The use of innovative ideas and methods has assisted in keeping the country’s financial services sector relevant in the ever-changing world economy. This according to Attorney General and Minister of Legal Affairs, Senator the Hon. Ryan Pinder while addressing the Association of International Banks & Trust Companies, Nassau Conference at Baha Mar Convention Centre, September 18, 2024.
Held under the theme, ‘A Masterclass in Growth & Innovation,’ the Senator was asked to speak on the topic, ‘Future Proofing the Financial Services Industry.’
“This is an important topic today, as we continue to see the international regulatory environment and the nature of the financial services industry change because of domestic reforms occurring country by country, and impositions of multilateral organizations,” said the Attorney-General.
“We have built this industry, sustaining our viability over the last few decades as an international financial centre by our ability to be nimble and adapt to changing circumstances and by being innovative. Today these key features of our existence remain the same, and the markets around the world continue to experience turbulence which as we know provides opportunity.”
He said that the sector’s success has been marked by the ability to identify disruptions and changes in the marketplace, quickly react to that, and innovate with new products, and then aggressively pursue the market and clients from that market.
This formula, he said, is the method used to future proof the financial services industry. An example, he cited, has been the pursuit of the Brazilian market.
“As a country we have worked hard over the years to develop the financial services market in Brazil,” he said. “When I was the Minister of Financial Services, we perfected the SmartFund 007 to capture certain onshore / offshore structuring opportunities that created tax deferral opportunities. This was an excellent innovative product created in partnership between industry and government. We identified the opportunity, agreed a strategy and a differentiating position. We marketed the product aggressively in Brazil, and saw our fund industry grow, reaching record numbers of funds licensed in The Bahamas, and many of the assets of those funds custodied in The Bahamas as well.”
“With an aggressive strategy developed by Government and industry we created a new form of entity to license as a fund, the Investment Condominium, or ICON. The ICON was developed jointly between The Bahamas Government, the Bahamian financial services industry and the Brazilian legal community. The ICON created another influx of licensed funds originating from Brazil, providing a product that was structurally familiar to the investment condominium in Brazil,” said Mr. Pinder.
Consequently, he said that a ‘material’ amount of funds licensed in The Bahamas originated from Brazil.
He noted that new markets must also be identified, which will allow the sector to continue in its goal of innovating. One such market is the United Kingdom.
“We know that their former administration, and echoed by their current administration, has the desire to significantly reform the resident non-domiciliary regime of the UK,” he said. “This will have material effect on thousands of ultra-high net worth residents of the UK. They will be looking at their resident status, their wealth structures and evaluating what changes are going to be required. We all should pay attention to the budget that will be presented at the end of October in the UK and understand the changes and reforms it will contain.”
He said that permanent resident laws have recently been reformed, allowing for permanent residence with the purchase of a 10 years zero coupon $1 million bond from the Central Bank, giving more flexibility for those looking to establish residency in The Bahamas.
“We must determine what other product reforms may be needed, and how we can leverage our current toolbox. Like we did before, solutions and products must be developed jointly between The Bahamas Government, the Bahamian financial services industry and the London legal community. We as a country, and particularly the industry must invest in travelling to London, meeting with practitioners and working to attract that business to The Bahamas.”
He said that there are other jurisdictions that are undergoing significant domestic reforms, where the status quo is being disrupted, therefore, efforts must be taken to identify these jurisdictions, opportunities for The Bahamas, and aggressively work to create solutions for potential new clients.
“We as a country and as an industry would search for opportunities for industry growth and expansion, and commit to going to jurisdictions to see how we can innovate. This was evident in Brazil, Mexico, and other what would be termed new potential jurisdictions. Some worked out some did not, but I remember when we decided to go, the industry went with a substantial presence and collectively worked on potential products and opportunities. Industry must get out on the road, travel and help identify opportunities in new jurisdictions.”
By: BETTY VEDRINE/Bahamas Information Services
The post Innovative Ideas Continue to Fuel the Financial Services Sector appeared first on ZNS BAHAMAS.
