In 2007 the Banks and Trust Companies (Private Trust Companies) Regulations ("the Act") introduced a light touch regulatory regime for private trust companies in The Bahamas. Effective December, 17th 2012, the regulations to the Act were amended by the Banks and Trust Companies (Private Trust Companies) (Amendment) Regulations 2012. The changes are discussed below ("The Regulation Amendments"):
- The Regulation Amendments allow for private trust companies to
be limited by shares OR by guarantee, with a minimum share capital
or guarantee of five thousand dollars. Previously, only companies
limited by shares could qualify as private trust companies. This
change can obviate the need for a holding structure for the shares
of a private trust company such as a purpose trust or a foundation,
potentially simplifying trust structures and reducing costs.
- Private Trust Companies are exempt from many of the
requirements of an ordinary trust company. For example, under the
Act, a private trust company would be exempt from the requirement
to obtain a business licence provided that the criteria to qualify
as a private trust company are met. These criteria include a
requirement that a designated person has to be identified; that the
company complies with the definition of a private trust company
under the Act; and that the private trust company does not solicit
trust business. The previous regulations made provisions for the
Registered Representative of the private trust company which no
longer met the requirements for exemption, to notify the Inspector
in writing within seven days. The Regulation Amendments now also
provide that the Inspector of the Central Bank of The Bahamas must
be provided with any additional information and documents to
evidence such change as the Inspector may subsequently
require.
- Furthermore, in accordance with the Regulation Amendments, the
Registered Representative will now have the responsibility to
notify the Inspector if it ceases to act as the Registered
Representative of the private trust company or of any change in the
Registered Representatives' principal address. Previously, the
responsibility for notifying the Inspector of a change in
Registered Representative lay with the private trust company
- Finally, the Regulation Amendments remove the requirement for a
Registered Representative to obtain the annual approval of Central
Bank in order to continue the provision of Registered
Representative services. This is accomplished by the elimination of
Regulation 9 of the Act which stated that the validity of an
approval to act as a Registered Representative had to be renewed on
an annual basis by application to the Governor of Central
Bank.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.