Barbados Regulation Examination flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Financial Services Commission

Barbados's integrated regulator for securities, insurance, pensions and credit unions, created by the Financial Services Commission Act, 2010, with powers to license, supervise, investigate and sanction.

Central Bank of Barbados

Statutory authority that licenses and supervises banks and trust companies, administers monetary policy, and may assume control of institutions whose solvency or compliance fails.

Financial Intelligence Unit

Barbados's national centre for receiving, analysing and disseminating suspicious transaction reports and for coordinating anti-money laundering and terrorist financing policy.

Prospectus requirement

A public offer of securities must be accompanied by a prospectus registered with the Financial Services Commission unless a statutory exemption, such as a restricted private placement, applies.

Continuous disclosure

Obligation on listed issuers to publish audited annual and interim financial statements on time and to disclose material price-sensitive information promptly to the market.

Insider dealing

Trading or tipping on material non-public information in relation to securities; prohibited under the Securities Act and subject to both civil and criminal consequences.

Broker-dealer licence

Authorisation granted by the Financial Services Commission permitting a firm to deal in securities for clients and itself, subject to capital, fitness and record-keeping conditions.

Collective investment scheme

Arrangement pooling investor money for collective management; must be registered or recognised, with separately approved operator and custodian and segregated scheme property.

Customer due diligence

Process of identifying the customer and beneficial owner, verifying identity from reliable independent sources, and understanding the purpose of the proposed relationship.

Suspicious transaction report

Confidential report filed with the Financial Intelligence Unit when a firm suspects proceeds of crime or terrorist financing; tipping off the customer is prohibited.

Politically exposed person

Individual entrusted with prominent public functions, or a close associate or family member, requiring enhanced due diligence and senior management approval before establishing a relationship.

Record-keeping period

Financial institutions must retain customer identification and transaction records for at least five years after the relationship ends or the transaction occurs, available to regulators.

Targeted financial sanctions

Freezing without delay of funds of persons designated by relevant sanctions lists; strict liability applies to dealing with designated persons or their assets.

Capital adequacy ratio

Regulatory capital expressed as a percentage of risk-weighted assets; must meet the minimum set by the Central Bank, with higher requirements for riskier exposures.

Large exposure limit

Cap on credit to a single borrower or connected group relative to the bank's capital, preventing concentration risk; breaches require reporting and remediation.

Deposit insurance

Protection administered by the Barbados Deposit Insurance Corporation, reimbursing eligible depositors up to a statutory maximum if a member institution fails.

Change of control approval

Acquisition of a significant shareholding in a licensed financial institution requires prior regulatory approval; completing the change without approval is void or sanctionable.

Margin of solvency

Insurance test requiring prescribed assets to exceed liabilities by a statutory margin; failure triggers supervisory intervention, remediation directions or restriction of new business.

Policyholder funds

Life insurers must keep policyholder assets separate from shareholder funds and may not apply them to shareholder obligations; periodic actuarial valuation is required.

Insurance broker registration

Intermediaries must be registered with the Financial Services Commission, hold client money in designated accounts and disclose premiums, exclusions and commissions to clients.

Trustee duty of loyalty

Trustees must act in good faith for beneficiaries, avoid conflicts and self-dealing, and must not profit from their position unless authorised by the instrument, statute or court.

Trust company licence

Authorisation from the Financial Services Commission to carry on trust business, conditioned on minimum capital, professional indemnity cover, segregated accounts and adequate records.

Beneficial owner identification

The natural person who ultimately owns or controls a client; nominee shareholders and directors must disclose their principal to the licensee, which remains responsible.

Client money segregation

Client assets must be held in designated trust or client accounts separate from firm money, reconciled regularly and subject to independent audit.

Suitability assessment

Before recommending a product, the firm must gather information on the client's objectives, financial situation, knowledge and risk tolerance and match advice accordingly.

Conflicts of interest

Situations where the firm's or staff's interests may harm clients; they must be identified, disclosed and managed, with avoidance where management is inadequate.

Complaints handling

Documented procedure with defined timeframes for receiving, investigating and responding to client complaints, with escalation to the regulator or Ombudsman where unresolved.

Administrative penalty

Financial sanction imposed by a regulator under statute after notice and an opportunity to make representations, subject to appeal to a tribunal or the High Court.

Licence revocation

Withdrawal of authorisation, typically after notice and representations, where an institution is insolvent, persistently non-compliant or no longer fit to carry on business.

Fit and proper test

Assessment of honesty, competence, financial soundness and independence of directors and senior officers; adverse findings can lead to disqualification or prohibition orders.

Memorandum of understanding

Cooperation arrangement allowing domestic and foreign regulators to share supervisory information, subject to confidentiality safeguards and legal limits on disclosure.

IOSCO multilateral arrangement

Framework under which Barbados securities regulators exchange information with foreign counterparts for enforcement and supervision of cross-border securities activity.