“An important function of the gatekeeper is letting the right people through the gate in the first place,” asserted Kenneth Baker, CEO and Managing Director of the BVI Financial Services Commission (FSC) at Tuesday’s BVI Finance Breakfast Forum.
The forum, themed: “The Gatekeepers of Financial Services,” was a special event held to commemorate the BVI Financial Services Week 2021.
Further commenting on the FSC’s role as a gatekeeper, Mr. Baker said one of the core responsibilities of the FSC is to ensure companies meet the necessary regulatory requirements to be legally registered, adding, “If at the outset, you are not fit to become a licence holder, then you will not be granted a licence. Because it’s easier to say no at the outset, rather than to withdraw an application two or three years later.”
The CEO also explained that the FSC is the sole financial services regulator; regulating all aspects of the financial services sector directly, with legislation. He said, “From a practical perspective, we receive, and assess and consider applications for financial services licences. Once licences are granted, we conduct ongoing supervision, which includes inspections. We also advise the government on financial services matters.”
He also referred to the FSC’s corporate registry as a “major component of the commission, which is its largest division, and also which generates the largest revenue.”
Mr. Baker was joined by Errol George, Director of the Financial Investigation Agency (FIA) who spoke about the role of the agency in regards to protection, specifically in the areas of anti-money laundering and counter terrorist financing (AML/CFT).
While explaining that the FIA helps to “protect the reputation of the Territory’s financial services sector,” the director separated that role into two main parts: that being financial intelligence, and supervisory.
The Financial Intelligence Unit investigates suspicious activity reports filed by banks, trust and insurance companies, and other agencies required to report under the financial services legislation. Whereas, the supervisory component, is responsible for AML/CFT supervision of designated non-financial businesses and professions and nonprofit organisations that are operating locally. These include car dealerships, jewelers, and some legal practitioners that engage in specific activities.
Mr. George said that he has seen an annual average of 300 suspicious activity reports, and noted a spike in 2018, and gradual increase over the past few years, as a result of the surge of crypto businesses.
The FIA head also outlined the process for suspicious activity reports, which begins when a person within a financial services agency flags a suspicious event or activity, and raises it to the attention to that agency’s Internal Anti-Money Laundering Officer, who then is responsible for further assessment and judgment as to whether to the activity should be reported to the FIA. From there, the FIA would conduct the necessary checks and balances.
BOSSs
The discussion segued into BOSSs, the Beneficial Ownership Secure Search System, which is a ‘data bank’ established in 2017 to store beneficial ownership information on BVI registered companies.
As the custodian of BOSSs, the Mr. George said that the FIA is the primary user of the system, as it facilitates law enforcement requests for information, a responsibility of the agency. He said that requests primarily come from UK law enforcement agencies, as it was based on an agreement between the governments of the UK and the Virgin Islands.
Discussions also covered the process for registering a BVI company, the future of legislation of cryptocurrency, and the registration and supervision of local and foreign non-profit organisations.
BVI Financial Services Week 2021, organised by BVI Finance, was recognised in the Virgin Islands from 20th to 25th November. In addition to the Breakfast Forum, the week’s activities included a 5K Run/Walk, Bingo Night, Quiz Night, and Debate.
The week was held under the theme, 'Celebrating our financial services ecosystem through effective regulation'. The aim of Financial Services Week is to help educate the wider public on the financial services industry and the contribution it makes to the BVI economy, as well as the professionals who continue to make the BVI a leading international financial centre.
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