Regulating The Providers Of Corporate And Trust Services

The Corporate And Trust Service Providers Act seeks to regulate the providers of corporate and trust services, includes procedures to ensure due diligence requirements are complied with and enables the protection of the interests of specified entities. Its administration is under the purview of the Director of International Business( the Director), who is empowered to monitor […]

By Arlene Ross

November 12, 2015

The Corporate And Trust Service Providers Act seeks to regulate the providers of corporate and trust services, includes procedures to ensure due diligence requirements are complied with and enables the protection of the interests of specified entities.

Its administration is under the purview of the Director of International Business( the Director), who is empowered to monitor and examine the businesses of corporate and trust service providers, investigate complaints made against them and take appropriate action in respect of such complaints.

Licensing

To obtain a licence, the service provider must upon an application to the Director, have the financial standing necessary to carry on the service, prove to be a fit and proper person to provide the service, have a representative who is resident in Barbados and pay the requisite fees.

In determining the suitability of the applicant to provide corporate and trust services, the Director is required to have regard to educational and professional qualifications, membership in any professional association or relevant body, the applicant’s knowledge of the legal and other professional responsibilities assumed, the procedures likely to be employed, potential risks to the interest of clients along with the conduct of the applicant in relation to financial or legal matters. Providing corporate and trust services without the prescribed licence is an offence, liable on summary conviction to huge fines including imprisonment.

Where the applicant is a firm, society or company, the Director needs to be further satisfied that the controlling partners, managers, members, directors and officers are fit and proper persons to hold their respective position.

Although the aforementioned factors are enumerated under the Act, the Director has the wide ambit to request any additional information to aid in his decision and can refuse to issue a licence in the public interest. Moreover, a licence can be issued subject to terms and conditions and once granted can be varied, amended, suspended or revoked by the Director.

Service providers will have continuing obligations. They must

  • Notify the Director of any fundamental changes to the business, legal or other proceedings against the service provider or its key staff;
  • Notify the Director providing a brief summary of any criminal proceedings instituted against a client or termination of a client relationship;
  • Ensure provisions such as an insurance policy exist to cover potential losses from business disruption;
  • Ensure agreements and procedures relating to
    • service fees;
    • identification and designation of client assets; and
    • avoidance and notification of conflicts of interest exist
  • Provide annual reports declaring gross revenue and assets and keep records establishing the financial position of the service provider and their compliance with money laundering legislation
  • Promptly and thoroughly record and investigate complaints noting the action taken in respect to those complaints.

The deadline for registration under this Act is November 27th, Those seeking last minute pointers are well advised to attend 2-day conference “Thriving in a Complex Regulatory Environment” as Ms Ross is speaking on the morning of the 25th

Arlene Ross

Arlene N. L Ross is Vice President, Trust and Corporate Service with DGM Financial Group. She is an Attorney-at-Law called to the Bar in Trinidad and Tobago, Anguilla and Nevis. Arlene holds a Bachelor’s Degree in English and a Bachelor of Law Degree from the University of the West Indies. She obtained her Legal Education Certificate from the Hugh Wooding Law School and holds the STEP designation of TEP. Before joining the DGM Financial Group Arlene was the Primary Relationship Manager, Trust Services with RBC (Barbados) Wealth Management.