Financial Services Sector poised for growth

Chief Minister Dr. the Honourable D. Orlando Smith led a delegation to London October 27-29 on a mission to educate the London financial community about the BVI Financial Services' product and to increase contact between the London and BVI financial community.

He was accompanied by Deputy Chief Minister and Minister of Finance Hon. Ronnie W. Skelton, Managing Director of the Financial Services Commission Mr. Robert Mathavious, Executive Director of the International Finance Centre Mrs. Lorna Smith and a dozen senior managers from BVI-based financial services companies.

"This was of critical importance to the international business community, given the increased weight ascribed to compliance with regulations by governments, investors and the international financial community," Hon. Skelton reported in the November 6th sitting of the Legislative Council. As part of the seminar, Mr. Chris McKenzie of Harney's and Mr. Jeremy Arnold of Withers of London outlined the details and implications of recent changes to the Trust legislation.

Mr. Peter Totty, a senior UK based consultant, outlined the details of the Insolvency Act 2003.

Mr. Peter Cohen of Trident Trust spoke of the changes to the bearer share regime, in particular the 7-year transition period the FSC is recommending. Mr. Rolf Phillips of FirstCaribbean Bank spoke on behalf of the BVI Banking Association and gave a snapshot of the banking environment in the BVI who are the main players, what are the prospects for growth and how the BVI banking system is both robust and flexible enough to cater for the demands of incoming business.

Mr. Martin Lane of Conyers, Dill and Pearman then explained the development of the mutual fund industry in the BVI. He pointed out that the BVI represents an outstanding and quality location for the mutual funds industry and this is demonstrated in the growth of the number of funds domiciled in the BVI from 0 in 1996 when the Mutual Funds Act was passed to over 2,200 now.

The final element of the seminar was a panel discussion on several topics. In his presentation, Mr. Robert Mathavious of the FSC spoke on the BVI's regulatory environment.

"As you are well aware, we meet at a time when international bodies, super-national organisations, policy makers, legislators, the international media, and standardssetting organisations continue to focus with laser-like intensity on the activities of financial centres everywhere," he stated. He said organized crime and lapses in corporate governance also raise regulatory concerns and this requires constant vigilance, regular updating of regulatory standards and generally staying ahead of the curve and controlling the process of regulation rather than have it forced on us by the international community.

"At the FSC, our ethos is to promote a high standard of corporate behaviour for the protection of the clients as well as for the reputation of the BVI," Mr. Mathavious reiterated. "We work hard at creating a genuine partnership of mutual trust between the private sector and the government so as to ensure the right environment for legitimate business. We also demand high standards of integrity and sound financial management of ourselves and from all our licensees."

According to Mr. Mathavious, our regulatory norms are fashioned on three independent principles: self-regulation, market discipline and official oversight. He told delegates at the seminar that although independent, the FSC is not a law unto itself and accountability and impartiality are crucial to its success and the FCS's prudent and balanced approach continues to make the BVI a good location for international business. "If we came away with one impression, Madam Speaker, it was that there is a great appetite for BVI financial services products in London," the Finance Minister reported in LegCo last week. He said investors around the world are looking for more efficient and effective ways of managing their assets, as the world's financial and investment solutions become ever more multi-national and commoditized.

"BVI, with its flexibility, strong pool of intellectual capital and growing service sector, provides that advantage," he stated. "Couple these developments with a regulatory regime that is the envy of other offshore locations and it is clear that London holds immense potential benefits for us." While in London, the Finance Minister and the Chief Minister conducted several media interviews, the Chief Minister with the Financial Times and CNBC and the Finance Minister with The Banker magazine.

Hon. Skelton said they had three key messages: that BVI's reputation rests on its best practice regulation and that this is a regulation we do not want to lose; the BVI financial services industry has a platform for growth that will deliver benefits to all and finally that the territory has forged a strong partnership with the private sector that has served it well. Their final appointment in the UK was a luncheon meeting at BVI House with senior executives from consultancies, fund managers and trust specialists, who quizzed them on the latest legislation and speculated on how they may be able to work with BVI on behalf of their clients in the future. Similar road trips are planned for Hong Kong and New York City in 2004.