EditorialLocal News #BTEditorial – Regulators must ensure our money is safe by Barbados Today 17/01/2023 written by Barbados Today Updated by Stefon Jordan 17/01/2023 4 min read A+A- Reset Share FacebookTwitterLinkedinWhatsappEmail 946 Reports out of Kingston, Jamaica that global sports icon Usain Bolt may have lost millions of dollars from his account with an investment firm in that country, brings sharply into focus the regulation of financial services companies, not only in Jamaica but across the region. The retired multi-Olympic gold medallist, who was said to have earned more than BDS $120 million in a single year during the height of his career, has apparently been the victim of what is alleged to be a massive fraud at the Jamaican investment firm Stocks and Securities Limited (SSL). As expected, that country’s Financial Services Commission has jumped in, ordering an immediate investigation, while SSL’s management told Jamaican media, it had called in the police, pointing an accusing finger at a former employee. Given the international brand of Bolt, the story has been picked up by media around the world, who are now following the developments very closely. This too comes after The Bahamas financial services sector was plunged into the global spotlight following the spectacular collapse of international cryptocurrency exchange firm FTX, which was registered there. It led to the arrest and extradition to the United States of America of its disgraced founder American Sam Bankman-Fried. The Securities Commission of The Bahamas, in a move to protect the country’s reputation, its own credibility as a regulator, and the funds of several investors, announced that it had “seized US $3.5 billion worth of cryptocurrency”. You Might Be Interested In Crystal Beckles-Holder, 2nd runner up in regional competition GUYANA: Body of child found after gold mine collapses Barbadians asked to help with return tickets for Haitians The move would indicate the regulators’ ability, at some level, to indeed have oversight of the new-aged currency market. The Securities Commission of The Bahamas said it had shifted the cryptocurrency into its own digital wallets “for safekeeping”. With the FTX fiasco, it seems we in Barbados may have dodged the bullet. As former chair of our Financial Services Commission (FSC) Avinash Persaud disclosed that FTX had sought permission to register the company here but was turned down by the local regulator. On his LinkedIn page, Persaud wrote a month ago: “As the Barbados FSC argued when it was unpopular to do so, the key to the effective regulation of the fintech sector is not to get bogged down by the promise of the technology and technologists, not to invent special new regimes for new tech, but to focus on the crux of all regulation, which is to eliminate conflicts of interest.” It was a most interesting revelation from the special advisor to the Prime Minister that, “Almost all of the leading crypto exchanges have approached Barbados to be their global headquarters at one time or another.” With the requests for Barbados to be their home base, also came offers “to bring billions of investments, millions of donations to local charities and thousands of jobs,” Persaud informed us. The financial sector regulator’s job is critical whether it be the FSC, or the Central Bank of Barbados, as the challenges become more complex and the consequences more severe for individual investors. In the current environment, where interest rates are at historically low levels, institutions and individuals are challenged to find safe investments with reasonable rates of return. An already investment reticent Barbadian public is still recovering from the shock of Government’s strategic default due to the high debt load the country was carrying in 2018. Citizens are now slowly rebuilding trust in Government instruments, as a result. At this time, the public’s attention remains on the regulators as our island’s largest credit union, the Barbados Public Workers Co-operative and Credit Union Limited (BPWCCULL) is facing a self-inflicted bruising which it is trying to clean up and apply prescriptive medicine. While there have been several attention-grabbing headlines and salacious social media posts, our regulators have acted maturely and decisively, ensuring there is stability and confidence in the financial sector. The FSC has admonished the BPWCCULL for its shortcomings on regulatory filing standards, imposed a stiff fine to let the credit union know they mean business, and inserted an advisor on the board and management, giving the FSC its own eyes and ears in the institution to assure all the governance rules management standards are being enforced, reflecting BPWCCULL’s status as a systemically important financial institution. The FSC and the Central Bank have been stern in their regulation and they must also be credited for coming to the defence of BPWCCULL to reject outlandish claims that one of the institution’s subsidiaries had collapse and other utterances that could have caused a run on the entity and untold harm to the entire financial system. Barbados Today Stay informed and engaged with our digital news platform. The leading online multimedia news resource in Barbados for news you can trust. 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