Fellow Anguillans,
Once the Bill becomes law, the GOA will have no further say in the resolution, this will be firmly in the hands of the ECCB, see excerpt below of the sections of the bill dealing with powers of remedial action. I hope GOA recognizes this. I say let us use what little leverage we have left to get the changes we need before going to the HOA. One size does not fit all.
75. Central Bank’s powers of remedial action
(1) If in the opinion of the Central Bank a licensed financial institution or any affiliate, director, officer, employee, or significant shareholder of the licensed financial institution:
(a) engages in unsafe or unsound practices in conducting the business of the licensed financial institution;
(b) violates any provision of this Act, Regulations or Order made under this Act to which the licensed financial institution, affiliate, or person is subject;
(c) violates any prudential standard issued by the Central Bank to which the licensed financial institution, affiliate, or person is subject;
(d) violates any condition attached to a licence issued by the Central Bank;
(e) incurs losses, it may be subject to the remedial actions specified in subsection (2).
(2) Where the Central Bank has reasonable cause to believe that the circumstances referred to in paragraphs (a) to (e) of subsection (1) are likely to occur, the Central Bank may take one or more of the following measures:
(a) issue a written warning as it considers necessary or appropriate;
(b) conclude a written agreement with the licensed financial institution or the licensed financial holding company providing for a program of remedial action;
(c) issue an order to the licensed financial institution or the licensed financial holding company or their affiliates or the person responsible for the management of the licensed financial institution or the licensed financial holding company;
(d) issue such directions as it considers necessary in relation to the persons comprising the management of the licensed financial institution or the licensed financial holding company.
(3) An agreement, order, or direction under subsection (2) may require any or all of the following:
(a) to cease and desist from the specified practice or violation;
(b) affirmative action to correct the condition resulting from the specified practice or violation; or (c) any specified remedial action.
76. Additional Central Bank remedial actions
The Central Bank may also take the following remedial actions:
(a) restrict the licensed financial institution or affiliate from further lending or taking further financial exposures, including off-balance sheet transactions, investments, or capital expenditure;
(b) require the licensed financial institution or affiliate to suspend for a specified period of time, alter, reduce, or terminate any activity that in the opinion of the Central Bank has caused material losses to the licensed financial institution or affiliate, is detrimental to the interest of depositors, or presents excessive risk to the licensed financial institution or affiliate;
(c) require the licensed financial institution or affiliate to sell, liquidate, or otherwise dispose of an affiliate or part of its business;
(d) prohibit payment of bonuses or incentive compensation to any director or officer;
(e) prohibit the licensed financial institution or affiliate from paying a dividend or making a distribution on its share capital or issue rights, shares or bonus shares to shareholders or to any person claiming under their authority;
(f) require shareholders to contribute additional capital;
(g) suspend or remove any officer of the licensed financial institution or affiliate or restrict the officer’s powers;
(h) remove any or all of the directors on the board of the licensed financial institution or affiliate or restrict their powers;
(i) restrict or vary any restriction of a licence;
(j) any other action necessary or appropriate to eliminate the basis for requiring remedial action; or
(k) revoke the licence issued to the licensed financial institution to do banking business pursuant to section 14.
77. Remedial actions against directors, officers, employees or significant shareholders
(1) In sections 77 and 78 “relevant person” means director, officer, employee or significant shareholder.
(2) The Central Bank pursuant to section 75 with respect to any relevant person of a licensed financial institution or affiliate may take the following remedial actions:
(a) require the relevant person to reimburse the licensed financial institution for losses caused by any violations;
(b) prohibit the relevant person from direct or indirect exercise of voting rights attached to shares of the licensed financial institution;
(c) suspend the relevant person from his position with the licensed financial institution or declare him to no longer be fit and proper; and
(d) prohibit the payment of capital distributions or dividends to a relevant person.
(3) If the Central Bank has reasonable cause to believe that a financial institution or its shareholders, directors, officers, employees, attorneys, accountants or other professionals have engaged or are engaging in criminal or fraudulent activities, it
shall immediately refer the matter to the authorities responsible for investigating and prosecuting the activities.
78. Additional Central Bank powers of remedial action against directors, officers, employees or significant shareholders (1) If in the opinion of the Central Bank any relevant person of a licensed financial institution or affiliate:
(a) wilfully or repeatedly has caused violation of any provision of this Act, Regulations or Order issued under this Act or prudential standard issued by the Central Bank to which the institution or person is subject following a written warning or an order from the Central Bank under section 75;
(b) has been engaging in an unsafe or unsound practice that has resulted in a material loss to the licensed financial institution or financial gain to a person; or
(c) has been conducting his affairs in a manner detrimental to the interests of the depositors, that person shall be subject to the remedial actions specified in subsection (2).
(2) In addition to the actions in section 77, the Central Bank may take one or more of the following actions:
(a) dismiss the relevant person from his position in the licensed financial institution or affiliate;
(b) prohibit the relevant person from serving in or engaging in banking business permanently or for a stated period; and
(c) require the relevant person to dispose of all or any part of his direct or indirect ownership interest in the licensed financial institution or affiliate or cease to hold a significant interest in it.
79. Supplemental powers
The powers of the Central Bank under sections 75 to 78 are in addition to any other provisions authorizing or requiring the Central Bank to take action or impose penalties under other sections of this Act.
80. Failure to comply with remedial actions
A licensed financial institution, its affiliate, or any director, officer, employee or significant shareholder of a licensed financial institution who fails to comply with any requirement or contravenes any prohibition imposed on the licensed financial institution under this Part commits an offence and is liable on summary conviction:
(a) in the case of the licensed financial institution or its affiliate, to a fine of one hundred thousand dollars, and in the case of a continuing offence, to a further penalty of ten thousand dollars for each day on which the offence is continued after conviction;
(b) in the case of any individual specified in this section, to a fine of fifty thousand dollars and in the case of a continuing offence, to a further penalty of five thousand dollars for each day on which the offence is continued after conviction.
81. Effective date of order, warning, agreement, direction Any order, warning, agreement, or direction issued by the Central Bank under subsection (2) of section 75 shall be deemed to take effect from the date specified.
82. Suspension of persons charged with criminal offence etc.
If any person referred to in sections 77 and 78 is charged with a criminal offence involving dishonesty or breach of trust and his continued service or participation in the licensed financial institution or affiliate:
(a) poses, or may pose a threat to the interests of the depositors; or
(b) threatens, or may threaten to impair public confidence in the licensed financial institution or affiliate, the Central Bank may issue an order temporarily suspending the person from his position in the licensed financial institution or affiliate and, if applicable, suspending the exercise of voting rights of shares in the licensed financial institution or affiliate by the person pending the determination of the criminal case.
83. Dismissal of criminal case not a bar to Central Bank action. A dismissal of the criminal case or decision of not guilty on the merits of the case against the person referred to in section 82 shall not preclude the Central Bank from taking any action with respect to a person authorised by this Act.
Today is serious. This is our last chance.
May God be with Anguilla
(Published without editing by The Anguillian newspaper.)
