- Bank of Jamaica Act, 1960 (with amendments to 2013)
- Amendment of Bank of Jamaica Act (Tenth Schedule Banking Services Act, 2014)
- Act to amend the Bank of Jamaica Act – Act 24 of 2015
- Act to amend the Bank of Jamaica Act – Act 32 of 2017
- Bank of Jamaica (Amendment) Act – Act 12 of 2020
- Bank of Jamaica (Amendment) Act – Act 5 of 2022
- Banking Services Act, 2014
- Note: Amendments were made:-
- – Amendment of Banking Services Act (The Bank of Jamaica (Amendment) Act, 2015 section 5)
- – Banking Services Act amendment by the Bank of Jamaica (Amendment) Act, 2020 section 28 and Schedule
Note: The Building Societies Act was also amended by section 138(2) of the Banking Services Act 2014
Microfinance
Credit Reporting
Subsidiary Legislation
- The Banking Services (Financial Holding Companies) (Licensing Application Form), 2019
- The Banking Services (Deposit Taking Institutions)(Agent Banking) Regulations, Resolution, 2016
- The Banking Services (Deposit Taking Institutions) (Customer Related Matters)Code of Conduct, 2016
- The Banking Services (Deposit Taking Institutions)(Licence Application) Rules, 2015
- The Banking Services (Establishment of Branches) Regulations, 2015
- The Banking Services (Amalgamations and Transfers) (Banks and Merchant Banks), Regulations, 2015
- The Banking Services (Licence Fees) Regulations, 2015
- The Banking Services (Deposit Taking Institutions) (Capital Adequacy) Regulations, 2015
- The Banking Services (Hours of Opening) Regulations, 2015
Microfinance
- The Microcredit (Licence, Form of Application) Rules, 2021
- The Microcredit (Requirement for Grant of Licence) Regulations, 2021
- The Microcredit (Fees) Regulations, 2021
Credit Reporting
Licensees also have statutory responsibilities under other pieces of legislation the administration of which reside principally with other competent authorities (e.g. The Jamaica Deposit Insurance Corporation; The Financial Investigations Division; the Department of Public Prosecution):
Other Relevant Legislation
- Deposit Insurance
- Deposit Insurance Act, 1998 (amended 1999, 2011, 2014)
- Deposit Insurance Regulations, 1998
- Proceeds of Crime Act (POCA) 2007 (amended 2009, 2010, 2013)
- Proceeds of Crime (Amendment) Act 2016
- Proceeds of Crime (Amendment) Act 2019
- Proceeds of Crime (Money Laundering Prevention) Regulations 2007 (with amendments to 2013)
- Proceeds of Crime (Money Laundering Prevention) (Amendment) Regulations, 2019
- Terrorism Prevention Act, 2005 (amended 2010, 2011, 2013)
- An Act to amend the Terrorism Prevention Act (Act 13 of 2019)
- Terrorism Prevention (Reporting Entities) Regulations, 2010
- The Terrorism Prevention (Reporting Entities) (Amendment) Regulations, 2019
- The United Nations Security Council Resolution Implementation Act, 2013 (amended 2019)
- The United Nations Security Council Resolution Implementation (Reporting Entities) Regulations, 2019
Pending Legislative Changes
The Cooperative Societies (Amendment) Bill
This amendment to the Co-operative Societies Act will, among other things, bring credit union cooperative societies under the regulatory ambit of the Minister of Finance and the Public Service and Bank of Jamaica. Accordingly, this Bill includes provisions that will restrict the deposit-taking activities of co-operative societies to those co-operative societies which operate as credit unions. The Bill also contains substantive enhancements to the Co-operative Societies Act which are contemplated by the Ministry of Industry, Investment and Commerce (formerly Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF)), the Ministry with portfolio responsibility for co-operative societies. It is anticipated that this Bill will be presented to Parliament jointly with the proposed Credit Unions (Special Provisions) Act, which contains the substantive prudential requirements to which credit unions will be subject once the aforesaid regulatory regime comes into effect.
Pending Amendments to Financial Legislation
This amendment to the Co-operative Societies Act will, among other things, bring credit union cooperative societies under the regulatory ambit of the Minister of Finance and the Public Service and Bank of Jamaica. Accordingly, this Bill includes provisions that will restrict the deposit-taking activities of co-operative societies to those co-operative societies which operate as credit unions.
The Bill also contains substantive enhancements to the Co-operative Societies Act which are contemplated by the Ministry of Industry, Investment and Commerce (MIIC) (formerly Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF)), the Ministry with portfolio responsibility for co-operative societies. It is anticipated that this Bill will be presented to Parliament jointly with the proposed Credit Unions (Special Provisions) Act, which contains the substantive prudential requirements to which credit unions will be subject once the aforesaid regulatory regime comes into effect.
Pending Financial Legislation
The Credit Unions (Special Provisions) Bill
A decision was taken to revise the regulatory legal framework that governs credit unions by creating a stand-alone principal statute which will replace the subsidiary legislation (as Regulations under the Bank of Jamaica Act). The requisite Cabinet Submission from the Ministry of Finance & the Public Service (MOFPS) was considered by Cabinet on 01 May 2017 and approved. The Bill contains the framework that was initially proposed as Regulations to bring the operations of credit unions fully under Bank of Jamaica’s prudential supervisory regime. Accordingly, the Bill will cover, among other things, licensing, capital, reserves, prohibited business, remedial and intervention processes as well as define the role of specially authorised credit unions (see Supervisory Responsibility for Deposit-Taking Institutions).
The Financial Institutions Resolution Bill
A Cabinet Submission re-affirming the earlier policy decision to establish a special resolution regime for financial institutions has been prepared. Once finalised and approved, this later Submission which includes additional framework clarifications, will inform the continued work on the development of the Bill.
Background
In October 2017, Cabinet approved drafting instructions for the preparation of legislation to establish a special resolution regime (SRR) for financial institutions.
The proposed legislation will establish an approach to resolution under which non-viable financial institutions, which are deemed systemically important, can be resolved using administrative mechanisms. The legislation will also include the provisions for the winding up of non-viable financial institutions.
The regime primarily targets those entities whose distress or disorderly failure, because of their size, complexity and systemic inter-connectedness, could cause significant disruption in the wider financial system and to general economic activity. The entity applying the administrative mechanisms under the SRR – the Resolution Authority (RA) – must be able to act quickly and decisively to secure continuity of critical financial services as well as to contain the wider systemic impact of a financial institution’s failure. To achieve these objectives, the RA will have powers to act in a manner that affects contractual and property rights and potentially the amount of any payment shareholders and creditors may receive in resolution.
In addition to administrative mechanisms, the legislation will incorporate modified insolvency rules to be applied to: (i) the residual entity after a financial institution has been resolved by the RA; and (ii) financial institutions which are insolvent but whose demise will not cause significant disruption in the wider financial system.
The legislation will also incorporate enabling provisions for a funding framework addressing options to meet the cost of resolving financial institutions.
Due to the complexity of the issues involved, the development of this bill is being overseen by a technical working group pulled from the Financial Regulatory Committee under the BOJ Act. The working group will comprise of sub-working group teams with representatives from the Ministry of Finance and the Public Service, Bank of Jamaica, Financial Services Commission and the Jamaica Deposit Insurance Corporation.
Pending Subsidiary Financial Legislation
(Regulations, Rules, Codes of Conduct)REGULATIONS
There are no pending Regulations at this time.SUPERVISORY RULES
Anti-Money Laundering, Counter Financing of Terrorism (AML/CFT) and Proliferation of Weapons of Mass Destruction Rules.
The international standards on AML/CFT and proliferation (i.e. the revised FATF Recommendations 2013 (last amended March 2022)) include a number of enhanced requirements with which countries are asked to comply. [1] These enhanced requirements include the application of a risk-based approach to allow competent authorities to ensure that measures to prevent or mitigate money laundering or terrorist financing are commensurate with the risks identified. The rules also enable such authorities to make decisions on how to allocate their resources in the most effective way. Accordingly, the framework that is implemented should, among other things:
- maintain the requisite focus on the risks to the system, customers, services (including the business line and products) and the quality of compliance;
- have express triggers for periodic reviews, that is, major events, changes in management or operations;
- ensure that the frequency and intensity of supervision are clearly dependent on risks;
- ensure consolidated supervisory obligations with respect to AML/CFT remain applicable, including the requirement for regulatory co-operation nationally and cross-border, including co-operation on a diagonal basis;
- ensure that supervisors have the range of disciplinary and financial sanctions (including the application of administrative fines and the power to revoke and/or restrict or suspend the licence); and
- ensure that co-operation and collaboration with local competent authorities can be undertaken.
Proposals for the development of drafting instructions for AML/CFT Supervisory Rules under the Banking Services Act, 2014 (BSA) and the Bank of Jamaica Act are being developed.
These rules will, among other things:
- codify the risk-based examinations and oversight processes pertaining to the AML/CFT oversight functions of Bank of Jamaica; and
- outline the areas in the BOJ’s AML/CFT Guidance Notes with which compliance will be expressly mandated and allow BOJ to directly sanction breaches of those requirements. BOJ is currently the competent authority with responsibility for monitoring compliance with the requirements of the Proceeds of Crime Act (POCA) and Terrorism Prevention Act (TPA) for institutions comprising of the following:
- DTIs under the BSA;
- cambios (Exchange Bureaux);
- money transfer and remittance agents and agencies; and
- a society registered under the Cooperative Societies Act, which carries out credit union business.
The requirements under the Guidance Notes with which compliance will be expressly mandated pertain to areas regarding:
- Risk-Based Framework;
- Know-Your-Customer, Know the Transaction Counterparty and Customer Due Diligence;
- Special Guidance – UNSEC Resolutions on the Proliferation of Weapons of Mass Destruction;
- Special Guidance – Branches and Subsidiaries;
- Nominated Officer Regime;
- Board Responsibility and Employee Integrity and Awareness;
- Compliance Monitoring;
- Transaction Monitoring and Reporting; and
- Record Keeping
The third draft of the AML/CFT Rules under the BSA have been issued for feedback.
NON-FINANCIAL LEGISLATION
The National Identification Registration Act, 2021
The objects of this Act are to provide for: (i) a system of national identification; and (ii) the administration of the system of civil registration, in conformity with all laws applicable to civil registration, the protection of identity information and other personal data. The administration of the national identification registration system will be undertaken by the National Identification Registration Authority whose functions will include developing policies, procedures and protocols for the creation, management and operation of the National Identification System, including policies, procedures and protocols relating to:
(i) the enrolment of eligible individuals;
(ii) the generation and assignment of a National Identification Number to each enrolled individual;
(iii) the issue of a National Identification Card to each enrolled individual;
(iv) the safe custody and, where required, disposal of all identity information collected or obtained by the Authority or stored in the National Databases; and
(v) the promotion of the use of the National Identification Number and the National Identification Card.The Authority is also charged with, among other things:
- developing appropriate systems and protocols for the security, secrecy, and necessary safeguards for the protection and confidentiality, of the information stored in the National Databases;
- monitoring and promoting compliance with this Act and regulations made under this Act and developing public education programmes with a view to promoting such compliance; and
- developing policies and protocols for the prevention of identity theft and other instances of fraud with respect to identity information.
Enrolment for a national identification under this Act is voluntary and can be done directly by an individual or on that individual’s behalf. The use and processing of information relating to an individual will be done in accordance with the Data Protection Act. The National Identification and Registration Act was passed in November 2021 and is expected to be brought into effect shortly.
The Data Protection Act, 2020
This Act was passed in June 2020 and seeks to protect Jamaicans from unlawful and/or reckless disclosure of their personal information. The Act sets ‘standards’ for data processing (sections 21 through 31) to ensure that personal data is processed fairly and lawfully and only where necessary. PART V— Exemptions to Data Protection Standards or to Disclosure to Data Subject Requirements – outlines exemptions that Regulators should be able to rely on as not limiting their ability to undertake their statutory regulatory functions and ability to co-operate with domestic authorities and international counterparts.
The Minister of National Security can also issue a certificate of exemption from any of the standards or disclosure to data subjects requirements in order to safeguard national security (see section 33). The Minister’s powers in this regard can be appealed by application to the court for judicial review on the grounds on which the certificate was issued.
The Act is being implemented on a phased basis. Responsibility for implementation and administration of the Act falls under the Ministry responsible for information and communications technology through the Office of the Information Commissioner.
[1] The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
The FATF has developed a series of Recommendations that are recognised as the international standard for combating money laundering and the financing of terrorism and proliferation of weapons of mass destruction. They form the basis for a co-ordinated response to these threats to the integrity of the financial system and help ensure a levelled playing field. First issued in 1990, the FATF Recommendations were revised in 1996, 2001, 2003, 2012 and most recently in 2022 to ensure that they remain current and relevant. These recommendations are intended to be of universal application.
The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures and promotes the adoption and implementation of appropriate measures globally. In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse. – source www.fatf-gafi.org.
NB. – FATF membership (directly and via associate membership through FATF Styled Regional Bodies) stands at 198 countries.
