Review of Barbados Economy in 2023: growth up, unemployment up
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109 responses to “Review of Barbados Economy in 2023: growth up, unemployment up”
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Investor limits
by SHAWN CUMBERBATCH shawncumberbatch@nationnews.com
THE FINANCIAL SERVICES COMMISSION (FSC) will be limiting the amount of money Barbadians can invest in “novel” financial instruments, including those offered and sold digitally.
With financial institutions increasingly making use of such products, the FSC says “it is critical that the provision of these services is conducted in a manner that preserves and promotes the integrity of the markets and investor protection”.
The regulator of the securities market, credit unions, insurance companies and pension funds has announced that “with respect to securities, the Commission will limit the amount of investment in novel instruments that may be taken by a retail investor.
“This limit has been set for retail consumers at 20 per cent of their liquid savings,” the FSC outlined in the new consultation paper Key Principles For The Regulation Of New Financial Instruments.
The proposed restrictions on investments in new products and services such as securities, trading, exchanges and issuances in the digital space also relate to “sophisticated investors” as defined in the
Securities Act.
“Sophisticated purchasers in the securities sector are expected to have greater knowledge of and be better able to assess the risks posed by an instrument or investment opportunity,” the FSC said.
“In keeping with this expectation, sophisticated purchasers or investors with greater financial capacity to absorb risks may invest $100 000 in any single purchase or more in novel instruments consistent with the definition of sophisticated purchaser as seen in the Securities Act.”
It added that this restriction “may be relaxed over time as an instrument becomes more familiar”.
Submit comments
The Commission is inviting financial institutions to submit comments on its proposals for investments in new financial instruments by February 29.
“The Commission recognises that new offerings have in some cases supplanted or eliminated traditional intermediaries and centralised institutions to facilitate greater efficiencies and lower cost,” the regulator said.
“Though suppliers of new financial services and products may provide many benefits, there may be a need for restrictions to be imposed on persons engaged in the business of offering, trading or advising on investments.
“Internationally, regulatory authorities are examining the issues surrounding these matters and, in particular, how to address unique issues that may be associated with new products and services such as securities, trading, exchanges and issuances in the digital space,” it noted.
The FSC said its position was that “despite differences in the modalities of delivering financial services, where the underlying instrument is a security, the regulatory concerns at stake are the same”.
It explained: “The Commission will therefore treat new products that have the characteristics of an investment as if they are securities, irrespective of the form or mode of delivery.
“This approach permits the Commission to focus on the substance and nature of a product or service and ensures that all participants in the securities market are afforded similar guidance and protection.”
It said, therefore, that “the existing securities laws and guidelines are applicable to any person offering securities within the digital space [and] operators/actors within the digital space are required to adhere to the key principles”.
The FSC also said that entities providing access to novel securities opportunities “are required to ensure that the product being offered is suitable for the intended investor”.
“Prior to the opening of an account, the offeror or broker must ensure that a suitability assessment of the investor relative to the product/ service has been conducted. These assessments are a critical component of investor protection as they reduce the risk that investors will participate in investments that do not match their risk tolerance.
“Balancing the benefits offered by new innovative products and services with public protection is the central mandate of the [FSC]. The Commission is supportive of eliminating barriers to innovation, modernising regulation and assisting businesses in their compliance with the applicable law,” the FSC said.
“The Commission is committed to consulting and providing guidance on any changes to the regulatory framework and welcomes feedback and comment on this consultation paper.”
Source: Nation
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@ David
He sound like the fellow with a million dollar house and a $900,000 mortgage claiming he is a millionaire. LOL
How much of you 6 months of cover is borrowed money boss man? What is the interest cost alone on your $2.9B In cover you bragging bout? What is the debt payment in 2024 on these borrowed reserves you bragging bout? Why not mention how much debt that 2.9B has us in with debt service over the next 4 years?
I blame the press for not asking these basic questions of such persons with their lofty one sided statements.
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@John A
Fret not yourself, Governor Greenidge has advised that although interest cost exceeded forecast it remains managedable.
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Gov Greenidge also used the interesting term ‘step up’, which can mean or apply to, several things.
Often it refers to concessionary loan terms, where service charges are low in years 1-2, but kick in or step up thereafter. It might also refer to payments which have no ‘sinking fund’ and hence monies need to step up at maturity.
The GoB has several Bonds like the J Bonds and those issued in lieu of TBills in ’18 where the holders want cash, not refinanced paper at maturity. Albeit, one can borrow from one source to repay multiple others.
The recurring theme from govt is the lack of local private investment.
Also, it is one thing to ‘book revenue’ and another to collect it, as we have seen in the past with VAT.
Given all the hiding the last administration was able to do, I am just holding my breath. -
@David
How does this work?
https://barbadostoday.bb/2024/02/03/tenders-invited-for-issue-of-government-treasury-bills/ -
@ NorthernObserver on February 6, 2024 at 11:15 AM said:
“The recurring theme from govt is the lack of local private investment.
Also, it is one thing to ‘book revenue’ and another to collect it, as we have seen in the past with VAT.
Given all the hiding the last administration was able to do, I am just holding my breath.”
+++++++++++++++++++++++++++++++Very sound analysis!
The current Guv’s report is just a load of partisan political propaganda giving credence to Mark Twain’s assertion: “There are Lies, damned Lies and Statistics”.
This current Guv can foresee “Growth” generated by Private Sector Investments but- unlike previous Guvs- is unable to identify projects in the pipeline which would produce such growth.
Where are the big game-changing tourism investment like the Sandals, Beaches; or even the Hyatt Ziva which has fallen from favour and is no longer the apple of the eye of the current Administration?
Even “Enuff” (and his sidekick ghost Sales Director). must have lost confidence in its arrival!
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@NO
See attached, not a bad return for 91 days given prevailing rates, $100 purchased at discounted price of 98.38?
https://www.centralbank.org.bb/news/general-press-release/treasury-bill-issue-no-1004
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The spread between 3 & 6 month rates at last sale was shocking.
However it was the method of tender vis-a-vis rates I didn’t understand. Will it end up with multiple different rates? Normally the offer includes a term and rate. -
MTA
I will leave you to continue the Hyatt battle. Centric, Ziva, maybe they can change again, and sell the former Mrs Ram land to the Savoy folks since it has permission 😁😁
The Gov’r will always spurt the positive.
Since we don’t get a lot of ‘forward looking’ commentary, and given elsewhere they are finally realizing drops in Libor may not be meaningful in ’24, that impact will all depend on projections. Thus far the Gov’r seems confident these are flexible enough to allow for higher for longer rates (costs).
The blogmaster invites you to join the discussion.