2020 saw the modernisation of key financial services legislation. The Central Bank of The Bahamas (Central Bank) sought to consolidate and modernise its primary legislation, repealing and replacing the Banks and Trust Companies Regulations Act (BTCRA). The new BTCRA, greatly enhances the ability of the Central Bank to take steps to maintain financial stability, protect depositors and enhance public confidence in the stability of the Bahamian banking system. In particular, the new BTCRA empowers the Central Bank to intervene as a statutory administrator or liquidator of a licensee in order to accomplish those aims.
Likewise, in a step to modernise the non-banking financial services sector, the Securities Commission of The Bahamas (Securities Commission) oversaw the repeal and replacement of the legislation governing financial and corporate service providers. The new legislation brought into force in December 2020 modernises the licensing regime, expands the oversight function of the Securities Commission and enhances the consumer protection regime in respect of financial and corporate services.
The Securities Commission also introduced the Digital Assets and Registered Exchanges Act, 2020 (DARE Act) in December 2020. The DARE Act regulates the issuance and sale of digital tokens, as well as the conduct of those issuing digital tokens and those providing intermediary services related to the issuance of digital tokens.
Digital tokens were a theme of 2020, as the Central Bank of The Bahamas launched a digitised version of the Bahamian Dollar, called Sand Dollar, nationwide in October 2020. Sand Dollar are backed by the Central Bank of The Bahamas and issued through authorised financial institution. Currently, Sand Dollars can only be used within The Bahamas but, as with fiat Bahamian currency, it can be exchanged for foreign currency through authorised financial institutions.
The industry experienced the first reporting deadline under each of the Commercial Entities (Substance Requirements) Act, 2018 (CESRA) and the Multinational Entities Financial Reporting Act, 2018 (MEFRA) in 2020, bringing to the fore the importance of affected Bahamian entities maintaining an economic presence in The Bahamas. The enforcement of the above referenced legislation, as well as other steps taken by the government of The Bahamas, aided in the Financial Action Task Force (FATF) de-listing The Bahamas from the list of Jurisdictions under Increased Monitoring in December 2020. In doing so, the FATF congratulated The Bahamas for the significant progress it made in improving its AML/CFT regime.
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