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| Hillary Deveaux, Executive Director of the Securities Commission |
The financial services industry accounts for about one third of The Bahamas’ $6 billion economy in direct and indirect investment, making it the number two sector after tourism. Supporting about 22,000 jobs (or 13 percent of all employment), the sector depends on more than just first-rate financial services. Its success ultimately rests on its integrity, stresses the executive director of the Securities Commission of The Bahamas, Hillary Deveaux.
There is no place for ‘rogue operators’ in The Bahamas,’ says Deveaux, the top regulator of the securities industry.
Deveaux works closely with U.S authorities and officials in other countries to keep the financial sector clean and prevent efforts to subvert the system. The Bahamas, Deveaux notes, is a member of the International Organization of Securities Commissions (IOSCO), which regulates financial jurisdictions worldwide.
“What we want to do is generate business for the jurisdiction,” Deveaux explains. “We also want to comply with international regulatory practices; so we try to ensure that we are in fact complying with all IOSCO principles.”
In fact, Deveaux noted that The Bahamas has been revamping security regulations adopted in 1999 in order to be “even more in line with IOSCO principles and ensure (that the regulations) that we are in compliance with the IOSCO Memorandum of Understanding.” He added, “The new legislation is really to ensure that we are in compliance with all IOSCO principles and, secondly, to ensure that we can effectively exchange information to regulators internationally.”
Years ago “offshore banking” was popularly construed as a haven for tax cheats and money launderers. But those days are over, Deveaux noted. Allowing rogue operators into the system will “in the long run” harm the financial services sector’s ability to “create jobs,” he said. “So we try as much as we can to have a well regulated and well organized jurisdiction.”
According to Deveaux, the best way to keep the system upright is to keep ‘bad apples’ from getting into it. Unfortunately, it’s very difficult to immediately catch lawbreakers “if they decide to go on the other side of the law. We only realize that after it happens,” he said.
“I think, to a great extent, we impose a lot more on ourselves than other jurisdictions,” Deveaux added. “For example, when you look at the area of investment funds, we don’t have a registration process. We have a licensing process, where we do all the due diligence with the parties associated with the fund.
“We do the due diligence on the promoter, investment manager, investment advisor, the auditing firm, the legal firm. We do all of those things. And, ultimately, if the person has been found wanting in some area, then we basically don’t accept the application, and we tell them that this person has to be replaced with someone of more repute, which I think is contrary to what’s going on internationally,” he said.
Having stricter regulations of this sort may put The Bahamas at a disadvantage in comparison to more loosely run competitors. “However, we felt it was probably the right thing to do,” he said.
Like many Bahamians, Deveaux has close ties to the U.S. and pleasant memories of his visits there. He fondly recalls his days as a student at Iowa State University, where he was a teaching assistant and lecturer in economics. He went on to obtain degrees from the London School of Economics and Cambridge University. He has taught at the College of the Bahamas and University of Wales Institute of Science and Technology in Cardiff, Wales.
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