The Financial Services Commission (FSC), now headed by former Bank of Jamaica Deputy Governor John Robinson, is moving to ensure greater compliance and due diligence from registered companies in the Jamaican financial sector.

No longer will the Exempt Distribution Regime be as porous. 

Trust companies will have to provide substantive documentary evidence specifically naming beneficiaries and those whose benefit the trust has been established for. Securities dealers will have to be more forthcoming with information particularly as it pertains to off-balance sheet activities. 

Finance houses will no longer be allowed to submit opaque financial statements. More information will be needed on directorships and shareholders, thus exposing interconnectivity.

Read the FSC’s letter below: 

“December 17, 2021 

Dear Licensee/Issuer: 

Additional Registration Filing Requirements for Exempt Distributions (SR-GUID-20/12-0027) 

The Financial Services Commission (“FSC”) in its continued efforts to enhance its due diligence review process has developed additional administrative requirements for registrations under the Exempt Distribution Regime. 

To this end, the FSC wishes to advise that with immediate effect, the requirements to facilitate the registration of an exempt distribution offering have been expanded to include documentary evidence to support the declarations made on the Notice of Exempt Distribution which may include but not limited to the submission of the following documents to the FSC: 

1. Constitutive documentation showing evidence of company registration, directorship and shareholders, secured from the company registration office in the jurisdiction; 
2. For trust companies, the provision of documentary evidence, specifically identifying the ultimate beneficiaries, settlors, operators and for whose benefit the trust has been established. This communication should be in the form of written commination and a copy of all legal documents or instruments establishing; 
3. Latest audited, where applicable and or interim financial statements; 
4. Securities dealers may be required to provide additional information as determined by the FSC upon application in order to ascertain the applicant’s impact on its business when arranging distributions 
   • on its own behalf; 
   • for clients under its management such as Special Purpose Vehicles, Collective Investment Schemes, Private Equity Funds and such pooled arranges; and 
   • for related, connected, affiliated and/or associated companies. 

The additional information will also assist in improving the quality and clarity of the pre-registration communications, and the level of due diligence that is conducted prior to the registration of an exempt distribution offering. 

The FSC would also like to advise that with immediate effect all deficient applications will be rejected without itemising the areas of discrepancies. 

We, therefore, encourage dealers to utilise the Exempt Distribution Checklist efficiently to reduce or avoid occurrences of rejected applications.”