SSL fraud did not trigger amendment to law – Hill
Published:Saturday | November 2, 2024 | 1:50 PM
Minister of Industry, Investment and Commerce, Senator Aubyn Hill, has dismissed assertions that the Financial Services Commission (FSC) (Amendment) Act had been brought to Parliament for debate and approval because of the Stocks and Securities Limited (SSL) debacle.
The bill was passed in the Senate without amendment.
Members of the parliamentary opposition in the Upper House yesterday gave support to the amendment of the FSC law, noting that, although the bill was taken to Parliament belatedly in the wake of the alleged SSL multibillion-dollar fraud scheme, it was a critical piece of statute to protect depositors in financial institutions.
Hill, who piloted the bill in the Senate yesterday, argued that the proposed amendment to the law was circulated for discussion in 2017, adding that this was long before the SSL fraud was revealed.
“So, all the pontification about this is being done as a reaction to SSL is entirely incorrect,” he said.
In his contribution to the debate, Opposition Senator Professor Floyd Morris said he hoped the experiences from the SSL debacle would trigger further strengthening of the legislative framework to ensure that depositors’ money is protected.
The opposition senator said he was heartened by provisions in the amended law to tighten certain stipulations in the financial sector.
He outlined that sometime ago he read of a financial institution lending money to an individual without the necessary collateral and it was a significant block of funds. “From my understanding of how the financial sector works, when I read the case, it should not be,” he added.
According to Morris, the memorandum of objects and reasons of the bill indicates that the FSC would have the capacity to intervene and possibly investigate those institutions that engaged in those practices.
Morris stressed that deposit-taking institutions have a duty to handle depositors’ money with due care, arguing that “to lend a large block of funds without having the necessary collateral in place is indeed a very risky and dangerous thing to do with depositors’ money”.
TREAD CAREFULLY
Further, the opposition senator said he will be pushing for institutions such as the Integrity Commission to be further strengthened and given all the tools possible to carry out the job it is mandated to do.
Morris warned members of the legislature that they should tread carefully when it comes to the use of public resources.
He declared, “I say to the Integrity Commission, ‘no matter who the person is, they could be big, they could be small, go after them; once they take the oath of office to serve our country, they are not bigger than the Integrity Commission and its mandate’.”
The FSC amendment bill seeks to amend the parent law to enhance the regulatory powers of the commission to enable effective group-wide supervision of prescribed financial institutions and prescribed holding companies.
The bill is also aimed at undertaking the effective licensing and regulation of prescribed holding companies; and to minimise the risk of exposure to prescribed financial institutions, arising from their relationship with other companies within a prescribed financial group, as well as risks associated with money laundering and terrorism financing.