The House of Representatives on December 15 approved measures to designate the services provided by cambios and electronic retail payment providers as financial services under the Banking Services Act.
The designation will complement the Bank of Jamaica’s (BOJ) efforts at improving financial services offered to Jamaicans.
Minister of Finance and the Public Service Dr. Nigel Clarke, who piloted the Orders to facilitate the move, said the objective is to expand the definition of financial services to include the buying and selling of foreign currency and engaging in electronic retail payment services.
This will synchronise the definition with the activities listed in the definition of financial institutions in the international standards on combatting money laundering and financing of terrorism and proliferation.
“So, it’s harmonising our domestic legislation with the international anti-money laundering framework,” he said.
The relevant Orders are the Banking Services (Designated Financial Services) (Business of Buying and Selling Foreign Currency) Order, 2020 and the Banking Services (Designated Financial Services) (Provision of Electronic Retail Payment Services) Order.
Clarke noted that the Financial Action Task Force includes, in its definition of financial institutions, any natural or legal person who conducts, as a business, services related to trading in foreign exchange and issuing and managing means of payment, while section two of the Act defines a financial institution as a person who undertakes or engages in financial services.
The definition of financial services does not include the service of buying or selling foreign currency, or the issue of payment products for providing payment services.
“Given the objectives of the supervisory framework under the Act, which includes establishing a comprehensive regime for consolidated supervision of financial groups, including deposit-taking institutions, and given, as well, the requirements in the international standards for financial groups to be subject to appropriate anti-money laundering and countering of the financing of terrorism risk controls, expanding the definition as recommended, will address the possible consequences of these omissions,” Clarke said.
“It will also place beyond doubt, the BOJ’s ability to meet the attendant requirements of effective regulatory cooperation in relation to these services.”
In the meantime, Clarke said the Central Bank is currently engaged in a project to prepare policy proposals to strengthen the legislative and regulatory framework for the regulation of payment services, to provide the enabling environment for the delivery of such services to Jamaicans.