlines. Entities who are unable to file the unaudited March 2020 quarterly financial statements or returns by the deadline April 30, 2020 as a result of the COVID-19 disruption, may complete their filings on or before May 30, 2020 without regulatory action.
“An entity seeking a further period of time for the filing of the March 2020 statements or returns; or an extension in respect of other unaudited financial statements or returns is required to submit an application outlining the reasons for the extension request and include supporting information.”