49/02
23 May 2002
FURTHER PROGRESS ON FINANCIAL REGULATION IN THE CARIBBEAN OVERSEAS TERRITORIES AND BERMUDA
UK Treasury and Foreign Office Ministers today welcomed further improved financial regulation by the Caribbean Overseas Territories and Bermuda.
The six Overseas Territories concerned today published reports setting out the steps they have taken to implement the recommendations made in the KPMG review of their systems for regulating financial institutions. This is the second series of detailed reports by the Overseas Territories on implementation, following their endorsement of the main elements and recommendations of the KPMG report.
In a joint statement Ruth Kelly M.P, Economic Secretary to the Treasury, and Baroness Amos, Foreign Office Minister for the Overseas Territories, said:
“Better financial regulation is important in ensuring that Britain’s Overseas Territories maintain their status as important financial centres. We congratulate them on the progress they are continuing to make in implementing the recommendations in the KPMG report to improve standards of financial regulation. Naturally in the 18 months since publication of the KPMG report, the Territories have concentrated upon the three priority areas agreed with the UK government. Progress on all of them has been impressive:
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All of the Territories have adopted comprehensive anti money laundering legislation.
- Independent Regulatory Authorities are up and running in Bermuda, British Virgin Islands, Montserrat and Turks and Caicos Islands; while Anguilla and Cayman Islands are planning to legislate in the first half of this year.
- All the Overseas Territories, apart from Anguilla, have taken the necessary compulsory powers to obtain information about regulatory issues and share it with foreign regulators. Anguilla will be including such powers in the legislation to establish the independent regulatory authority. Bermuda will be taking powers to compel unregulated persons and bodies to provide such information to the authorities on the same basis as regulated financial institutions.
“This is very good progress. In one or two cases a few issues remain to be worked out concerning exactly how the Independent Regulatory Authority will operate and be financed in practice. For example, it needs to be clear that the regulatory authorities should have the power to levy fees to cover not just forecast expenditure for the year ahead but also to build prudent reserves to deal with any contingencies that may arise in-year. Operating guidelines will be needed in order to make clear that the boards of the authorities will deal with overall policy and strategy, with individual licensing decisions left to professional regulators operating within guidelines approved by the board.
“We are also glad to see that the Overseas Territories have turned their attention to other recommendations in the Report. For example we welcome the new Trust Act recently adopted in Bermuda. We note that all the Territories have set out ambitious plans to pass further legislation and adopt further regulation and we urge them to enact such measures speedily. As well as legislative measures it will be necessary to provide the necessary human as well as financial resources to the new institutions so they can operate effectively.
“The visits by the IMF in the last quarter of 2002 as part of the IMF financial sector assessment programme will provide an independent assessment of the OTs’ progress towards achieving international standards of financial regulation. As preparation for these visits we welcome the plans of the Overseas Territories to complete the necessary outstanding legislation and to ensure that it is implemented. The UK government looks forward to continued co-operation with the Overseas Territories in adopting financial regulation to comply with international standards and meet best practice.”
Notes to Editors
1. In 1999, the UK, the Caribbean Overseas Territories (Anguilla, British Virgin Islands, Cayman Islands, Montserrat and the Turks and Caicos Islands), and Bermuda jointly commissioned an independent in-depth review by KPMG into the Overseas Territories’ compliance with international standards and best practice of financial regulation, including in the field of anti-money laundering.
2. The review was published on 27 October 2000, when the Overseas Territories also made a commitment to implement three priority measures by the end of September 2001. These were the establishment of independent regulatory authorities; the introduction of investigative powers to follow up enquiries by overseas regulators; and the establishment of comprehensive anti-money laundering frameworks. In addition the Overseas Territories published their responses to the KPMG report in February 2001 explaining how they planned to respond to KPMG’s other recommendations. A joint FCO/HM Treasury press release of 3 December 2001 gave a further progress report (available on the FCO site).
3. Further details of the KPMG review and of the commitments made by the Overseas Territories to implement KPMG’s recommendations are set out in a Treasury Press Notice of 27 October 2000. Further details of the Overseas Territories’ responses to the KPMG review are set out in Treasury Press Notice of 8 February 2001.
4. Press enquiries should be address to Simon Moyse, HM Treasury Press Notice on 020 7270 4420 or Peter Connolly, News Department FCO on 020 7270 3909.
The progress report is available below in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website.
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