Financial Services Commission (FSC) Plans Comprehensive Legislative Revamp for Enhanced Flexibility and Regulation

A legislative revamp is on the cards for the Financial Services Commission (FSC) which regulates about 1 300 entities.

FSC chief executive officer Warrick Ward says the comprehensive changes would enable “the build out of FSC 2.0” through the introduction of “flexible legislation”.

This would enable the FSC to carry out its role via the issuance of guidelines and directives based on the legislation, but would reduce the need for future major changes of the relevant laws, Ward explained.

He gave the update yesterday at Protexxa, Harbour Industrial Park, St Michael during the media launch of Barbados Risk and Insurance Management Conference (BRIM) 2025, an annual event organised by BIBA, the Association for Global Business.

“At the commission, we’re patently aware that we must evolve and the position to meet the needs and demands of our stakeholders,” he said.

“Therefore, in 2024 at the commission we have informed of the proposed amendments to the Insurance Act which will facilitate the introduction of riskbased requirements for statutory funds, and capital insolvency.”

Research

Noting that these changes were likely to take place this year “primarily towards the domestic entities”, he explained that there was “comprehensive and purpose-driven approach to our legislative amendments and our reform agenda”.

This will take a longer time to undertake given that it will impact all FSC registrants and requires substantial consultation.

“We are looking at changing the entire suite of our legislation for all these sectors. We hope that by the end of the fiscal year, so by 2025-2026, . . . we would have done our research and made the recommendations,” he said.

“It requires central Government, Chief Parliamentary Counsel (CPC) and so on to get involved, and there is a back and forth so I would like to think that we could do it in hopefully two to three years or before.

“However, there is the hope that once that is done, we have more flexible legislation, which . . . is more principles-based so we wouldn’t have to go back to CPC all the time, or the ministry, to change legislation, we can make it enforced through the issuance of guidelines and directives,” he added.

Ward said “at the most recent count”, the Commission regulates just over 1 300 licences.

Framework

These included 1 053 insurance companies and market intermediaries, 25 credit unions, 245 occupational pension plans, 25 mutual funds and 39 securities companies. There were also “over 100 brokers, traders, investment advisors and other participants that sit on our roster”.

The CEO said the changes were to “ensure the implementation of a modern and flexible framework, which allows the commission to do exactly what we say we are going to do – create a risk-based framework”.

“The commission is focused on effectively implementing a risk based regulatory framework and supervisory methodology, and this will allow us to better address macro and micro prudential exposures that may arise, robust risk management given the size and the exposure of our economy,” he said.