CIBC FirstCaribbean International Bank has been given the green light to exit the asset management business in Barbados and transfer those assets to Sagicor Asset Management Inc. and Sagicor Life Inc.
Just over a year after CIBC FirstCaribbean and Sagicor made the application, the Fair Trading Commission (FTC) announced that it has been approved.
“Following its identification of the relevant product markets in Barbados, the Commission executed a comprehensive competitive analysis which considered the potential impacts of the transaction. Consideration was also given to the number and relative size of the firms in the market and the effect of barriers on new firms seeking to enter each market,” said the FTC.
The regulator said subsequent to the analysis and pursuant to Section 20(5) of the Fair Competition Act, CAP. 326C, it determined that the asset transfer would not lessen competition in the market for investment income and retirement savings managed by an investment management institution in Barbados.
“The Commission is of the view that the proposed transaction is unlikely to cause anti-competitive effects because economic outcomes determine what happens in the relevant markets. The Commission also finds that anti-competitive effects are unlikely to result from the proposed transaction,” said the FTC in its ruling.
In April last year CIBC FirstCaribbean International Bank filed an application with the FTC to transfer its clients’ books and records related to investment accounts and Registered Retirement Savings Plans (RRSP) to Sagicor Asset Management Inc. and Sagicor Life Inc.
The transaction will see all books and records related to clients’ investment accounts managed by CIBC FirstCaribbean being transferred to Sagicor Asset Management. These accounts are corporate and personal funds invested primarily in mutual funds and government securities.
The transaction will also see the transfer to Sagicor Life Inc. of all books and records related to clients’ Registered Retirement Savings Plans (RRSP) that are wholly managed by CIBC FirstCaribbean.
The transfer from CIBC FirstCaribbean to Sagicor will result in the accumulation of assets under management totalling BDS$1.4 billion.
“Having considered the application made by Sagicor Asset Management Inc. and Sagicor Life Inc., and FirstCaribbean International Bank (Barbados) Limited for approval to transfer the assets managed by FirstCaribbean International Bank (Barbados) Limited to Sagicor Asset Management Inc. and Sagicor Life Inc., the Commission, pursuant to Section 20 of the Fair Competition Act, CAP.326C of the Laws of Barbados determines that the transaction is permitted without conditions attached,” the FTC explained.
This approval comes seven months after some policyholders complained that the notice informing them of the transfer gave too little time for them to make any informed decision.
In the October 1, 2021 letter notifying policyholders, CIBC FirstCaribbean said the decision to exit the asset management business in Barbados was not made lightly.
The financial institution went on to inform policyholders of their options, which included withdrawal of the contributions, agreeing to the transfer to Sagicor, or transferring the funds in the account to a RRSP with another service provider of their choice.