Banking Services Act, 2014

THE BANKING SERVICES ACT, 2014
(Act of 2014)
ARRANGEMENT OF SECTIONS
I'" PART I. Preliminary
l. Short title and commencement.
c'
2. Interpretation.
3. Meaning offit and proper person.
PART II. Administration
4. Exercise offunctions under this Act.
S. Principles to take into account when performing functions.
6. Constitution ofSupervisory Committee.
7. Functions ofSupervisory Committee.
8. Protection ofmembers ofSupervisory Committee.
9. Secrecy ofSupervisory Committee.
PART III. Prohibition and Restriction
on Deposil Taking
10. Restriction on deposit taking generally.
II. Prohibition on shell banks.
12. Offence offraudulent misrepresentation re licence, etc.
13. Offence re indictment to place money on deposit.

]4. Restrictions on dealing with, for or on behalf ofprohibited scheme.

.., 15• Offence ofholding out to be licensee.
16. Search warrant for contraventiOn of.... Part.

10' PART IV. Restriction on use ofcertain words t , " ill name or title " \
17. Restriction on use ofcertain words in name or title.
I

ii
PARTV. Licensing 01Depo.Jit Taking /nstil'lltioM and

Financial Holding ComJH1!lles

Application of Part V.
Licence.
Matters to be taken into account. 'J
Restriction on grant oflicence.

22- Grant, refusal or revocation oflicence. of

Non-transferability, etc. oflicence.
Licence conditions.
Display of licence.
Publication ofchange ofname, etc.
PART VI. Appeal
Z7. Establishment ofSupervisory Appeals Board.
Appeal to Supervisory Appeals Board.
Confidentiality requirements for Supervisory Appeals Board.
PART VII. Governance olLlcenseu

Alteration ofIncorporating Documents

Restriction on alteration of incorporating documents.
Boards and Management Committees
Board and management committees.
Board ofDirectors
Board ofdirectors.
Policies.
Independent directors.
\J
Separation ofpositions ofchairman and chief executive officer.
General Provisions re Governa1*e ... 1
Duty ofcare. J
}
Duty to undertake fit and proper assessments.

The Banking Services Act, 2014 [No. ] iii
38. Persons debarred from directorship, management and key employment.
39. Duty to notifY dismissals, etc.
PART VIII. Capital and Reserves
40. Capital base.
..
..:- 41. Statutory reserve fund.
~. 42. Retained earnings reserve.
PART IX. Cash Reserves and Liquidity Requirements
43. Cash reserves.
44. Liquid asset requirements.
45. Prudential liquidity requirements.
PART X. Fixed Assets
46. Limit on fixed assets.
47. Valuation offixed assets.
PART XI. Restricted, Prohibited and Permitted Activities
ofLicensees
Restricted and Prohibited Activities
48. Restrictions on periods of deposits by merchant bank.
49. Restriction on engaging in trade or business.
50. Restriction on acquisition of fixed assets.
51. Restriction on grant ofcredit facility on security of own shares, etc.
52. Restriction on payment of dividends on own shares.
53. Restriction on beneficially holding land in fee simple.
54. Restriction on management or investment of customers' funds.
Permitted Activities
55. Permitted activities.
PART XII. Counter party Exposure Limits
56. Application ofPart XII.

iv [No. ] The Banking Services Act, 2014
57. Restriction on incurring counterparty exposures.
58. Restriction on grant of unsecured credit facilities.
59. Restriction on aggregate counterparty exposures.
60. Restriction on holdings in companies.
61. Duty to notifY Supervisor on counterparty exposures.
62. - Modification etc., ofcounterparty exposure limits.
63. Counterparty exposures outside ofthe limit. .I
PART XIII. Supervision and Examination
o/Licensee
64. Supervisor's general power ofsupervision and examination
oflicensee
65. Supervisor may require information.
66. Obligation ofofficer to supply information.
67. Powers of inspection.
PART XIV. Supervision o/Financial Groups
68. Definition of "consolidated supervision".
69. Financial group ownership structure.
70. Prohibited ownership structures.
71. Risk related to financial group structure.
72. Restructuring of a group.
73. Ownership ofsubsidiaries, etc. by licensees.
PART XV. Obligations Specific to Financial
Holding Companies
74. Restriction on financial holding company.
75. Responsibilities offinancial holding company.
PART XVI. Regulation o/Shareholding and
controlling interests in Licensee
76. Restriction on holdings in licensee by foreign government.
77. Substantial shareholding in licensee.

The Banking Services Act, 1014 [No. J v
78. Regulation ofeffective control oflicensee.
79. Power to obtain infonnation re shareholding.
80. Power to restrict dealing in specified shares.
81. Appeal against restriction notice re shareholding.
-'"
PART XVII. Returns andAccounts
82. Returns, etc.
83. Loss reserves on credit facilities.
84. Presentation and publication of financial statements.
85. Consolidated accounts.
86. Insolvency disclosed by financial statements.
87. Electronic submission and admissibility of returns and prescribed
documents.
PART XVIII. External Auditors
88. Appointment ofexternal auditor.
89. Disqualification ofexternal auditor.
90. Power ofSupervisor to object, etc. to appointment ofexternal auditor.
91. Duty of external auditors to report to Supervisor on transactions, etc.
affecting licensee's financial viability.
92. Review ofexternal auditor'S working papers, etc.
93. Special or expanded audit.
94. Exclusion ofliability.
95. Resignation. etc. ofexternal auditor.
PART XIX. Amalgamation and Transfer
~ Amalgamation ofBuilding Societies

Societies may unite.

.e.

Society may transfer its engagement to another society.
Supplementary provisions relating to societies.
Special resolutions.
Schemes ofarrangement.

vi [No. ] The Banking Services Act, 2014
101. Conversion of a society into a company.
102.
103.
104.
105.
106.
Amalgamation and Transfers ofBanks and Merchant Banks Amalgamation and transfer. Deposit ofstatements "with Supervisor. Vesting of assets on sale of institution. Transfer of trust business. Effect oftransfer. ~' ./ 107.
PART XX. Voluntary Winding up ofLicensee
Restriction on voluntary winding up.
108.
PART XXI. Banking Business Through Agent Arrangements
Agent arrangements.
PART XXII. Enforcement
109.
1l0.
Ill.
Unsafe practices.
Pri:nnpt corrective action.
Temporary management where licensee's capital falls below fifty per centum. 112. 1l3. 114. 115. 116. 117. lIS. 119. 120. 121. Temporary management, reconstruction, winding up and revocation. Licensee ceasing to be viable. Vesting of shares, etc. in Minister. Effect of vesting order. Restructuring transactions. Winding up or schemes ofarrangements. Notice re compensation. Determination ofcompensation. Application to Court. Re-vesting of shares and subordinated debt.
122. Winding up of foreign bank.

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PART XXIII. Additional Enforcement Measures
123. Coercion order.
124. Restitution order.
125. Restraint order, settlement agreements and pecuniary penalties.
PART XXIV. Unclaimed Moneys
126. Unclaimed moneys.
PART XXv. Offences and Penalties
127. Offences and penalties.
128. Offence where no special penalty is provided.
129. Offence by body corporate.
130. Fixed penalties.
PART XXVI. General
131. Regulations.
132 Supervisory Rules and codes of conduct.
133. Regulations may provide for greater penalties.
134. Secrecy ofofficials.
135. Protection ofpersons providing information under this Act.
136. Minister may amend monetary penalties and certain Schedules.
137. Review ofAct.
138. Repeal.
139. Saving of Regulations made under repealed Acts.
140. Duty to notifY regulator and JDIC in certain cases.
141. Power of licensee to enforce transactions.
142 Amendment ofBank ofJamaicaAct.
PART XXVII. Transitional Arrangements
143. Transitional arrangements.
144. Consequential amendment ofenactments.
SCHEDULES.

-~
J

JAMAICA
NO. b -2014
;.
I assent,
Governor-General.
AN ACT to Repeal the Banking Act and the Financial

Institutions Act; to amend the Bank ofJamaica Act and

the Building Societies Act; to make new provision with

regard tothe supervisionofbanks, financialholdingcompanies

and other financial institutions; and for connected matters.

The date notified by the Minister
[ bringing the Act into operation ] BE IT ENACTED by The Queen's Most Excellent Majesty, by and with the advice and consentofthe Senate and HouseofRepresentatives ofJamaica, and by the authority ofthe same, as follows:
PART I. Preliminary

This Act may be cited as the Banking Services Act, 2014 and Short title
shall come into operation on a day to be appointed by the Minister by :~'I__ notice published in the Gazette.

2 [No. ] The Banking Services Act. 2014 Interpretation. 2.--(1) In this Act, unless the context otherwise requires "advertisement" means the publication, display, presentation, dissemination or conveyance ofany (a) invitationorsolicitation; (b) sky sign, notice, handbill, brochure, pamphlet, placard. board, poster or other I similarpublication; (c) circular; (d) exhibitionofphotographs orcinematograph films; (e) word, message on paper, message transmitted by way ofelectronic means, a social network or the Internet, or mobile message; (f) sound broadcasting; (g) programme, television or telephone communication; or (h) other form ofcommunication, but does not include a prospectus, as defined in the Companies Act, issued by a company and, subject to subsection (8), reference to the issue ofan advertisement shall be construed accordingly; "advertisement for deposits" means, in relation to any person, an advertisement inviting the public, or members ofthe public, to make a deposit with that person; "affiliated" has the meaning assigned to it in section 2 ofthe Companies Act; "assigned capital" means any portion ofthe capital ofa foreign bank, consisting ofunencumbered assets, as is specifically and exclusivelyassigned bythat foreign bank to the financing ofits branch operations in Jamaica and is not available to finance any other operation ofthe foreign bank;

The Banking Services Act, 2014 [No. J 3 "authorized officer" has the meaning assigned to it in the Bankof Jamaica Act; "bank" means any company (a) licensed as a bank under the Banking Act prior !' to the commencement date; or (b) licensed as a bank under this Act; "Bank" means the Bank ofJamaica established by the Bank of Jamaica Act; "banking business" means- (a) the business ofanyone or more ofthe following activities carried out by a deposit taking institution (i) receiving deJX>sits from the public which may be invested by way ofadvances to customers or otherwise; (n) inthe caseofabank, and without limiting the application ofsub-paragraph (i) in relation thereto, receiving deposits from the public on current or deposit account, which is repayable, on demand, by cheque or order; (Ui) the operation of automated banking machines, automated teller machines or similardevices; (iv) the issue ofelectronic money; or ~ (v) any other business specified by the Supervisor as bankingbusiness by notice published in the Gazette; but (b) does not include payment products or activities authorized by the Bank under the Payment,

4 (No. ] The Banking Services Act, 1014 Clearing and Settlement Act carried out by an entity other than a deposit taking institution; "branch" means an office or place ofbusiness (other than ahead office, principal office or representative office) where a deposit taking institution carries on anybanking business; ''buildingsociety" means asociety incorporatedWlderthe Building / Societies Act and (a) licensed WlderthatAct as a building society prior to the commencement date; or (b) licensed Wlder this Act to operate as a building society; "capital base", in relation to a licensee, means Tier I capital; "capital share", in relationto abuilding society, means a pennanent share that is not redeemable; "commencement date" means the day on which this Act comes into operation; "company" means abody corporate, whether incorporated Wlder the laws ofJamaica or ofany other COWltry, and any entity which, in the opinion ofthe Supervisor, is analogous to a body corporate; "connected person" shall be construed in accordance with subsection (2); "control" in relation to a licensee or any other company, means the power ofa person (whether acting alone or jointly with another, who holds or is beneficially entitled to fifty per centum or more of the votes in the licensee or other company) to secureby means ofthose voting rights that the affairs ofthe licensee or other company are conducted in accordance with the wishes ofthat person;

The Banking Services Act, 2014 [No. 1 5 "counterparty exposure", in relation to a licensee, includes any transaction or arrangement that Creates an exposure to a counterparty, whether or not the exposure is recorded on the licensee's balance sheet, such as (a) creditfacilities; (b) commitments made to or on behalf of counterparties, whether used or unused and .,. whether revocable or irrevocable; (c) contingent liabilities; (d) investments, and other holdings ofdebt or equity securities; (e) reverse repurchase transactions; and (f) derivatives; "counterparty group", for the purpose ofdetetmining compliance with exposure requirements under this Act, includes two or more persons (whether or not a "group") who are not connected to the licensee and who are linked or related to each other byone or more ofthe following (a) cross guarantees; (b) common collateral, common ownership, management or financial interest, partnerships or joint ventures; (c) the ability to exercise control over the same persons, whether direct or indirect; (d) financial interdependence in such a manner that the financial soundness ofanyofthem may affect the financial soundness ofthe others; or (e) any other connection or relationship which, according to the Supervisor's assessment, identifiesthe counterparties asconstitutinga single risk to the licensee; "credit facilities" includes loans, advances. comfortletters. finance leases, standby and commercial letters ofcreditand anyother

The Banking Services Act, 2014 6 {No. ] arrangements whereby acustomer ofa licensee has access to the funds or financial guarantees ofthe licensee or the licensee undertakes, on behalfofacustomer, financial liability to another person; "deferred share" means a share (whether or not interest bearing) issued by a mutual society on terms that it shall not be redeemable in any period ofless than five years; "deposit" means- (a) a sum ofmoney paid on terms (i) under which it will be repaid (A) with or without interest or a premium; and (B) on demand or at a time or in circumstances agreed by or on behalfoftheperson making the payment and the person receiving it; and (iI) subject to subsection (7), which are not referable to the provision ofproperty or services or to the giving ofsecurity; or (b) any other dealing, transaction or arrangement, involving the receiptoffunds, whichaccording to the Supervisor's assessment should be deemed a deposit and which is so specified by the Supervisor by notice published in the Gazette; "deposit liabilities" means, in relation to (a) a Jamaican-based deposit taking institution, the deposit liabilitiesofthe institution whetherpayable in Jamaica or elsewhere; and

The Banking Services Act, 2014 [No. ] 7 (b) a foreign bank, the deposit liabilities ofthat bank payable under its branch operations in Jamaica whether payable in Jamaica or elsewhere; "depositor" means a person entitled, or entitled prospectively, to repayment ofa deposit, whether the deposit is made by that person or not; "deposittaking institution" means (a) a bank; (b) a merchant bank; or (c) abuilding society; "Deputy Supervisor" means the Deputy Supervisor ofbanks and financial institutions appointed under section34B ofthe Bank ofJamaica Act; "designatedauthority" includes (a) the Chief Technical Director of the Financial Investigations Division orhis nominee; and (b) the CommissionerofPolice or his nominee; "director", subjectto section 32, means a director, trustee or other person who is a member of the board or other body (by whatever name called) ofa company (by whatever name called) that is responsible for the governance and oversight ofthe company; "doctnnent"means anything inwhichinfonnationofany description is recorded; "effective control" means the ability ofa person (whetheracting alone, or jointly with another) to ensure that the affairsofthe licensee or other company are conducted inaccordancewith the wishes ofthat person, whether or not the person has control ofthe licensee or other company; "electronic money" means monetary valuerepresented bya claim on the issuerthereof, which value is (a) stored or recorded by electronic means;

8 [No. ] The Banking Services Act, 2014 (b) provided bythe issuer in exchange for the present or future receipt of moneys or other valuable consideration from the person entitled to make the claim; (c) transferable and accepted as a means ofpayment by personsother than the issuer, whether via point ofsale or similar technology or otherwise; (d) redeemable orrepayable, whether in full orinpart, on demand for cash, by deposit into a bank account or through the use of any automated banking orautomatedtellermachine orany similar device; or (e) not referable to credit facilities, whether secured or unsecured, extended by the issuer; "eligible auditor" means a registered public accountant as defined in section 2 ofthe Public Accountancy Act to whom section 89(1) does not apply; "eligible reserves" means the statutory reserve fund, the retained earnings reserve and any otherfund established by a licensee and approved bythe Supervisoras beingpartofthe licensee's capital base and regulatory capital, whether on a stand alone basis or on a consolidated basis; "financial group" means a group that (a) includes a deposit taking institution; (b) is headed by a financial holding company; and (c) is comprised ofcompanies that each undertakes one or more financial services and, where applicable, acompany refemxi to insection 73(2); ''financial holding company" means acompany (a) licensed under this Act as a financial holding company; and

The Banking Services Act, 2014 [No. ] 9 (b) under-Mlichall othercompanieswithin the financial group are held, including (i) any of that company's subsidiaries incorporated outside ofJamaica; and (n) entities overwhichit has effective control; "ftnancial institution" means a person who undertakes or engages in ftnancial services; ''financial services"includes- (a) banking business; (b) lending; (c) consumer credit; (d) ftnancing commercial transactions; (e) transfer ofmoney or value; (t) issuing electronic money; (g) ftnancial guaranteesand commitments; (h) dealing in securities and trading in other financial instnunents; (I) participation in security issues; (j) individual andcollective portfolio management; (k) insurance business and insurance related financial services; (I) investment ofmoneys and other ftnancial assets on behalf ofthird parties; (m) pension fimd management; and (n) any otherservice designated as aftnancial service by the Supervisor by order published in the Gazette, subject to affinnation resolution; "fit and proper person" hasthe meaning assigned to it in section 3;

10 [No. ] The Banking Services Act, 2014 "foreign bank" means a bank which is not incorporated in Jamaica and the head office ofwhich is outside ofJamaica; "foreign financial institution" means a person formed, or incorporated under the laws ofa country other than Jamaica that undertakes or engages in financial services; ''foreignfinancial regulatotyauthority" means asupervisotyauthority in a country other than Jamaica which has supervisory ftmctions (a) with respect to a company that is incorporated in and provides financial services in thatcountry; and (b) which are similar to the functions ofthe Bank or the Financial Services Commission; "functions" include powers and duties; "Govemment company" means a company registered under the Companies Act, being a company wholly owned by the Government or an agency ofGovernment or in which the Government or an agency ofGovernment holds more than fifty per centum ofthe shares; "group" in relation to a company, means that company and (a) any other company that is its holding company; (b) any other company that is a subsidiaty of the holding company; (c) any company that directly or indirectly controls or is controlled, directly or indirectly, by any company referred to in paragraph ( a) or (b); (d) any company that effectively controls or is effectively controlled by any company referred to in paragraph (a) or (b); and (e) any company that is controlled by a person who directly or indirectly controls a company referred to in paragraph (a), (b) or (c);

The Banking Services Act, 2014 [No. ] II "immediate relative" in relation to any person, means the person's spouse, his children (including step-children) and their spouses, his parents, his brothers or his sisters; "incorporating documents" means the statute, charter, memorandum ofassociation, articles ofassociation, articles ofincorporation, rules and by-laws, partnership agreements, or other instruments, under or by which a licensee or other body isestablished, its governing and administrative structure and the scope ofits fimctions and business are setout, whether contained in one or more documents; "independentdirector" means a director ofa licensee or company who is not (a) an employee ofthe licensee or company; (b) a person holding five per centum or more ofthe shares ofthe licensee or company or a connected person in relation to the licensee or company; or (c) a party to a significant economic or other relationship with the licensee or company that, in the opinion ofthe Supervisor, is inconsistent with that director being considered as independent of the licensee or company; "key employee" means (a) a person who is employed or contracted below the level of the management of a licensee to perform fimctions that (i) can substantially affect the financial condition or reputation ofthe licensee, or both; and (ii) meet the criteriaspecifiedinany guidelines prescribed by the Supervisor; or (b) a person who is deemed by the Supervisor to be a key employee ofthe licensee; "land" includes an interest in land;

12 [No. ] The Banking Services Act, 2014 "licence" means a licence granted under this Act;

"licensee" means a person or body that is licensed under this Act;

"manager" includes, anyperson, by whatever name called, for the

time being in charge ofthe management ofa licensee or of important aspects ofthe operations ofa licensee; "merchant bank" means a company that (a) immediately preceding the commencement date was a "licensee" under the Financial Imtitutiom Act; or (b) is licensed as a merchant bank under this Act; "mixed conglomerate" means a corporate group- (a) which includes a deposit taking institution; and (b) at least one member ofwhich undertakes real sector activities; "mutual society" means a building society in relation to which (a) all assets ofthe society are held by members in common; (b) each member is entitledto one vote withoutregard to the number of shares, if any, held by the member; and (c) any smplus assets remaining after a dissolution of the society are to be distributed among members paripassu; "net profits" shall be construed in accordance with section 41 (5); "officer", in relation to a body corporate, includes an executive director, amanaging director, a chief executive officer, a chief financial officer, a manager and the C9mpany secretary; "paid-up capital" shall beconstrued in accordancewith subsection (4); "permanent capital fund" with respect to mutual societies means non-withdrawable funds set aside out ofrealized reserves to

The Banking Services Act, 2014 [No. ] 13 meet minimum capital, which the SupelVisor has approved being treated as permanent capital; "proprietarysociety" meansabuildingsociety in relation to which (a) voting rights are confined to a particular class of shares and are determined by the number of shares held; and (b) any surplus assets remaining after a dissolution are to be distributed to holders of a particular class ofshares or subordinated debt in the rank and proportion appropriate to their share holding; "real sector activities" means, in relation to a financial group, any commercial activities other than financial selVices; "regulator" means the Bank, the Financial SelVices Commission, the Registrar ofCooperatives, a foreign fmancial regulatory authority or any authority that has fimctions with respect to a company which is incorporated in Jamaica or selVice which is offered in Jamaica that are similar to the supelVisory fimctions ofthe Bank or the Financial Setvices Commission; "regulatory capital", in relation to a licensee, means Tier I capital plus Tier 2 capital less any deductions prescribed under any regulations relating to capital adequacy made under this Act; "representative office" means any office of a deposit taking institution or financial holding company which is not a head office, principal office or branch; "retained earnings reselVe" means a voluntary reselVe established by a licensee that has been notified as such to the SupelVisor and into which is paid the portion ofa licensee's net profits, including realized capital gains, as the licensee may determine; "secured", in relation to credit facilities, means an interest by way ofsecuritythat takes effect as a legal interest in the underlying collateral and has been perfected in accordance with the applicable law and; for the purpose ofthis definition, security shall be construed as including a confirmed irrevocable letter

14 [No. ] The Banking Services Act, 2014 ofcredit that is issued by a licensed bank or by a foreign bank and is acceptable to the Supervisor and such other instruments as the Supervisor may, from time to time, determine; "shell bank" means a bank that has no physical presence in the countr:y in which it is licensed and each ofthe following shall not constitute, on its own, physical presence- (a) the appointmentofalocal agent orthe ernployment ofnon-managerial level staff; (b) the presence ofresident staff who do not direct the policy and strategy ofthe bank; (c) the establishment ofthebank solely or principally by virtual means; or (d) any other type or kind ofestablishment which is deemed by the Supervisor to be consistent with operating as a shell bank; "statutoryreserve fund" means the fund maintained under section 41; "subordinated debt" means an instnunent evidencing a licensee's indebtedness, whereby the indebtedness will, in the event of the insolvency or winding up ofthe licensee, be subordinated in right ofpaymentto all deposit liabilities and all liabilities of the licensee except those that, by terms, rank equally with, or are subordinate to the indebtedness; "subsidiary" has the meaning assigned to it in section 151 (1 ) of the Companies Act; "substantial shareholder" means a person who holds twenty per centum or more ofthe shares ofa licensee; ''Supervisor''means the Governor ofthe Bankacting in the capacity as the Supervisor ofbanks financial holding companies and other specified financial institutions under section 34B ofthe Bank ofJamaica Act;

The Banking Services Act, 2014 [No. ] 15 "Supervisory Appeals Board" means the appeal tribunal established by section 27; "Supervisory Committee" means the committee established by
section 6;
"Supervisory Department" means the department established under
Part VA ofthe Bank ofJamaica Act;
"Supervisory Rules" means the rules made by the Supervisory Committee under section 132; "Tier 1 capital" has the meaning assigned to it in the First Schedule First or as otherwise prescribed; Schedule. "Tier 2 capital" has the meaning assigned to it in the First Schedule First or as otherwise prescribed; Schedule. "trust business" includes property devolving upon a licensee, whether in the capacity oftrustee, executor or administrator; "ultimate holding company" means the company under which the other companies within a group are held; "unsecured", in relation to credit facilities, means (a) granted without security; (b) granted without the lender's interest in the assets comprising the security taking effect as a legal interest and being perfected in accordance with the applicable law; or (c) in the case of credit facilities granted against security, any part thereof which at any given time exceedsthe market value ofthe assets comprising the security or which exceeds the valuation approved by the Supervisor whenever he deems that no market value exists for such assets; "voting right", in relation to a body, means a currently exercisable right to cast a vote at a meeting ofshareholders or members ofthat body.

16 [No. ] The Banking Services Act, 2014 (2) For the purposes ofthis Act the following persons shall be treated as being connected with a given licensee ("L") and the licensee with them, and shall be so treated notwithstanding that at the relevant time any ofthe persons in question (not being individuals) had not yet come into existence or had ceased to exist (a) a holding company or subsidiary ofL; (b) a subsidiary ofa holding company ofL; (c) a holding company ofa subsidiary ofL; (d) a company ofwhich L has control or effective control; (e) a company that, whether by itself or jointly with another, has control or effective control ofL; (t) any company of which L and persons connected with L together have control or effective control; (g) any company that together with L constitute a group; (h) an individual who is a director, manager or a person who has control ofL or any partner or any immediate relative of such director, manager or person; (i) the ultimate holding company ofL; (j) substantial shareholders ofL; (k) the ultimate beneficial owners ofany substantial shareholding in L, whether under a trust or other legal arrangement or through any direct or indirect shareholding; and (1) any other person identified by the Supervisor to be a person who should be treated as connected to L by virtue ofthat person's relationship with L. (3) A company is the holding company ofa company that is its immediate, intennediate or ultimate subsidiary whether the holding company holds that other company's shares on trust or is the beneficial owner ofthe shares.

The Banking Services Act, 2014 [No. .7 (4) Indetennining the paid-up capital ofa licensee (a) unless the Supervisor otherwise determines and subject to

paragraph (b), there shall be disregarded any portion of

capital subscribed to and paid-up by a connected person

who had within the three years immediately preceding the

payment, received from the licensee a loan (other than a

loan referred to in subsection (5», deposit or advance ofan

amount equal to or greater than the amount ofthat portion of

the capital; and

(b) the amount disregarded under paragraph (a) consequent on

any loan, deposit or advance shall be limited to the amount

remaining unpaid on the loan, deposit or advance.

(5) Subsection (4) shall not apply to any secured loan where the licensee's shares are not used as security for that loan. (6) Nothing in this Act shall be construed as permitting a licensee to reduce the amount held in the retained earnings reserve without the prior approval in writing ofthe Supervisor. (7) Inparagraph (a) (ii) ofthe definition of"deposit" in subsection (1), money paid on terms which are referable to the provision of property or services or to the giving ofsecurity if, and only if, it is paid by way of. (a) advance or part payment for the sale, hire or other provision

ofproperty or services ofany kind and is repayable only in

the event that the property or services is or are not in fact

sold, hired or otherwise provided;

(b) securityfor payment for the provisionofproperty or services

ofany kind provided or to be provided by the person by

whom or on whose behalf the money is accepted; or

in a particular state ofrepair or otherwise.

(8) For the purposes ofthis Act, an advertisement issued by any person by way ofdisplay or exhibition in a public place shall be

18 [No. ] The Banking Services Act, 2014 treated as issued by the person on every day on which the person causes or pennits it to be so displayed or exhibited. Meaning of 3.-{1) For the purposes ofthis Act, an individual, whether in fit and proper Jamaica or elsewhere is a fit and proper person if- person. ' (a) theindividual (1) has not been convicted ofan offence involving dishonesty or of an offence listed in Part III of thisAct orinthe Second Scheduleto the Proceeds ofCrime Actor an offence that is similar to any suchoffence in anotherjurisdiction; (Ii) is not an undischarged bankrupt; and (m) is in compliance with any tax and other statutory requirements imposed on the individual; (b) the individual's employment record orany other information does not give the Supervisory Committee reasonable cause to believe that the individual carried out any act involving dishonesty oranyactinvolving improprietyinthe engagement ofbanking business or other financial services; and (c) the individual is, in the opinion of the Supervisory Committee (1) a person ofsound probity, and is able to exercise competence, diligence and sound judgment in fulfilling hisfunctions inrelation to the licensee and whose relationship with the licensee will not threaten the interests ofdepositors; (Ii) a person whose appointment to the board of, employment by, orownership of, the licensee will not result in a conflict ofinterest; and (Iii) a person who possesses the knowledge skills and experience which are necessary for the intended functions to be carried out by that person.

The Banking Services Act, 2014 [No. 1 19 (2) For the purposes ofthis Act, the Supervisor shall assess whether the directors, officers, key employees and substantial shareholders oflicensees and persons mentioned in subsection (3), are fit and proper persons (a) on an on-going basis; (b) on the review ofa licensing application or any application

involving a change in the ownership of, or control of, a

licensee or a person to whom subsection (3) relates.

(3) The persons to whom subsection (2) relates are- (a) anultimate holding company; (b) where the Supervisory Committee has permitted an

ownership structure under section 69(3) and (5) and 73(2),

anyentitywithin that ownership structurethatthe Supervisory

Committee so determines;

licensee under this Act but who, in the opinion of the

SupervisoryCommittee? undertakes key functions on behalf

ofthe financial group or for a licensee under this Act; and

(d) a foreign financial holding company.
(4) The Supervisory Committee shall have regard to anyevidence that the individual (a) has engaged in any business practice appearing to the

Supervisory Committee to be deceitful or oppressive or

otherwise improperor which reflects discreditto his method

ofconducting business; or

(b) has contravened any provision ofany enactment designed

forthe protection ofthe public against financial loss dueto (i) dishonesty, incompetence or malpractice by persons concerned in the provision ofbanking, insurance, investment or other financial services or in the management ofcompanies; or (ii) bankruptcy.

20
Exercise of functions under this
Act.
Principles to take into account when performing functions. Constitution of Supervisory Committee. Second
Schedule.
[No. ] The Banking Services Act, 2014 (5) Where the Supervisory Committee proposes to exercise functions under this Act in relation to a company that is regulated by another regulator, the SUpeMsory Committee shall cause the SUpeMsor to consult with that regulator before exercising those functions. (6) For the purposes ofdetermining whether a person is a fit and proper person, the Supervisory Committee may consider any assessment undertaken by a regulator.
PART II. Administration
4. The Supervisor and the Supervisory Committee shall, without
limiting their respective powers under any other enactment, exercise the functions conferred upon them by this Act and the BankofJamaica Act.
5. In the performance oftheirfunctions underthisAct, the Supervisor
d S an upervisory Committee shall take into account the following principles- (a) there shallbe objective, independent and impartial supervision oflicensees on the basis ofsound judgement; (b) there shall beconsistency inthe treatmentofsimilarinstitutions; (c) depositors shall have access to adequate information from the deposit taking institutions; (d) the need for sound governance by licensees; (e) the need for effective risk management by licensees; and (f) unnecessary compliance costs shall be avoided. 6.-{I) For the due administration ofthis Act, there is constituted a committee to be known as the Supervisory Committee. (2) The provisions ofthe Second Schedule shall have effect in relation to the constitution and procedures of the Supervisory Committee.

The Banking Services Act, 2014 [No. ] 21 7.-(1) The Supervisory Committee shall consider and make Functions of Supervisory determinations on the following mattersCommittee. (a) the grant, refusal and revocation oflicences; (b) whether a person is a fit and proper person; (c) matters regarding (i) ,the establishment of branch operations and representative offices; (n) corporate and group restructuring; (w) changes in ovvnership oflicensees; and (lY) amalgamations, mergers and acquisitions. (d) exemptions from the statutoryexposure limits; (e) the variation ofprudential capital adequacy requirements; (f) the authorization of arrangements for the sharing of

information and other forms ofco-operation with any other

regulator;

(g) enforcement measures under this Act; (h) the making ofregulations under PartXXVI for the operation

oflicensees;

(i) monitoring the enforcement ofany code ofconduct;
0) investigatory action related to breaches ofthis Act and any

regulations made under this Act;

(k) objection to the appointment ofexternal auditors; (l) the removal ofexternal auditors; and (m) standards ofsound practices for licensees. (2) The Supervisor shall be responsible for implementing the determinations ofthe Supervisory Committee under subsection (1). (3) In carrying out its functions under subsection (1), the Supervisory Committee shall take into account the assessments and recommendations ofthe Supervisor.

22
Protection of members of
Supervisory
Committee.
Secrecy of
Supervisory
Committee.
Restriction on deposit taking generally.
[No. ] The Banking Services Act, 2014 (4) The SupervisoryCommittee may, to suchextent and subject to such restrictions and conditions as it may think proper, delegate any ofits functions under this Act. (5) Every delegation under subsection (4) is revocable by the Supervisory Committee and the delegation of a function shall not preclude the performance ofthat function by the Supervisory Committee. (6) In making a determination under paragraph ( a) or (c) of subsection(I), the Supervisory Committee shall consult with the Minister on matters relating to the national interest. 8.-{1) No action, suit, prosecution or other proceedings shall be brought or instituted personally against any member ofthe Supervisory Committee, in respect of any act done bona fide in pursuance or execution or intended execution ofthis Act or the Bank ofJamaica Act. (2) Where any member of the Supervisory Committee is exempt from liability by reason only ofthe provisions ofthis paragraph, the Bank shall be liable to the extent that it would be ifthe said member were an employee or an agent ofthe Bank. 9.-{1) A member ofthe Supervisory Committee shall not disclose informationregarding the operations ofany licensee, or the affairs ofa customer ofadeposit taking institution, obtained inconsequence ofthe performance ofhis functions under this Act, otherthan for the purposes ofthisAct. (2) Amemberofthe Supervisory Committee who contravenes subsection (1) commits an offence.
PART III. Prohibition and Restriction on

Deposit Taking

lO.-{I) Except under and in accordapr.e with the provisions of this Act and any regulations made under this Act, a person shall not (a) issue or cause to be issued advertisements for deposits; (b) solicit deposits in any other manner from members ofthe public;

The Banking Services Act, 2014 [No. ] 23 (c) engage in activities involving the taking ofdeposits in any

manner; or

(d) engage in any other banking business.
(2) A person who contravenes subsection (1) commits an offence. 1l.-(1) A person shall not undertake business as a shell bank or Prohibition undertake or facilitate dealings ofany kind or nature with a shell bank. °bn Sichen an s. (2) A person who contravenes subsection (1) commits an offence. 12.-{1) A person shall not fraudulently misrepresent that a person Offence of fraudulent misrepresentation (a) licensed under this Act; or re licence, (b) authorized to engage in business or activities on behalf ofa etc. deposit taking institution. (2) A person who contravenes subsection (1) commits an offence. 13.-{1) A person shall not- Offence re . Co •• hi hth inducement ()a byany statement, promise, lorecast or projection w c e to place person knows to be misleading, false or deceptive; or money on deposit. (b) by any dishonest concealment ofmaterial facts, or by the

reckless making, dishonestly or otherwise, ofany statement,

promise, forecast or projection which is misleading, false or

deceptive,

induce or attempt to induce another person to (i) place money on deposit with the person or any other person; or (ii) enter into, or offer to enter into, any agreement for that purpose. (2) A person who contravenes subsection (1) commits an offence.

The Banking Services Act, 2014 24 [No. ] Restrictions 14.--(1) A licensee shall not, inthe course ofoperations, knowingly on dealing or without exercising reasonable care, have dealings ofany nature with, with. for, or on behalf of or facilitate or conduct any transaction with, for, or on behalf of. prohibited schemes. (a) a person who transacts business in contravention ofthis Part; or (b) a prohibited scheme. (2) A prohibited scheme referred to in subsection (l)(b) is any activity which falls within the definition of "prohibited scheme" set out in, the Securities Act. (3) A person who contravenes subsection (1) commits an offence. (4) The provisions ofthis section shall apply in respect ofany banking business conducted or facilitated by a deposit taking institution involving persons outside ofJamaica with any person situated inside of Jamaica, as ifat all material times all the persons were situated inside of Jamaica. Offence of 15.-(1) A person who is not licensed to engage in banking business holding out shall not use any name, title, trade mark, style, designation or description to be licensee. that representsorimplies that the person is licensed to engage in banking business. (2) A person who contravenes subsection (1) commits an offence. Search 16.-(1) Where an authorized officer has reasonable grounds for :o~~::~e~~on suspecting that a person is committing or has committed an offence of this Pan. under this Part and that evidence ofthe commission ofthe offence is to be found on any premises specified in the information, the authorized officer may, for the purpose ofcarrying out an investigation in relation to the offence, apply, by information, under subsection (2) to a Justice ofthe Peace, for a warrant to search the premises. (2) Subject to subsections (3) and (4), where due to exigent circumstances it is not practicable to obtain a court order to do so, a

The Banking Services Act, 2014 [No. ] 25 Justice ofthe Peace, may, on an application made under subsection (1), issue a warrant authorizing the authorized officer named in the warrant with such assistance as may be necessary and reasonable to (a) enter the premises named in the warrant, with or without a

constable;

(b) search the premises for such books, accounts, records,

cheques, securities or other documents, whether stored

physically or electronically (in this section referred to as

"relevant documents"); and

(c) seize and detain
(i) any relevant documents or cash found in the course ofthe search that, in the opinion ofthe authorized officer, is likely to be ofsubstantial value (whether by itself or together with other documents) to the investigation inrespect ofwhich the application is made; or (ii) any relevant documents that the authorized officer believes, on reasonable grounds, will afford evidence as to the commission ofan offence. (3) A Justice of the Peace shall not issue a warrant under subsection (2) unless he is satisfied that (a) it is not practicable to communicate with any person having

the power to grant entry to the premises;

(b) entry to the premises will not be granted unless a warrant is

produced; or

the authorized officer is granted immediate access to the

relevant documents.

(4) A search warrant shall not be issued under subsection (2) unless (a) the applicant or some other person has given the Justice of

the Peace, eitherorallyorby affidavit, any furtherinfonnation

The Banking Services Act, 2014 26 [No. ] that the Justice ofthe Peace requires concerning the grounds on which the warrant is sought; and (b) the Justice ofthe Peace is satisfied that there are reasonable grounds for issuing the warrant. (5) A search warrant issued under subsection (2) shall state- (a) the purpose for which it is issued, including a reference to the offence that is being committed, has been committed or is believed to have been committed; (b) whether entry is authorized to be made at any time ofthe day or night or during specified hours ofthe day or night; (c) a description ofthe kind ofrelevant documents authorized to be seized; (d) that cash is authorized to be seized; and (e) that the warrant remains in force until (I) it ceases to be in force under subsection (10); or (ii) it is varied or discharged by a Judge in Chambers pursuant to an application made under subsection (9). (6) An authorized officer shall not seize any document which is subject to legal professional priVilege. (7) An authorized officer may, upon request, make copies of any relevant documents or take extracts therefrom at the expense of the person who is suspected ofcommitting or having committed the offence. (8) A person who is aggrieved by the issue ofa warrant under this section may apply to a Judge in Chambers to vary or discharge the order and shall, within twenty-four hours after making the application, serve notice on the Supervisor to join in the proceedings.

The Banking Services Act, 20/4 [No. J 27 (9) A warrant remains in force- (a) Wltiltheearlierof (i) the end ofthe period for which it is to remain in force as stated in the warrant; or (n) fourteen days after the date on which the warrant is issued; or (b) until it is varied or discharged by a Judge in Chambers

pursuant to an application made Wlder subsection (8).

(10) A Judge in Chambers may, on an inter partes application by the Supervisor (a) extend the period ofoperation ofthe warrant, for a period

ofsixty days, or such further period, to a maximum period

oftwo years, as the Court may specifY; and

(b) make such other order as the Court considers appropriate

in relation to the operation ofthe order.

(11) A person who hinders or obstructs an authorized officer or any person acting in aid ofsuch officer in the performance ofhis functions Wlder subsection (2) commits an offence. (12) In this section "premises" includes any place and in particular any building, receptacle orvehicle.
PART IV. Restriction on Use o/Certain Words in Name
or Title
17.-(1) In this Part, "restricted words"- Restriction on use of (a) means the words "bank", "banker", "banking", "building certain words society" "deposit taking institution" and "merchant bank'" i~ name or , , IItle. and (b) includes (i) any ofthose words as part ofany other word; (ii) any grammatical variation or derivative ofthe words;

28
Application of Part v.
The Banking Services Act, 2014 [No. ] (m) a translation ofthe words into another language (whether or not the translation ofthose words is
part ofany other word).
(2) Except with the approval, in writing, ofthe Supervisor subject to subsection (3), a person shall not (a) form a company or other body using a name or title that includes a restricted word; (b) change the name or title ofa company or other body to a name or title that includes a restricted word; or (c) can)' on any activity, directly or indirectly, in Jamaica using a name or title that includes a restricted word. (3) Subsection (2) shall not apply to any association formed by deposit taking institutions for the purpose ofrepresenting the common interest of the members of the association or in any case where a restricted word forms part ofthe name ofan individual or place. (4) Subject to subsection (5), the Supervisor may, if he considers it to be in the public interest to do so, by notice in writing, revoke any approval given to any person under subsection (2) and that person shall comply with such notice within the period specified. (5) Before an approval is revoked, the Supervisor shall give the person concerned notice in writing ofthe intended revocation and shall afford that person an opportunity to submit to the Supervisor, a written statement ofobjections to the proposed revocation ofapproval. (6) Any person who contravenes subsection (2) or fails to comply with a notice under subsection (4) commits an offence.
PART V. Licensing ofDeposit Taking Institutions and
Financial Holding Companies
18. This Part shall not apply to
(a) the Bank;
(b) the Jamaica Mortgage Bank;
(c) a ministry, department, Executive Agency or agency of government;

The Banking Services Act, 2014 [No. ] 29 (d) any society registered Wlder the (I) Agricultural Credit Board Act; (n) Co-operative Societies Act; (ill) Friendly Societies Act; or (Iv) Industrial and Provident Societies Act; (e) unless the Supervisory Committe detennines otherwise, a

co-operative arrangement for savings among individuals

limited to a maximum number oftw.enty individuals and in

respect ofwhich the contributions perindividual are paid iIi,

in equal sums and aggregated, and fully paid out to a

participant in the arrangement at agreed intervals;

(f) an insurance company registered Wlder the Insurance Act; (g) pension funds and retirement schemes registered Wlderthe Pensions (Superannuation Funds and Retirement Schemes) Act; and (h) a multilateral body or development bank specified by the

Supervisor, withthe approval ofthe SupervisoryCommittee,

by notice published in the Gazette.

19.-(1) Every company intending to engage in banking business Licence. in Jamaica shall apply to the Supervisory Committee for a licence in one ofthe following categories, that is to say, as (a) a bank; (b) a merchant bank; or (c) a building society. (2) Every company intending to function as a financial holding company shall apply to the Supervisory Committee for a licence. (3) An application to the Supervisory Committee for a licence under this section, shall be made in the prescribed form.

30 [No. J The Banking Services Act, 2014 Matters to be 20. In making a determination on the application, the Supervisory taken into Committee shall have regard to the following matters- account. (a) the licensing requirements and other matters set out in the Third Third Schedule;
Schedule.
(b) the required due diligence and assessment to be undertaken in order to ascertain whether the licensing and other requirements under this Act have been met; and (c) any additional information that is needed for the assessment ofthe application to be supplied by the applicant or any other person. Restriction 21. The Supervisory Committee shall not grant a licence unless the on grant of Committee has had regard to the matters set out in section 20 and is licence. satisfied that each person who, in the opinion ofthe Committee, is or is to be a substantial shareholder, director, officer or key employee (a) is a fit and proper person; and (b) is not a person who is otherwise debarred from directorship, management and key employment under this Act. Grant, refusal 22.-(1) Ifthe Supervisory Committee determines that the applicant or r~vocation has satisfied the licensing and other requirements under this Act, the of hcence. Committee may (a) grant the licence and record the grant ofthe licence in a register; or (b) subject to subsection (3), refuse to grant the licence. (2) Subjectto subsection (3), ifthe Supervisory Committee determines that the applicant has not satisfied the licensing and other requirements under this Act, the Committee shall refuse to grant the licence. (3) Where the Supervisory Committee intends to refuse to grant a licence under this section, the Supervisor shall (a) notifY the applicant in writing ofthe Supervisory Committee's intention to refuse to grant the licence and the reason for the intended refusal; and (b) afford to that applicant an opportunity to be heard.

The Banking Services Act, 2014 [No. J 31 (4) The Supervisory Committee may revoke a licence on the grounds specified in section 112 or for failure ofthe licensee to satisfy the licence condition at section 24(1)( e).
23. A licence is not transferable or assignable. Nontransferability,
etc. of licence.
24.-{1) It shall be a condition ofevery licence that the licensee Licence shall- conditions. (a) forthwith upon the grant ofthe licence, and annually, on or

before each anniversary ofthe grant, while the licence remains

in effect, pay the prescribed fee to the Accountant-General;

(b) obtain coverage pertaining to the protection ofdeposits in

accordance with the Deposit Insurance Act prior to

accepting deposits;

operate a branch inJamaica, notify the Supervisor, in writing

forthwith of
(i) any change ofits principal office in Jamaica; (n) the name ofone ofits senior managers who is to be the company's authorized agent in Jamaica; and (ill) the name of another ofits officers who, in the absence or inability ofthe officer named under sub-paragraph (ii), is to be the company's authorized agent in Jamaica. (d) forthwith upon any change in the persons referred to in

paragraph (c), notify the Supervisor ofthat change; and

(e) commence operation pursuant to the licence within twelve

months ofthe grant ofthe licence or such longer period as

the Supervisory Committee may allow.

(2) The Supervisory Committee may impose conditions on the grant ofa licence as the Supervisor considers necessary and may, from time to time, add, vary or substitute such conditions as are appropriate.

32
Display of licence.
Publication of change of name, etc.
Establishment of
Supervisory
Appeals
Board.
Fourth
Schedule.
The Banking Services Act, 2014 [No. ] (3) The Supervisory Committee may, if it considers it appropriate to do so, cause any condition referred to in subsection (2) to be published. (4) The Supervisory Committee may cause the conditions to be set out in the licence or may otherwise communicate the conditions to the licensee in writing. 25.-(1) A licensee shall display or exhibit a copy ofits licence, certified by the Supervisor in aconspicuous place on eachofits premises where it conducts banking business. (2) A person who contravenes subsection (1) commits an offence. 26.-(1) The Supervisory Committee shall publish or cause to be published by notice in the Gazette (a) the name ofeach company to which a licence is granted; (b) the name ofeach company for which a licence has been revoked; (c) any change ofname ofa licensee; and (d) such other matters relating to licensing as the Supervisory Committee considers appropriate. (2) The Supervisory Committee may publish or cause any condition ofa licence granted under section 22 to be published in the Gazette.
PART VI. Appeal
27.-(1) There is established an appeal tribunal to be known as the Supervisory Appeals Board. (2) The provisions ofthe Fourth Schedule shall have effect as to the constitution ofthe Supervisory Appeals Board and otherwise in relation thereto.

The Banking Services Act, 2014 [No. ] 33 28.--{1) Every person who is aggrieved by a decision of the Appeal to . C . th S . th be £,_...1 Supervisory SUpervlSOry orrumttee or e upervlsor, as e case may ,relCU;U Appeals to in subsection (3) may appeal to the Supervisory Appeals Board by Board. way ofa notice ofappeal within twenty-eight days ofthe date ofthe decision or within such longer period as the Board may, in any special circumstance, allow. (2) The time for the filing of an appeal by a person under subsection (1) shall be calculated from the date ofthe communication, in writing, ofthe decision to the licensee. (3) Subsection (l) shall apply to- (a) any decisionas to whether aperson is a fit and proper person; (b) any objection as to whether an external auditor is an eligible auditor or any decision for removal ofan external auditor; (c) questions ofcompliance with a code ofconduct. (4) The notice ofappeal shall set out clearly the grounds of the appeal and shall be accompanied by copies ofany correspondence, document or statement relevant to the appeal. (5) Acopy ofthe notice ofappeal together with copies ofany correspondence, document or statement shall be served on the Supervisory Appeals Board. (6) The Supervisory Appeals Board shall, within seven days ofthe receipt ofa notice ofappeal under subsection (1), request the Supervisorto finnish the Board and the aggrieved person, withintwentyone days, with a copy of the Supervisory Committee's or the Supervisor's decision, as the case maybe, and the reasons therefor. (7) The Supervisory Appeals Board may order that any book., paper, document or statement, relating to the appeal which is in the possession ofthe Bank or the person aggrieved be produced at the hearing ofthe appeal. (8) The Supervisory Appeals Board shall cause all parties to the appeal to be informed (a) ofthe date ofthe hearing ofthe appeal;

34
Confidentiality requirements for
Supervisory
Appeals
Board,
[No. J The Banking Services Act, 2014 (b) oftheir right to be represented by an attorney-at-law; and (c) that they may summon witnesses in their cause. (9) On hearing an appeal under this section, the Supervisory Appeals Board may (a) dismisstheappeal and confirm the decision ofthe Supervisory Committee or the Supervisor, as the case may be; (b) allow the appeal and set aside the decision; (c) vary the decision; or (d) direct that the matter be referred to the Supervisory Committee, orthe Supervisor, as the case may be, for further considemtion. (10) Subject to subsection (11 ), a decision ofthe Supervisory Committee that is under appeal shall remain in effect until a decision has been rendered on appeal. (11) Where a direction is made under subsection (9)( d), and pending further consideration of the matter by the Supervisory Committee, or the Supervisor, as the case may be, the Supervisory Appeals Board may stay the decision ofthe Supervisory Committee or the Supervisor ifthe Board is satisfied that (a) the stability ofthe financial system will not be adversely affected; (b) the interest ofdepositors will not be prejudiced; and (c) the interest ofthe appellant will suffer irreparable hann ifthe stay is not gmnted. 29.-(1) A member ofthe Supervisory Appeals Board shall not disclose information regarding the operations ofany licensee, or the affairs ofa customer ofa deposit taking institution or foreign bank, obtained in consequence ofthe performance ofits functions under this Act, other than for the purposes ofthis Act. (2) Amember ofthe Supervisory Appeals Board who contravenes subsection (1) commits an offence.

The Banking Services Act, 2014 [No. ] 35
PART VII. Governance ofLicensees
Alteration ofIncorporating Documents 30.--{1) A licensee shall not make any alteration to any of its Restriction incorporating docwnents unless it informs the Supervisor, in writing, on alteration that it proposes to make the alteration and the Supervisor, in writing- ?:corporating decuments. (a) approves the alteration; or (b) does not, within thirty days ofreceipt ofthe notification,

indicate to the licensee, his objection to the alteration.

(2) The Supervisor shall not object to an alteration to the incorporating docwnents ofa licensee unless the alteration is, or is likely to result in, a breach (a) ofa condition ofthe licence; (b) ofthe provisions ofthis Act or any regulations made under

this Act; or

governance or prudent management or operation ofthe

licensee.

(3) Any alteration made to the incorporating docwnents ofa licensee that is registered or incorporated in Jamaica in contravention ofsubsection (1) shall be void. (4) Every licensee shall, within fourteen days ofthe date on which any alteration is made to its incorporating docwnents, notifY the Supervisor ofsuch alterations. (5) Alicensee who contravenes subsection (1) or (4) commits an offence. Board and Management Committees 31.--(1) Every licensee, other than a licensee that is a foreign bank, Board and shall establish appropriate board and management committees to- management committees. (a) oversee the importantaspects ofthe operationofthe licensee; (b) establish due diligence processes (including background

checks) that shall be undertaken for directors, officers and

key employees; and

36
Board of directors.
[No. The Banking Services Act, 2014 (c) maintain the requirement that officers advise the Supervisor on a proactive basis ofany fact that indicates potential or actual challenges to the ability ofthe licensee to meet its obligations. (2) A licensee that is a foreign bank shall establish a board of management or such other governing body, that is satisfactory to the Supervisor, in relation to its branch operations in Jamaica; and the governing body so established shall be required to comply with the provisions ofsubsection (1) in like manner as the board and management committees referred to in that subsection are required to comply. Board ofDirectors 32.-{1) Every licensee, other than a foreign bank, in relation to its branch operations in Jamaica, shall have a board ofdirectors consisting ofnot less than five members which shall include such number of independent directors as is specified in section 34. (2) Inthe case ofa foreign bank, director includes a member ofthe board ofmanagement or such other governing body in relation to its branch operations in Jamaica; and such board ofmanagement or other governing body shall be subject to the governance provisions set out inthis Part. (3) The board ofdirectors, board ofmanagement or such other governing body, shall be comprised ofsuitably qualified and competent directors who, collectively, possess the knowledge, competence and expertise that are required to provide- (a) oversight ofthe management and affairs ofthe licensee's or the group's operations; and (b) effective leadership to ensure that the licensee operates in a prudent manner. (4) Subject to subsection (5), the chairman ofthe board of directors, board ofmanagement or such other governing body ofa licensee shall not be an employee ofllie licensee. (5) Subsection (4) shall not apply to the chairman ofthe board ofdirectors, board ofmanagement or such other governing body established in relation to the branch operations in Jamaica ofa foreign bank.

The Banking Services Act, 2014 Ll'4U. J
33. Every licensee or the board ofmanagement or such other Policies.
governing body established in relation to the branch operations ofa foreign bank in Jamaica shall ensure that (a) the policies ofthe licensee are updated at regular intervals; (b) policies and procedures (including rules and procedures governing due diligence procedures and promotinghigh ethical and professional standards) designed to prevent or minimize the use of their services, whether intentionally or unintentionally, for criminal activities are established and meet the standards required by applicable laws; (c) appropriate and adequate record keeping systems, including records offmdings and corporate decisions, are maintained; (d) a person does not undertake activities or hold dual or multiple positions within the financial group that may create an actual or potential conflict ofinterest except in such extraordinary circumstances and on such terms, as the Supervisor may approve; and (e) any transaction between a licensee and a connected person is at commercial ann's length pricing and terms.
34. The number ofindependent directors appointed to the board of Independent
directors ofa licensee shall not be less than one-third ofthe membership directors. of the Board or such other fraction as may be prescribed by the Supervisory Rules.
35. -(1) An indi vidual shall not hold the positions ofchairman of Separation of
the board and chief executive officer ofa licensee contemporaneously. pos~tions of chaIrman and (2) Subsection (1) shall not apply to the branch operations of chief . I: • bank' J . executive a lorelgn m amruca. officer. General Provisions re Governance
36. Every director, officer and key employee ofa licensee shall, in Duty of care.
the discharge ofhis functions
(a) act honestlyand ingood faith inthe best interestofthe licensee

and for the protection ofdepositors' funds; and

(b) exercise the care, diligence and skill thatareasonably prudent

director, officer or key employee would exercise in similar

circumstances.

38
Duty to undertake fit and proper assessments.
Persons debarred from directorship, management and key employment. [No. J The Banking Services Act, 2014 37.-{1) Every licensee shall ensure thateach substantial shareholder, director, officerand key employee is and remains afit and properperson. (2) Afinancial holding company shall ensure that all members ofany financial group that it heads complywith the obligation set out in subsection (l). (3) Subject to subsection (4), any licensee which contravenes subsection (1) or (2) commits an offence. (4) It shall be a defence to a licensee charged under subsection (3) to prove that the licensee took all reasonable steps in the circumstances to prevent a contravention ofsubsection (1) or (2). 38.-{1) A person to whom this section applies shall not, without the express authorization in writing ofthe Supervisor or the approval of the Supervisory Committee, act or continue to act, as a director of, or be concerned, directly or indirectly, in the management or key fimctions ofany licensee. (2) Subsection (1) applies to any person who (a) is not a fit and proper person; or (b) whether in Jamaica or elsewhere, has been a director of, or directly concerned in the management of, or fimctioned as a key employee in a licensee, or any other entity offering financial services or functioning as a financial holding company (1) which has been wound up by a court; (n) the licence ofwhich has been revoked, unless the revocation was consequent upon (A) the amalgamation ofthat licensee with another licensee; or (B) a voluntary winding up ofthe licensee in compliance with section 107; (ill) whichhas been in receivership; (iv) which has entered into a composition with its creditors;

The Banking Services Act, 2014 [No. ] 39 (v) whose business has been conducted imprudently or fraudulently; or (vi) which has failed to meet the solvencyrequirements prescribed by law. (3) A person who contravenes subsection (1) commits an offence. 39.-(1) Every licensee shall immediately notify the Supervisor, in Duty to writing of.- n~ti~y dISmissals, (a) any matter that could materially affect the financial viability etc. or the reputation ofthe licensee or the financial group; (b) any fraud or criminal activity committed by or against the

licensee or any other member ofthe fmancial group;

employee and the reasons for the dismissal or resignation;

(d) any circwnstances that render any director, officer, substantial

shareholder or key employee unfit to hold office and advise

on the action that is being taken with regard to that matter;

(e) any emerging factor that affects whether a director, officer,

substantial shareholder, or key employee is a fit and proper

person.

(2) A licensee who contravenes subsection (1) commits an offence. (3) Every licensee shall give prior notice in writing to the Supervisor, of. (a) any transaction involving the sale or purchase ofloans for a

price, orofavalue, exceeding, individually orinthe aggregate,

five per centum ofthe capital base ofthe licensee; or

(b) its intention to appoint or terminate the appointment ofan

external auditor.

(4) Subsection (3)(b) shall not apply to the renewal ofthe appointment ofan external auditor. t.

40
Capital base.
Third
Schedule.
Statutory reserve fund.
[No. ] The Banking Services Act, 2014 (5) A licensee shall not implement any major changes in existing operations, strategy or policy without first obtaining the written approval ofthe Supervisor. (6) A licensee shall, in relation to the termination of the appointment ofan external auditor, comply with section 95(2).
PART VIII. Capital and Reserves
40.-{1) Every applicant for a licence to operate as a deposit taking institution shall meet the minimum start-up capital requirement specified in Part B ofthe Third Schedule. (2) Every licensee shall, as determined in such manner and by such methods as maybe prescribed, at all times, maintain a regulatory capital sufficient to satisfY the prescribed capital requirements and to adequately support its operations. (3) Every deposit taking institutionshall establishandmaintain a statutory reserve fund pursuant to section 41. (4) Without prejudice to the obligation ofan entity in the group to hold sufficient capital to meet its respective regulatory requirements, a financial holding company shall maintain at all times on a consolidated basis aggregate regulatory group capital determined in such manner and by such methods as may be prescribed. 41.-{1) Every deposit taking institution, other than a foreign bank, shall maintain a reserve fund in Jamaica into which, at the end ofeach financial year, there shall be transferred (a) fifteen per centum ofthe net profits ofthe institution earned in that year until the reserve equals fifty per centum ofits paid-up capital; and (b) thereafter, ten per centum ofthe net profits ofthe institution earned in that year until the amount at the creditofthe reserve fund is equal to the paid-up capital ofthe institution. (2) Every foreign bank shall maintaina reserve fund in relation to its branch operations in Jamaica into which, atthe end of~hfinancial year, there shall be transferred (a) fifteenper centum ofnet profits earned in that year from its branch operations in Jamaica until the reserve equals fifty per centum ofits assigned capital; and

The Banking Services ACI, 2014 [No. J 41 (b) thereafter ten per centum ofthe net profits earned in that year from its branch operations in Jamaica tultil the amotult at the credit ofthe reserve fimd is equal to the assigned capital ofthe foreign bank, and the reserve fund shall consist of tulencumbered assets that are specifically and exclusively assigned by the foreign bank to the financing ofits branch operations in Jamaica and are not available to fmance any other operation ofthe foreign bank. (3) Nothing in subsection (1) or (2) shall prevent a deposit taking institution or a foreign bank in relation to its branch operations in Jamaicafrom (a) transferring more than the prescribed percentage ofthe net profits in any year to its reserve fund; or (b) maintaining a reserve fimd in an amotult in excess ofits paidup capital or its assigned capital, as the case may be. (4) For the purposes ofthis section, references to paid-up capital shall, in relation to building societies, mean the total amotult paid-up on their capital share and permanent capital fund, as the case maybe. (5) For the purposes ofthis section, "net profits" means profits after the deduction ofincome tax, but shall not include (a) any lUlrea.lized surplus arising from a revaluation ofthe assets ofthe deposit taking institution, otherthan foreign currency; (b) profits arising from- (i) a sale ofthe assets ofthe deposit taking institution to a connected person, where the sale is not for cash or is ftulded in whole or in part by a loan from the institutionor anotherentitywithin the same financial group; or (n) any resale, other than for cash, by the deposit taking institution of assets purchased from a connected person; or

42 [No. ] The Banking Services Act, 1014 (c) any profit or gain, whether resulting from an artificial or fictitious transaction or otherwise, that the Supervisor is satisfied does not infact result in an increase to the net capital position ofthe deposit taking institution, so, however, that the Supervisor may, in writing, pennit profitsreferred to in paragraph (b) to be treated as net profits for the purposes ofthis
section.
(6) The deposittaking institution shall act in accordance with subsection (7), where (a) the amount at the credit ofthe reserve fund ofthe deposit taking institution exceeds its paid-up capital or assigned capital; and (b) the deposit taking institution intends to reduce its reserve fund. (7) The deposit taking institutionshall, in writing (a) notify the Supervisor; and (b) apply, in writing, to the Supervisor for pennission to reduce its reserve fund (8) The Supervisormay permit the deposit taking institution to reduce its reserve fund by an amount not exceeding the amount of the excess referred to in subsection (6) (a). (9) Thereduction referred to in subsection(8) maybe effected by the deposit taking institution issuing bonus shares, redeemable preference shares or both. Retained 42.-(1) A licensee may establish a retained earnings reserve into earnings . which portions ofits net profits are transferred as the licensee may reserve. detennine. (2) Where a licensee has established a retained earnings reserve, the reserve shall not be reduced except with the prior approval in writingofthe Supervisor.

The Banking Services Act, 2014 [No. 43
PART IX. Cash Reserves and Liquidity Requirements
43. Every deposit taking institution shall maintain in the fonn ofa Cash
reserves. deposit with the Bank the cash reserve specified under section 28 of the BankofJamaica Act; and ifit fails to do so, it shall pay interest in accordance with that section,
44. Every deposit taking institution shall comply with the liquid Liquid asset
requirements. asset requirements specified under section 29 ofthe BankofJamaica Act; and ifit fails to do so, it shall pay interestin accordance with that
section.
45.-(1) The licensee shall comply with the prudential liquidity Prudential , 'fied' th S . Rul liquidity reqwrement specl m e UpervlSOry es. requirements. (2) Alicensee that fails to comply with subsection(1) commits an offence and is liable to the penalties specified in the Supervisory Rules.
PART X. Fixed Assets
46.-(1) Subjecttosection47, the fixed assets ofadeposit taking Limit on fixed assets. institution shall not, without the approval, in writing, ofthe Supervisor and subject to such conditions as the Supervisor may specify, exceed an amount equivalent to such percentage ofits capital base as may be prescribed. (2) In subsection (1), "fixed assets" (a) means the following assets, whether freehold or leasehold,

owned by a deposit taking institution- (I) furniture andfixtures; (Ii) premises and other real estate; (IiI) machinery and equipment, including motor· vehicles;

44
Valuation df fixed assets.
Restriction on periods of deposits by merchant bank. Restriction on engaging in trade or business. [No. ] The Banking Services Act, 2014 (iv) softwares and otherintangible assets as may be prescribed; but (b) subject to section 50, does not include real property acquired in satisfaction ofdebt or by way offoreclosure which is to be disposed ofwithin the time required by section 53.
47. For the purposes ofdetermining compliance with section 46(1),
; the historical cost method shall be applied in the valuation offixed assets.
PART XI. Restricted, Prohibited and Permitted
Activities ofLicensees
Restricted and Prohibited Activities 48.-(1) Subject to subsection (2), a merchant bank shall not (a) accept a deposit upon tenns that it is repayable on demand or in less than fourteen days by cheque, draft or order drawn on the merchant bank, or in any other manner and shall so inform the depositor at the time when the deposit is made; (b) without the written permission ofthe Supervisor, repay any deposit within less than fourteen days from the date on which the deposit was received by the merchant bank. (2) Subsection (l) shall not apply to deposits taken from other deposit taking institutions . .(3) Amerchant bank that contravenes subsection (1) commits an offence. 49.-(1) A deposit taking institution shall not engage in any trade or other business, except (a) in satisfaction ofdebts due to the institution; (b) the due performance ofits functions as a trustee, an executor, an administrator or as the lawful attorney ofany person; and (c) otherwise as may be necessary in the ordinaty course ofits banking business, including the satisfaction ofdebt due to the institution

The Banking Service!; Act, 20J4 [No. ] 45 (2) Notwithstanding the provisions ofsubsection (1), the Supervisor may, upon an application in writing by a deposit taking institution, exempt a deposit taking institution from the operation of subsection (1) in orderto facilitate joint marketing, co-branding or the offer oflocation services. (3) A deposit taking institution that contravenes subsection (1) commits an offence. 50.-(1) Adeposit taking institution shall not acquire fixed assets, except (a) as may be necessary for the purpose ofengaging in banking business, housing its officers or employees orto facilitate any ancillary activities as a corporate citizen; (b) for the due performance of its functions as a trustee, an executor, an administrator or as the lawful attorney ofany person; or (c) otherwise as may be necessary in the ordinary course ofits . banking business, including the satisfaction ofdebt due to the institution. (2) A deposit taking institution that contravenes subsection (1) commits an offence. 51.-(1) Alicensee shall 1;1ot acquire, deal inorgrant, credit facilities on the security ofits own shares or the shares ofany other company withinthe group (a) except in the circumstances permitted by section 185 ofthe Companies Act; and (b) unless a special reserve is set aside, in the manner specified by the Supervisor by notice published in the Gazette, to Restriction on acquisition of fixed assets. Restriction on grant of credit facility on secufity of own shares. etc. fund in full any transaction and to cover anypotentiaJ. .

46 [No. ] The Banking Services Act. 2(114 diminution in capital that may result from any share buyback or redemption in connection therewith. (2) Subsection(l) (a) shall not apply to the financing ofshares purchased in an employee share ownership plan approved under the Employees Share Ownership Plan Act; and (b) shall applyto shares made available to an officer as part ofa compensation scheme. (3) A licensee that contravenes subsection (1) commits an offence. Restriction 52.-(1) A licensee shall not pay any dividend on its own shares on payment of dividends (a) subject to subsection (2), until all its capitalized expenditure on own shares. not represented by tangible assets and all prior losses have been written off completely; (b) ifcapital has been statutorily impaired, until the impainnent has been corrected; (c) if, having regard to the licensee's financial condition and performance, it would be, in the opinion ofthe licensee, imprudent to do so; (d) ifthe Supervisor has issued a notice to the licensee under subsection (2); (e) until the requirements ofthis Act relating to the statutory reserves set out in section 41 have been met; or (f) until the sums due and payable to the Bank by the deposit taking institution have been paid. (2) The Supervisor may, by notice published in the Gazette, subject to such conditions, ifany, as may be specified in the notice, direct that the capitalized expenditure to which subsection (I)(a) relates, shall not include expenditure for the purchase ofgoodwill.

The Banking Services Act, 2014 [No. J 47 (3) If the Supervisor considers that having regard to the li<;ensee's financial condition and perfonnance it would be imprudent to pay any dividend on its shares, the Supervisor may issue a notice of prohibition to the licensee prohibiting such payment and the licensee shall comply with the notice ofprohibition. (4) A licensee that contravenes subsection (1) or (3) commits an offence. (5) In this section, a reference to "capitalized expenditure not represented by tangible assets" includes a reference to preliminaIy expenses, organizational expenses, share selling commission and brokerage. 53.-(1) Subjectto subsection (3), a deposit taking institution shall not hold in fee simple, or cause any other person to hold in fee simple for its benefit, any land acquired in the course ofsatisfaction ofdebts due to the institution or by way offoreclQsure for more than three years from the date ofthe acquisition. (2) A deposittaking institutionthat holds land in contravention ofsubsection (1) shall, forthwith, sell or otherwise dispose ofthe land absolutely so that the deposit taking institution no longer has, either directly or indirectly, any interest or control in respect thereof, except by way ofsecurity. (3) Upon receipt in writing ofan application from the deposit taking institution, the Supervisor may, in writing, direct that the time specified in subsection (1) be extended for such further period as the Supervisor may allow. (4) A deposit taking institution that contravenes subsection (1) commits an offence. 54.-(1) Except in accordance with regulations made under section 131 or 132, a deposit taking institution shall not (a) manage or invest funds on behalf ofits customers, unless the investment is carried out under a trust operated within the parameters specified by the Supervisor; or Restriction on beneficially bolding land in fee simple. Restriction ~:nagement or investment of customers' funds.

48 [No. The Banking Services Act, 2014 (b) engage in proprietary trading in securities for its own account. (2) A deposit taking institution that contravenes subsection (1) commits an offence. Permitted Activities 55.--'-(1) Subject to subsection (3), a licensee that proposes to Permitted activities. engage in any matter described in subsection (2) shall, prior to doing so- (a) notify the Supervisorofits intention to do so; and (b) furnish to the Supervisor such information as may be prescribed. (2) The matters referred to in subsection (l) are (a) new businesses or products; (b) new delivery channels for existing businesses or products; (c) strategic alliances; (d) joint ventures; (e) co-branding initiatives; and (f) any other matter in relation to which the Supervisor determines that prior notification is required. (3) The licensee may engage in any matter described in subsection (2) if. (a) the Supervisor indicates, in writing, that he does not object; or (b) the Supervisor does not object within thirty days ofthe date on which the notification was made under subsection (1) (a). (4) A licensee that contravenes subsection (1) commits an offence.

The Banking Services Act, 2014 [No. ] 49
PART XII, Counter party Exposure Limits
56. The provisions ofthis Part shall apply to- Application
ofPart XII.
(a) a deposit taking institution on a stand alone basis and on

a consolidated basis; and

(b) a financial holding company on a consolidated basis. 57.-(1) Subject to subsection (2), and unless otherwise ~estri~tionon approved by the Supervisor, a licensee shall not incur counterparty ::u::arty exposures to- exposures. (a) any connected person in excess often per centum ofits

capital base; or

(b) all connected persons in the aggregate exceeding twenty

per centum of its capital base.

(2) Subsection (1)(b) shall not apply to a fmancial holding company in relation to support activities for its subsidiaries. (3) A licensee shall not incur unsecured counterparty exposures to any connected person, except in relation to (a) specified counterparty exposures; (b) persons referred to in section 58; or (c) equity exposures referred to in section 60. (4) A licensee that contravenes subsection (1) or (3) commits an offence. 58.-(1) A deposit taking institution shall not grant or incur Restriction on unsecured credit facilities to- grant of d unsecure ( ) an In. d'IV!'dual Wh0 IS . a connecte d person, 0 ther than an credit a facilities. officer and an employee, in excess ofan amount equivalent to fifty per centum of one year's salary of the chief executive officer; or (b) any officer or employee ofthe licensee or any immediate

relative of such officer or employee, in excess of an

amount equivalent to one year's salary ofthe officer or

employee.

50 [No. ] The Banking Services Act, 2Q14 (2) Facilities extended under subsection (1) (a) shall be subject to the lending limit that a deposit taking institution can extend to all connected persons under section 57(1) (b). (3) A financial holding company shall not grant unsecured credit facilities to any connected person who is an individual. (4) Any exposures arising from the activities ofnon-deposit taking institution subsidiaries shall be subject to the aggregate exposure limits ofthe fmancial holding company specified in section 59(1)(b). (5) A licensee that contravenes subsection (1) commits an offence. Restriction on 59.-(1) Except in relation to specified counterparty exposures aggregate or an exposure of thirty days or less between deposit taking counterparty exposures. institutions, a licensee shall not, directly or indirectly. incur a counterparty exposure to (a) a person, in an aggregate amount exceeding twenty per centum of the licensee's capital base so, however, that any unsecured portion shall not in the aggregate exceed five per centum ofthe licensee's capital base; or (b) a counterparty group, in an aggregate amount exceeding forty per centum of the licensee's capital base, so, however, that the unsecured portions shall not in the aggregate exceed ten per centum ofthe licensee's capital base. (2) A licensee that contravenes subsection (1) commits an offence. (3) In this section, "specified counterparty exposures" . means exposures that are- (a) credit facilities made to or fully guaranteed by the Government ofJamaica; (b) comprised ofsecurities that are issued orfully guaranteed by the Bank;

The Banking Services Act, 2014 [No. ] 51 (c) credit facilities that are fully collateralized by securities

issued or guaranteed by the Government of Jamaica or

the Bank.;

(d) reverse repurchase arrangements where the underlying

securities are issued by the Government of Jamaica or

the Bank;

(e) comprised ofsecurities that are issued or fully guaranteed

by a sovereign state (including any territory which the

Supervisory Committee deems to be equivalent for this

purpose) with an investment grade rating issued by a

credit rating agency approved by the Supervisory

Committee and the guarantee is explicit, unconditional,

legally enforceable and irrevocable over the life of the

credit exposure in question; or

(f) credit facilities that are fully secured by cash. 60.--(1) A deposit taking institution's equity holdings in other Restriction on companies or undertakings, directly or indirectly, shall not exceed holdin~ in in the aggregate fifty per centum ofthe institution's capital base so, compames. however, that (a) in respect ofa company or undertaking, the holding shall

not exceed ten per centum ofthe institution's capital base;

and

(b) the restrictions imposed by this subsection shall not apply

where the holding is acquired in the administration ofthe

estate ofa deceased person or pursuant to an underwriting

arrangement or in the course ofthe satisfaction ofdebts

due to the institution, but the holding shall be disposed of

within three years ofthe date ofacquisition or such longer

period as the Supervisor may, in writing. permit.

(2) A licensee that contravenes subsection (1) commits an offence. 61.--(1) Within three months of the commencement date, a Duty to notify licensee shall notifY the Supervisor of.- Supervisor on counterparty (a) all counterparty exposures which are in,excess of the exposures. limits specified in this Part; and

52
Modification etc., of counterparty exposure limits. Counterparty exposures outside of the limil [No. The Banking Services Act, 2014 (b) the measures that the licensee shall take in order to (i) reduce, within a period of two years or such longer period as the Supervisor may determine. in writing, the excess counterparty exposures granted so that they are within the limits specified in this Part; or (ii) provide within a period oftwo years, or such longer period as the Supervisor may determine, additional capital in accordance with the capital adequacy requirements under this Act, so as to eliminate the excess. (2) A licensee who contravenes subsection (1) commits an offence. 62.-{1) Any modification of, addition to, or renewal or extension of, a counterparty exposure shall be subject to the limits imposed by this Part. (2) The Supervisory Rules may prescribe the method of valuing counterparty exposures for the purpose of determining compliance with the limits established under this Part. 63.-(1) The provisions of this section shall apply notwithstanding anything to the contrary in this Part. (2) The Supervisory Committee may, on a temporary basis, approve an exposure in excess ofthe counterparty limits specified in this Part by a licensee to its subsidiary which is in need ofsupport (whether in the form of unsecured lending or capital support or otherwise) in order to address emergencies, if the Supervisory Committee is satisfied as to the likelihood of recovery of the subsidiary and that the licensee can adequately 8!1d prudently sustain the exposures. (3) The Supervisory Committee may permit a licensee to incur exposures that are above the counterparty limits specified in this Part, provided that the excess over the limit is guaranteed or otherwise secured by a company offering financial services that is

The Banking Services Act. 2014 [No. 1 53 regulated and subject to capital adequacy requirements under this Act and counterparty exposure limits that the Supervisory Committee considers to be equivalent to those applicable to the licensee ifthe Supervisor is satisfied that (a) the arrangement will be subject to tenns and conditions

that will adequately protect the licensee; and

(b) the financial strength ofthe company is adequate for this

purpose.

PART XIII. Supervision and Examination ofLicensee
64.-(1) In addition to his functions under this Act or any other Supervisor's . hall general enactment, the Supervlsor s - powers of . I' . b . b f if. supervision ( ) a morutor lcensees on an on-gomg aslS, y means 0 0 - and site and on-site examinations to assess- e,xamination of , licensees. (i) compliance by individual licensees with the provisions of this Act, any regulations made under this Act or any other enactment; (ii) the safety and soundness ofindividual licensees and the deposit taking system; and (iii) risks across the group pursuant to the consolidated supervision ofthe financial group; (b) require, or recommend to the Supervisory Committee,

timely and appropriate corrective action to be taken by

licensees when deficiencies or breaches are identified;

Supervisory Committee the imposition of, sanctions for

identified breaches of the provisions of this Act, any

regulations made under this Act or any directions issued

by the Supervisor under this Act;

(d) provide, at least on an annual basis, a comprehensive

report to the board and management ofeach licensee on

the results and fmdings from on-going monitoring ofthat

licensee, including requirements for remedial action to

be taken within given timelines;

54
Supervisor may require information.
The Banking Services Act, 2014 [No.
(e) ativise the Supervisory Committee and the Minister on risks across the supervised system and on the supervisory response to emerging risks across the system; (f) publish fmancial information on individual licensees and the supervised system in such format and frequency as he may determine. (g) publish on an annual basis (i) statistics on customer complaints; (ii) information reported by licensees on fees and charges; (iii) complaints referred to the Supervisor in relation to a code conduct, so, however, that no information in respect ofthe affairs of a particular customer of a deposit taking institution shall be published. (2) In undertaking any ofthe functions under subsection (1) (a), the Supervisor may determine the frequency and scope of the examinations according to the risk profile and systemic importance ofthe licensee and any matters that may be unique to the licensee. 65.-(1) The Supervisor may require any company which is a member ofa group ofwhich the licensee is a member to submit to the Supervisor, such information relating to the operations ofthat company, as the Supervisor considers necessary for the effective supervision of the licensee or the financial group of which the licensee is a member. (2) The infQI1l1ation referred to in subsection (1) may be required for the purpose ofdetermining (a) the effect ofthe group's or those entities' operations on the licensee; (b) whether a member ofthe group is obtaining financing or other benefit, whether directly or indirectly from the licensee;

The Banking Services Act, 2014 [No. ] 55 (c) the general risks posed to the licensee from operations ofthe members ofthe group; (d) the risk management capabilities ofthe group as a whole; (e) whether the internal audit facilities within the group have the capability to scrutinize transactions undertaken or proposed to be undertaken by the management ofthe group or a company within the group so as to determine whether there are associated risks; or (f) the adequacy ofthe corporate governance arrangements

for the group.

(3) The Supervisor may summon any director, officer, key employee or substantial shareholder ofthe licensee or member of the financial group for the purpose of obtaining information; and the director, officer, key employee or substantial shareholder ofthe licensee or member ofthe financial group shall comply therewith, (4) A company who refuses to furnish information required under subsection (1) commits an offence. (5) A director, officer, key employee or substantial shareholder of a licensee who refuses to obey a summons under subsection (3) commits an offence, (6) Where the Supervisor:: proposes to exercise power under this section in relation to a company that is regulated by another regulator, the Supervisor shall consult with that regulator before exercising those powers. 66.-(1) Without prejudice to the provisions ofsection 65, the Obligation of Supervisor may, by instrument in writing, require an officer ofthe Officer. to I' I 'thi h' b'fi d' th sUPP Y lcensee to supp y, WI n suc time as may e speci Ie In e information. instrument, such information relating to the financial position ofthe licensee and its subsidiaries and in the case of a deposit taking institution, including that ofits branch operations and subsidiaries, wherever located, as may be specified, (2) A person who fails to comply with the requirements set out in an instrument under subsection (1) or who, in response to that instrument, knowingly or wilfully supplies false information to the Supervisor contrary to subsection (1) commits an offence.

56 [No. ] The Banking Services Act, 2014 (3) The chief executive officer or other officer ofa licensee which is, or is likely to become, unable to meet its obligations shall, without prejudice to any obligation imposed under subsection (1), forthwith inform the Supervisor, in writing, of the financial position ofthe licensee. Powers of 67.-{1) For the purposes of this Act, an authorized officer inspection. shall be entitled (a) at all reasonable times and as may be reasonably required for the performance ofhis functions, to have access to, inspect or examine, all the books, accounts, records, cheques, securities or other document or relevant information whether stored physically or electronically (in this section referred to as "relevant documents")- (i) of a licensee or of any other entity within the same financial group ofwhich the licensee is a member; (ii) that relate to the operations ofthe licensee or of any other entity within the same financial group ofwhich the licensee is a member; or (iii) in the possession or control of any director, officer or employee of any licensee or any former director, officer, employee or external auditor, ofthe licensee or of any other entity within the same financial group of which the licensee is a member; or (b) to require any director, officer, employee or external auditor, or former director, officer, employee or external auditor ofthe licensee or of any other entity within the same fmancial group ofwhich the licensee is a member, to furnish such information or to produce such relevant documents as are in his possession or control.

The Banking Services Act, 2014 [No. ] 57 (2) A person commits an offence ifhe (a) fails to comply with a requirement made under subsection

(l)(b);

(b) wilfully attempts to mislead or makes any false statement

with intent to mislead any person in the execution ofhis

duties under this Act; or

any person in the execution ofhis duties under this Act.

PART XIV. Supervision ofFinancial Groups
68. In this Part, "consolidated supervision", in relation to a Definitionof
financial group, means-- "consolidated supervision" . (a) the supervision ofthe financial group on a consolidated

basis;

(b) the effective supervision of every licensee within the

fmancial group; and

conglomerate, the comprehensive review ofthe activities

within the fmancial group.

69.-{1) A financial holding company shall be established and Financial consolidated supervision shall apply where- :r:::rship (a) two or more fmancial institutions operating in Jamaica structure. are members ofthe financial group and one ofthem is a deposit taking institution; (b) a deposit taking institution operating in Jamaica is a

member ofthe fmancial group and has holdings, whether

branch or subsidiary, or has control ofcompanies, outside

ofJamaica; and

holding company but has holdings. whether branch or

subsidiary, or has control of companies outside of

Jamaica.

58 [No. ] The Banking Services Act, 2014 (2) The fInancial holding company shall hold the deposit taking institution and all financial institutions in the group subject to sections 70 and 75. (3) Subject to sections 73 and 74, where a financial group is a mixed conglomerate, a financial holding company shall be the immediate subsidiary ofthe ultimate holding company of the group, or if the Supervisor so approves, in writing, a subsidiary of the ultimate parent holding company acceptable to the Supervisor. (4) Where a deposit taking institution is the sole financial institution within a group, that institution shall be held directly by the ultimate holding company for the group or, ifthe Supervisor so approves, in writing, a subsidiary ofthe ultimate holding company that is acceptable to the Supervisor. (5) Subject to subsection (6), the Supervisor may permit, in writing, anownership structure that does not fall within subsection (1) or (3) where compliance cannot be facilitated or accommodated immediately. (6) Permission under subsection (5) shall specify the time (being a period not exceeding twenty-four months from the date of the permission) within which the structure shall comply with the provisions ofsubsection (1) or (2). . (7) In determining whether an approval or permission should be granted under this section, the Supervisor shall take into consideration whether (a) consolidated supervision will be impeded; and (b) the intended structure will have an adverse impact on a licensee's ability to comply with its other obligations under this Act. (8) Where a fmancial group does not have a fmancial holding company that complies with this Act, the Supervisory Committee may allow such time as it considers appropriate for a fmancial holding company of a financial group to be established and licensed in accordance with this Act.

The Banking Services Act, 2014 [No. ] S9 70.-(1) Ownership structures ofand within a financial group Prohibited which, in the opinion ofthe Supervisory Committee, may impede °strWDcter5hip u utes. consolidated supervision or effective supervision of each of the licensees within the financial group are prohibited. (2) Ownership structures referred to in subsection (1) include (a) structures that are opaque or present an obstacle to

consolidated supervision or effective supervision ofthe

group and each company within the financial group;

(b) structures that include establishments injurisdictions with

laws that hinder consolidated supervision or effective

supervision; or

within a group where the deposit taking institution

operates as a branch of a foreign bank while the other

financial services are offered in Jamaica through

subsidiaries.

71.-(1) A licensee shall take such measures as are prescribed Risk related to 'd'fy d financial to proper I y 1 enti ,assess an manage aroup (a) the relationship among the companies in a financial group; structure. (b) the risks among members of a financial group and the

wider group in the case ofa mixed conglomerate; and

financial group.

(2) Where a licensee, or any other member ofthe group ofwhich the licensee is a member, has a relationship with a person that is not a member of the group which, in the opinion of the Supervisory Committee, poses a risk to the licensee or the financial group, the Supervisory Committee may (a) treat the person as a member ofthe group for the purpose

ofsuch Parts of this Act as the Supervisory Committee

may determine; or

60 [No.. ] The Banking Services Act. 2014 (b) require the licensee to tenninate the relationship or cause the relationship to be terminated. (3) A licensee that fails to comply with subsection (1) commits an offence. (4) The Supervisor may (a) examine and inspect the books ofthe financial holding company and any other company which is a subsidiary of the financial holding company and any subsidiary ofthat other company; (b) require an officer ofany member ofthe group or mixed conglomerate to provide information concerning its operations, so as to ascertain the likely effects of such operations on the licensee; (c) review changes in the ownership, directors and officers ofthe financial holding company and determine whether those persons are fit and proper persons. (5) The Supervisor may issue such directions to a deposit taking institution or its financial holding company as the Supervisor considers appropriate to (a) control and manage risks in and throughout the financial group; and (b) preserve the stability ofthe financial group. (6) The directions referred to in subsection (5) may include- (a) capital requirements, including market risks on a groupwide basis; (b) limits on (i) large exposures; (ii) intra-group transactions;

The Banking Services Act, 2014 [No. ] 61 (iii) holdings in any regulated or supervised financial institution. (7) A licensee which fails to comply with directions under

this section commits an offence.

(8) Where the Supervisor proposes to exercise powers

under subsection (4) or (5) in relation to a company that is regulated

by another regulator, the Supervisor shall consult with that regulator

before exercising those powers.

72.--(1) Where a deposit taking institution is held within a Restructuring group StruCture that is not approved in accordance with section 69, of a group.

the Supervisor may, in writing, require the financial holding company

or, ifthat is not practicable, the deposit taking institution to undertake

a restructuring so that the group structure is in compliance with the

requirements ofsection 69.

(2) A restructuring under subsection (1) shall be carried

out within twelve months of the date of the requirement by the

Supervisor, so, however, that the Supervisor may extend the period

by notice, in writing to the licensee.

(3) A financial holding company or a deposit taking

institution that wilfully refuses to comply with a requirement by the

Supervisor under subsection (1) commits an offence.

73.-(1) Subject to subsection (2), a licensee may only own a Ownership of . subsidiary which is a financial institution. :~~~;aries, . licensees. (2) The Supervisory Committee may approve the ownership

of a company by a licensee which is not a financial institution, if

the business ofthat company is the provision ofnecessary support

services to the licensee or to the financial group.

(3) Where a subsidiary ofa financial holding company is

registered under the Industrial and Provident Societies Act, the

financial group shall be restructured so that the subsidiary is directly

held by a deposit taking institution in the financial group.

62
Restriction on financial holding company.
Responsibilities offmancial holding company.
[No. ] The Banking Services Act, 2014
PART XV. Obligations Specific to Financial
Holding Companies
74.-(1) Subject to subsection (2), a financial holding company shall not carry on any operation or engage in any business other than the responsibilities set out in section 75, and such other business as the Supervisor accepts as being ancillary to its role as a financial holding company. (2) Subsection (1) shall not apply to a deposit taking institution that, with the approval of the Supervisory Committee, carries on any operation or engages in any business as a financial holding company ifthe deposit taking institution is able to satisfY the Supervisory Committee that it can comply with the provisions of this Act, any regulations made under this Act and any other enactment that applies to a financial holding company. (3) Where a deposit taking institution functions as a financial holding company, the deposit taking institution shall remain fuliy subject to the statutory and prudential obligations as a deposit taking institution set out in this Act, any regulations made under this Act, or any other enactment. 75.-(1) A financial holding company shall (a) ensure that adequate capital and other financial resources are maintained for the operations ofthe financial group that it heads; (b) manage the risks to the viability of the financial group and comply with reporting and other prudential requirements; (c) ensure compliance by the financial group (i) with the provisions of this Act and any regulations made under this Act; (ii) with the conditions of any licence held by a member of the financial group and issued pursuant to this Act or any enactment which regulates their operation;

The Banking Services Act, 2014 [No. ] 63 (iii) with the enactments which regulate their operations; (iv) with any directions issued by the Supervisor to any member ofthe financial group; and (v) with any decisions issued by any other regulator concerning any member ofthe financial group; (d) ensure that it submits all financial statements and further

data on its, and the financial group's, behalf, as the

Supervisor may require;

(e) not hold any assets that are not necessary for the

performance of its role as a holding company of the

financial group;

(f) maintain appropriate policies and procedures for intra

group transactions and group risk management to ensure

prudent dealings and exposure limits in the financial

group;

(g) ensure compliance with disclosure requirements that are

applicable to .entities within the financial group;

(h) provide the Supervisor with all reports and returns

required under this Act;

(i) notify the Supervisor ofany events or circumstances that

affect or could affect the stability ofthe financial group;

and
G) ensure compliance with any requirement under this Act

and any regulations made under this Act that the directors,

officers, substantial shareholders and key employees of

the financial holding company and other institutions in

the financial group are fit and proper persons.

(2) A financial holding company shall grant the Supervisor unimpeded access to its books, records, documents and other relevant information.

64
Restriction on holdings in licensee by foreign government. Substantial shareholding in licensee. [No. ] The Banking Services Act, 20/4 (3) The directors and officers of financial holding companies shall comply with any summons received from the Supervisor. (4) A director or an officer ofa financial holding company who fails to comply with any summons received from the Supervisor commits an offence.
PART XVI. Regulation ofShare holding and Controlling
Interests in Licensee
76. Except with the written approval of the Supervisory
Committee, a foreign government or an agency of a foreign government, shall not, directly or indirectly, in relation to a licensee (a) hold more than five per centum ofthe issued share capital of that licensee or such higher percentage as the Supervisory Committee, may approve; or (b) exercise any voting power in excess of the percentage specified in paragraph (a). 77.-(1) Where any person enters into an agreement or ai:rangement to acquire shares by virtue ofwhich the person would, if the agreement or arrangement is carried out, be a substantial shareholder ofthe licensee, the agreement or arrangement (a) shall be subject, on application by the person, to the approval ofthe Supervisory Committee; and (b) shall contain or be deemed to contain a clause to that effect. (2) Where an application for approval is made under subsection (1 ), the Supervisory Committee may (a) give its approval, subject to such conditions as it considers necessary; or (b) refuse to give its approval.

The Banking Services Act, 2014 [No. J 65 (3) In detennining whether or not to approve an application made under subsection (1), the Supervisory Committee shall take into account such matters as it considers relevant to the application, including (a) the nature and sufficiency of the applicant's financial

resources as a source ofcontinuing financial support for

the licensee or the financial group, as the case may

be;

(b) the soundness and feasibility ofthe applicant's plans for

the future conduct and development of the licensee's

business;

person;

(e) ifthe applicant is a foreign financial institution (i) the stringency of the fit and proper criteria applied by the foreign financial regulatory authority in the jurisdiction where the person was incorporated; (ii) whether the person is supervised on a consolidated basis; and (iii) whether there is any impediment to the Supervisory Committee's receipt ofinformation from the entity or from the foreign financial regulatory authority; (f) where the applicant or any ofthe applicant's affiliates is

a licensee, the impact ofthe proposed acquisition on the

market for financial services in Jamaica and the stability

ofthe financial system; and

(g) the best interest ofthe financial system in Jamaica. (4) Ifthe Supervisory Committee refuses to approve an application made under subsection (1), the applicant shall be notified forthwith and shall be given an opportunity to make written representations.

66
Regulation ofeffective control of licensee.
[No. ] The Banking Services Act, 2014 (5) For the purpose of approving an application made under subsection (1), the Supervisory Committee may require the applicant to furnish it with such additional particulars or other information concerning the agreement or arrangement as the Committee may specifY. (6) The Supervisory Committee shall, in respect of an application under subsection (1), subject to subsection (4), give its decision within one hundred and twenty days from the date on which the application and all information and particulars required to be furnished under this section, from the applicant and extemal sources, are delivered to the Supervisor. (7) For the purposes ofthis section (a) a person shall be regarded as entering into an agreement or arrangement by virtue of which he would become a substantial shareholder ofa licensee, ifthe person, alone or acting together with any connected person, would be in a position to direct the exercise oftwenty per centum or more ofthe voting rights in the licensee; (b) a person holds an interest in a share ifthe person has any legal or equitable interest in that share. 78.-(1) Where any person enters into any agreement or arrangement inrelation to any licensee by virtue ofwhich he would, if the agreement or arrangement is carried out, obtain effective control ofthe licensee, the agreement or ammgement shall be subject to the approval ofthe Supervisory Committee and shall contain or be deemed to contain a clause to that effect. (2) Where an application for approval is made under subsection (1), the Supervisory Committee may give its approval, subject to such condition as it considers necessary. (3) Indetermining whether or not to approve the application made under subsection (1), the Supervisory Committee shall take into account such matters as it considers relevant to the application, including the matters specified in section 77(3).

The Banking Services Act, 2014 [No. ] 67 (4) Ifthe Supervisory Committee refuses to give approval ofan application made under subsection (I), the applicant shall be notified forthwith and shall be given an opportunity to make written representations. (5) For the purpose ofmaking a decision under subsection (I), the Supervisory Committee may require the applicant to furnish the Supervisory Committee with such additional information concerning the agreement or arrangement as the Committee may specify. (6) The Supervisory Committee shall, in respect of an application under subsection (I) and subject to subsection (4), give its decision within one hundred and twenty days from the date on which the application and all particulars and other information required to be furnished under this section from the applicant or other persons, are delivered to the Supervisor. (7) For the purposes ofthis section and section 77 (a) a person shall be regarded as entering into an agreement

or arrangement by virtue ofwhich he would obtain, control

or effective control ofa licensee if, in the opinion ofthe

Supervisor, he alone, or acting together with a connected

person, would be in a position to significantly influence

the policy ofthe licensee;

(b) the reference to entering into any arrangement is a

reference to any formal or informal scheme, arrangement

or understanding, whether express or implied.

79.-{I) The Supervisor may, by notice in writing, require any Power to shareholder of a licensee to submit to the Supervisor, within such ?b;ain . . b'fi d' th . ..t:. In ormatlOnre tIme as may e speC! Ie 10 e notIce, 1OrormatIon- shareholding (a) as to whether that shareholder holds any voting shares in

the licensee as beneficial owner or as trustee; and

(b) ifthat shareholder holds any voting shares as trustee, the

person for whom they are, directly or indirectly, held

(either by name or by other particulars, sufficient to enable

all persons beneficially entitled to those shares to be

identified) and the particulars oftheir interest.

68
Power to restrict dealing in specified shares.
[No. J The Banking Services Act, 2014 (2) A person commits an offence ifhe (a) fails to comply with a requirement under subsection (1); or (b) in response to a requirement under subsection (1), knowingly or wilfully supplies false information to the Supervisor. 80.-(1) Where the Supervisory Committee is satisfied that a licensee, or any other person, has acquired shares in a licensee in contravention of sections 76, 77 or 78 (hereinafter referred to as the "acquirer"), the Supervisor shall serve on that licensee or person, by way ofpersonal service or such other means as the Supervisor considers appropriate, a written notice directing that subsection (2) shall apply with respect to those shares. (2) Where the circumstances in subsection (1) exist the following shall apply (a) the shares so acquired, (hereinafter referred to as "specified shares"), shall be disposed of within such period as the notice may specify; (b) the Supervisor may direct the acquirer to transfer the specified shares to an escrow agent acceptable to the Supervisor to be held in escrow until disposed of; and the cost ofsuch transfer and the escrow agent's reasonable fees shall be borne by the acquirer; (c) otherwise than as provided in paragraph (b), any transfer of, or agreement to transfer, the specified shares, or any transfer ofor agreement to transfer the right to be issued the specified shares, without the prior approval of the Supervisor, shall be void; (d) the voting rights on the specified shares shall be suspended and no voting rights shall be exercisable in respect ofthe specified shares; or (e) no further shares shall be issued in right ofthe specified shares or in pursuance ofany offer made to their holder.

The Banking Services Act, 2014 [No. ] 69 (3) A copy of the notice served on the acquirer shall be served on the licensee to whom the specified shares relate and, if the notice relates to such shares held by a connected person, on the connected person. (4) A Judge ofthe Supreme Court may (a) on the application of a licensee or the Supervisor, order

the sale of any specified shares;

(b) ifthe specified shares are, for the time being, subject to

any restrictions under subsection (1), order, that they shall

cease to be subject to those restrictions; and

the specified shares as he thinks fit.

(S) Where specified shares are disposed ofby sale under subsection (2), the proceeds of sale, less the cost of making the application under subsection (4) (a) and the costs ofthe sale, shall be paid in the manner specified by the Court for the benefit ofthe persons beneficially interested in the specified shares.
81. Any person who is aggrieved by a notice under section 77(4) Appeal
or 78(4) or any notice served under section 80(1) or any condition :::t~on stipulated by the Supervisory Committee in granting approval under notice re
section 77(2) or 78(2), may, within twenty-one days after the receipt sbareholding.
ofthe notice, appeal to the Court ofAppeal against the Supervisory Committee's decision and the Court may make such order as it thinks fit.
PART XVII. Returns and Accounts
82.-(1) Subject to subsection (4), every licensee shall, in Returns. etc. relation to its operations in Jamaica or elsewhere, submit to the Supervisor,'on a stand alone basis and on a consolidated basis, in such form as the Supervisor may specify by notice published in the Gazelle, the following (a) information on its operating earnings and expenses; (b) statements of assets and liabilities (on and off balance

sheet) and shareholders' equity;

70
Sixth
Schedule.
[No. ] The Banking Services Act, 2014 (c) infonnation on customers' liabilities to the licensee in respect of bills discounted, loans and advances, guarantees and any other counterparty exposures; (d) loans in respect of which no principal or interest which is due and payable has been paid for a period of ninety calendar days or more; (e) liquidity positions; (f) connected party exposures; (g) large exposures; (h) interest rate and market risk exposures; (i) the capital adequacy position ofthe licensee; U) acquisitions of five per centum or more of the issued voting share capital of a licensee and any subsequent incremental acquisitions of five per centum or more whether alone or jointly with another; and (k) such other infonnation on the financial condition and performance of, and the risks associated, with the licensee, as the Supervisor may require. (2) In complying with subsection (1), a licensee shall provide the infonnation specified in the Sixth Schedule at the frequency specified in that Schedule. (3) Every licensee shall, in relation to its operations in Jamaica or elsewhere, submit to the Supervisor, an annual return setting out (a) the current operating earnings and expenses during the previous year; (b) all deposits and other debts payable by the licensee in Jamaica or elsewhere in respect of which, during the period of seven or more years, no transaction has taken place and no statement ofaccount has been requested or acknowledged by the depositor or other creditor;

/ The Banking Services Act, 2014 [No. ] 71 (c) unpaid cheques, drafts or bills of exchange drawn, certified or accepted by the licensee and payable in Jamaica or elsewhere in respect ofwhich, during a period of seven or more years, no transaction has taken place and no statement of account has been requested or acknowledged by the holder; (d) all dividends remaining unpaid for a period exceeding five years; and (e) land acquired in the course of the satisfaction of debts due to the licensee and held in fee simple for its benefit by the licensee. (4) The Supervisor may, if he thinks necessary in any particular case, extend, in writing, the time specified for the submission ofinformation under subsection (1). (5) A licensee that contravenes subsection (1) or (2) commits an offence. (6) In this section, "large exposure" means the aggregate of counterparty exposures, including the exposures of persons connected to the counterparty that is five per centum or more ofthe licensee's capital base or such other percentage prescribed ,by the Supervisor by notice published in the Gazette. 83.-(1) Where, in relation to any credit facilities granted by a Loss reserves deposit taking institution, no payment ofprincipal or interest which :~~::~ is due and payable has been made for a period ofninety calendar days the deposit taking institution shall (a) establish an appropriate reserve, to be known as the loss reserve, in respect ofsuch credit facilities in such amount and on such basis as the Supervisor may specify in the Supervisory Rules; (b) not take any interest in respect ofsuch credit facilities to the profit and loss account after the expiration of that period; and

72 [No. J The Banking Services Act, 2014 (c) reverse any interest that is previously accrued but uncollected from income in the accounting period in which no payment of principal or interest which is due and payable has been made for a period of ninety calendar days. (2) The amount reversed under subsection (1) shall include all recorded but uncollected interest in the deposit taking institution's profit and loss account for the financial year to date and prior accounting periods. (3) The deposit taking institution shall cause to be shown in its audited financial statements the aggregate amount ofthe loss reserved in credit facilities and the portion thereof that has been written offagainst the profit and loss account. (4) The audited consolidated financial statements of the financial holding company shall reflect the aggregate of the loss reserves on credit facilities and the write-offs referred to in subsection (3) for the financial group. (5) Where the terms of any credit facilities referred to in subsection (1) have been varied, if the credit facility is of an amount (a) equivalent to one per centum or more ofthe deposit taking institution's capital base, the institution shall, within seven days after the expiration of the month in which the alteration occurred, notify the Supervisor, in writing, giving such particulars of the credit facility as may be prescribed; and (b) less than oneper centum ofthe deposit taking institution's capital base, make a return to the Supervisor setting out the aggregate amount ofthe credit facilities. (6) A deposit taking institution that contravenes subsection (I) commits an offence.

The Banking Services Act, 2014 [No. ] 73 84.-(1) Every licensee shall- Presentation and (a) not later than ninety days after the end of each financial ~f~~:~~~ year, submit the prescribed documents to the Supervisor; statements. (b) not later than fourteen days after the date on which the

prescribed documents are submitted under paragraph (a),

cause a copy thereof to be published in a daily newspaper

and circulated in Jamaica;

prescribed documents in a conspicuous position in each

place ofbusiness of the licensee in Jamaica.

(2) Except as otherwise provided under the Supervisory Rules, the audited financial statements shall be prepared in accordance with generally accepted accounting principles promulgated by the Institute ofChartered Accountants ofJamaica or such other body as the Minister may prescribe. (3) Copies ofthe prescribed documents (a) shall be published in a daily newspaper circulated in

Jamaica; and

(b) may be published electronically on the website of the

licensee,

so, however, that, where the licensee publishes copies of the prescribed documents in electronic form on its website, the publication in the newspaper (i) may contain abbreviated versions thereof, in a form

acceptable to the Supervisor; and

(ii) shall clearly reflect that the full version is available

electronically on the website of the licensee and at the

head office and branch operations ofthe licensee (and in

the case ofthe licensee that is a foreign bank at its branch

operations in Jamaica).

The Banking Services Act, 2014 74 [No. ] (4) In this section, "prescribed documents" means (a) in relation to a deposit taking institution other than a foreign bank (i) audited financial statements in respect of all business transacted by the licensee in its last financial year and signed by not less than two ofthe licensee's directors; and (ii) the auditor's report; and (b) in relation to a foreign bank (i) its latest audited financial statements in respect ofthe bank's operations; and (ii) audited financial statements in respect of its Jamaican branch operations, signed by the principal officer and the next most senior officer in Jamaica of the bank or such other officer as may be designated by the bank, made up to the last working day ofthe bank's financial year. (5) A licensee that contravenes this section commits an offence. Consolidated 85.-(1) Where a licensee has subsidiaries, the prescribed accounts. documents required for the purposes of section 84 shall include consolidated audited financial statements relating to the licensee and its subsidiaries. (2) A financial holding company shall, not later than ninety day after end of the financial year of each company in the group, submit to the Supervisor, in relation to each company within the financial group, an audited financial statement in respect of all business transacted by it in its previous financial year and signed by not less than two ofits directors.

The Banking Services Act, 2014 [No. ] 75 (3) Where a subsidiary of a deposit taking institution is registered under the Industrial and Provident Societies Act (a) the accounts ofthe subsidiary shall be consolidated with

those ofthe deposit taking institution to the extent that (i) deposits taken by the subsidiary shall be deemed to be deposits of the deposit taking institution for the purposes ofsections 43 and 44; and (ii) loans or credit facilities granted by the subsidiary shall be deemed to be loans or credit facilities of the deposit taking institution for the purposes of sections 57 to 63; (b) any transfer offimds to the subsidiary by the deposit taking

institution shall be deemed to be a loan or the granting of

credit facilities for the purposes of sections 57 to 63;

section 82 in relation to the operations ofthe subsidiary

as if the operations were those of the deposit taking

institution;

(d) the deposit taking institution shall make a return of all

loans transferred to the subsidiary whether for

consideration or for the purposes ofcollection.

(4) A licensee that contravenes subsection (2) commits an offence. 86.-(1) If, in the opinion of the Supervisor, the information Insolvency . d' f th fi'al fi d' . disclosed by" contame m any 0 e mancI statements re erre to m sectlOn financial 85 indicates the likelihood ofinsolvency with respect to any member statements. ofthe fmancial group, the Supervisor may, after consultation with such of the licensees as the Supervisor considers appropriate, act in accordance with subsection (2).

76
Electronic submission and admissibility of returns and prescribed documents. Appointment ofexternal auditor. The Banking Services Act, 2014 [No. ] (2) The Supervisor may issue to any ofthe licensees such directions as he thinks fit, including a direction specified in subsection (3). (3) Directions issued under subsection (2) may require (a) the increase ofthe paid-up capital ofthe licensee or, as the case may be, the paid-up capital ofany other member ofthe financial group; (b) the sale, transfer or other disposition ofany other member ofthe financial group or ofpart ofits business; or (c) the winding up ofthe subsidiary. (4) A licensee that fails to comply with directions issued under subsection (2) commits an offence. (5) Where the Supervisor proposes to exercise powers under subsection (2) in relation to a company that is regulated by another regulator, the Supervisor shall consult with that regulator before exercising those powers.
87. The returns and the prescribed documents to be submitted to
the Supervisor under this Part may be submitted in electronic form and shall be admissible in evidence in accordance with section 28 ofthe Evidence Act.
PART XVIII. External Auditors
88.-(1) Every licensee shall appoint an external auditor to audit annually the accounts ofthe licensee. (2) The external auditor appointed under subsection (1) shall (a) be a firm ofregistered public accountants who are eligible auditors; (b) not be disqualified under section 89(1); (c) be covered by liability insurance, the adequacy ofwhich has been declared by the managing or senior partner of the external auditor in a voluntary declaration, taking into account any relevant standards issued by the Institute of Chartered Accountants of Jamaica which shall be

The Banking Services Act, 2014 (No. ] 77 submitted to the Supervisor along with evidence that the liability insurance coverage is in effect; (d) have at least two members, one of whom shall be

responsible for the audit ofthe licensee- (i) who are in good standing with the Institute of Chartered Accountants ofJamaica; (ii) with at least five years experience at a senior level in conducting audits of financial institutions; (iii) who are the holders of valid practising certificates issued by the Public Accountancy Board; and (iv) meet such other requirements as may be prescribed. (3) A licensee that contravenes subsection (l) commits an offence. (4) For the purposes ofthis section, "member" in relation to a firm ofaccountants, means (a) an accountant who is a partner in a firm ofaccountants or

who has responsibility for the issuance ofthe opinion on

the financial statements ofa licensee; and

(b) an accountant who is an employee ofa firm ofaccountants

who has been designated by the external auditor to carry

out audit activities for a licensee.

89.-(1) A licensee shall not knowingly appoint an external Disqualitication d· d fi h II kn . lb' d ofexternal au Itor an a lrm s a not owmg y consent to e appomte as auditor. the external auditor of a licensee if any of the firm's partners or employees who is involved in the audit ofthe licensee- (a) has any direct or indirect interest in that licensee, including

an interest in its shares or is not independent ofthe licensee

and parties connected with the licensee;

78
Powerof
Supervisor to object, etc. to appointment ofextemal auditor. [No. ] The Banking Services Act, 2014 (b) is connected with the licensee or any person who is connected with the licensee; (c ) is a director, controller or employee ofthat deposit taking institution or financial holding company; (d) is in any business relationship with the licensee that in the opinion ofthe Supervisor, is not at arm's length or is not likely to result in a conflict ofinterest, or has credit facilities with the licensee or other group entity that are not performing in accordance with the terms and conditions ofthe facility; (e) does not meet any professional standards relating to conflict of interest independence and objectivity of auditors; (f) has been convicted of any offence under this Act or the Companies Act, or ofany offence under any other written law involving fraud or dishonesty; or (g) is a person whose appointment has been objected to by the Supervisor. (2) A licensee that contravenes subsection (1) commits an offence. 90.-(1) Where, before or after the appointment ofa person as an external auditor, the Supervisor becomes aware that the person is not an eligible auditor, the Supervisor (a) may object to the appointment ofthe person and give the licensee or person concerned notice in writing of his objection to the appointment or continued appointment, specifying the reasons therefor and indicating a period (being not less than thirty days) within which the licensee or person, concerned may submit to him a written response or may make representations by oral submissions (with or without the assistance ofan attorney-at-law); and (b) after that period or, ifthe licensee or person concerned has submitted a response or made representations within the period, after the Supervisor has considered the response or representations, may either direct that the person so appointed be removed pursuant to subsection (1), or may withdraw the objection.

The Banking Services Act, 2014 [No, ] 79 (2) Where the Supervisor (a) objects to the appointment of a person as an external

auditor; or

(b) directs that a person appointed as an external auditor be

removed,

the licensee or the person may appeal against the objection or direction to the Supervisory Appeals Board (3) Where the Supervisor objects to the appointment ofor directs the removal of a person as an external auditor under subsection (2)(a), the Supervisor shall, on the request ofthe person concerned or the licensee, within twenty-one days of the request, give to the person concerned or the licensee the reason for his decision. 91.-(1) The external auditors of a licensee shall report, in Duty of writing, to the persons referred to in subsection (2), any material :~~:~s transaction or condition that has come to the attention ofthe external to report to d· . th d' f h d' h . h I Supervisor on au Itors m e or mary course 0 t e au It tat, m t e externa transactions, auditors' opinion meets one or more ofthe following criteria, that e.tc. affecting • • licensee's IS to say, there IS- financial

•• • viability.
(a) a change m accountmg pohcy or any presentatlOn of or

any failure to present facts or figures which, in the opinion

ofthe external auditors, has the effect of or is likely to

have the effect ofmisrepresenting the financial position

ofthe licensee;

(b) a material misstatement in any financial report or

information generated by the licensee and issued to the

Supervisor or other third parties;

or exposures that have the potential to jeopardize the

licensee's financial viability or reputation;

(d) a transaction or condition indicating that the licensee has

significant weaknesses in internal control which render

or are likely to render the licensee vulnerable to significant

risks or exposure that have the potential ofjeopardizing

the licensee's financial viability or reputation;

80
Review of external auditor's working papers, etc.
[No. ] The Banking Services Act, 2014 (e) a transaction ofan irregular nature that has, or is likely to have, a significant or material impact on the licensee's financial position or reputation; (f) a transaction or condition that contravenes, or is likely to contravene, the provisions ofthis Act or any regulations made under this Act; (g) a transaction or condition that contravenes or is likely to contravene a provision ofany enactment which imposes obligations on a licensee; (h) any information that is indicative ofmaterial deficiencies in a licensee's information technology operating systems; and (i) any other transaction or condition which, in the opinion of the external auditors, should be included in a report under this section. (2) The persons referred to in subsection (l) are (a) the chief executive officer ofthe licensee; (b) each director ofthe licensee; and (c) the Supervisor. (3) An external auditor who contravenes subsection (1) commits an offence. (4) Where a report is made under subsection (l), the report shall be presented at the first meeting ofthe directors ofthe licensee following the date of its receipt by the licensee's chief executive officer and shall be incorporated in the minutes ofthat meeting. (5) The report required under subsection (I) shall be made within thirty days after the date on which the relevant transaction or condition came to the attention ofthe external auditors. 92.-(1) The Supervisor shall be entitled to request and review the working papers ofan external auditor or former external auditor ofa licensee and to require the external auditor or former external auditor to confirm any capital injection, transfer of assets or other transaction undertaken by the licensee that the Supervisor considers to be offmancial significance; and any costs thereof shall be borne by the licensee.

The Banking Services Act, 2014 [No. ] 81 (2) The Supervisor may summon an external auditor or former external auditor ofa licensee to enquire into the operations and financial position ofthat licensee and to produce his working papers referred to in subsection (1) and the external auditor or former external auditor shall comply therewith. (3) An external auditor or former external auditor who contravenes subsection (2) commits an offence. (4) Where an external auditor or former external auditor is summoned under subsection (2), the Supervisor shall notify the licensee and afford the licensee an opportunity to attend any meeting between the Supervisor and the external auditor or former external auditor. 93.-(1) The Supervisor may, in writing, require the external Specialor auditor or former external auditor ofa licensee to- :~~~ded (a) report in writing to the Supervisor on the extent of the

external auditor's or former external auditor's procedures

in auditing the financial statements of the licensee and,

as the case may require, its subsidiaries; or

(b) enlarge the scope of an audit or perform such audit

procedures as the Supervisor may specify in any

particular case and report thereon in writing to the

Supervisor.

(2) An external auditor or former external auditor of a licensee who fails to comply with a requirement by the Supervisor under subsection (1) commits an offence. (3) The expenses ofany audit or examination carried out under subsection (1) or (5) shall be paid by the licensee and if, in any case, the expenses are advanced by the Supervisor, they may be recovered by or on behalf of the Supervisor in a Resident Magistrate's Court as a civil debt, irrespective ofthe amount. (4) Where the Supervisor proposes to exercise powers under this section in relation to a company that is regulated by another regulator, the Supervisor shall consult with that regulator before exercising those powers.

82
Exclusion of liability.
Resignation, etc. ofexternal auditor.
[No. ] The Banking Services Act, 2014 (5) Where in a particular case, the Supervisor has reasonable cause for believing that a special audit of a licensee should be conducted by an external auditor, other than the licensee's external auditor, the Supervisor may appoint an external auditor or a firm ofexternal auditors for that purpose. 94.-{1) An external auditor or former external auditor of a licensee shall not be regarded as being in breach of his duty of confidentiality to the licensee in consequence ofany report made to the Supervisor or to an authorized officer in compliance with disclosures made under this Act. (2) No civil or criminal proceedings or professional sanctions for breach of confidentiality to the licensee or its subsidiaries shall be taken against an external auditor or former external auditor in consequence of any report or disclosure made to the Supervisor or to an authorized officer in compliance with disclosures made under this Act. 95.-{1) Where an external auditor appointed by a licensee (a) intends to resign at any time during the period of appointment; (b) has given notice in writing to the licensee ofhis unwillingness to be considered for reappointment at the expiration ofthe period for which he is appointed; or (c) has had his appointment terminated by the licensee, that external auditor shall, forthwith. give written notice to the Supervisor accordingly and shall state the reasons for the resignation or unwillingness to be considered for reappointment. or termination ofthe appointment, as the case may be. (2) Where (a) a licensee intends to terminate the appointment of the external auditor ofthe licensee; or (b) a resolution has been passed at a general meeting ofthe licensee providing that the external auditor shall not be appointed.

The Banking Services Act, 2014 [No. ] 83 the licensee shall notify the Supervisor accordingly and shall state the reasons for the intention to terminate or for the passage ofthe resolution in the notification. (3) An external auditor or licensee who fails to comply with subsection (1) or (2) commits an offence.
PART XIX. Amalgamation and Transfer
Amalgamation ofBuilding Societies
96.--(1) Two or more building societies may, with the prior Societies may approval of the Supervisory Committee, unite and become one unite. society, with or without any dissolution or division ofthe funds of such societies, if- (a) the terms ofthe union are approved by a special resolution

ofeach ofthe societies; or

(b) the union is approved by the Supervisory Committee

under section 98(5).

(2) Notice of any union of building societies shall be recorded in the Island Record Office. (3) A union between building societies shall not have effect unless notice ofthe union has been sent to the Island Record Office and the union is approved by the Supervisory Committee under section 98(5). 97.-(1) Subject to the prior approval of the Supervisory Societymay Committee, a building society may, by special resolution, transfer =~~nt its engagements to another building society which undertakes to to another fulfil those engagements. society. (2) A building society may undertake to fulfil the engagementsofanother building society (a) by special resolution; or (b) by resolution of a general meeting of the board of

directors.

(3) A building society transferring its engagements under subsection (1) shall give notice ofthe transfer to the Island Record Office.

84
Supplementary provisions relating to societies.
(No. ] The Banking Services Act, 2014 (4) A transfer ofengagements between building societies shall not have effect unless notice ofthe transfer has been given to the Island Record Office, and the transfer has been approved by the Supervisory Committee under section 98(5). 98.-{I) A building society (in this section referred to as "the relevant society") shall act in accordance with subsection (2) where it desires to- (a) unite with one or more other building societies; (b) transfer its engagements to another building society; or (c) undertake to fulfil the engagements of another building society. (2) Unless the Supervisor has, by notice in writing, exempted the relevant society from the provisions ofthis section, the relevant society shall send to each ofits members a statement in terms approved by the Supervisor concerning (a) the financial position ofthe relevant society and that of the other building society or societies concerned; (b) the interest ofthe directors ofthe relevant society in the union or transfer ofengagements; (c) the compensation or other consideration proposed to be paid to the directors or other officers of the relevant society, and of the other building society or societies concerned; and (d) the payments, ifany, to be made to members ofthe relevant society, and of the other building society or societies concerned, in consideration of the union or transfer of engagements. (3) The Supervisory Committee may require a report from the external auditors of the societies concerned, on any aspect of the statement made under subsection (2). (4) The relevant society shall apply to the Supervisory Committee to approve the union or transfer ofengagements.

The Banking Services Act, 2014 [No. ] 85 (5) The Supervisory Committee, after hearing the relevant society and any other persons appearing to it have a justifiable interest in the matter, may approve the union or transfer of engagements. (6) Notice of the approval of a union or transfer of engagements shall be published in the Gazette and in at least one daily newspaper circulated in Jamaica. (7) Subject to subsection (8), the recording ofthe notice ofthe union or transfer ofengagements by the Island Record Office shall operate as an effectual conveyance, transfer and assignment, as at the date ofthe recording ofthe funds, property and assets of the societies uniting, or ofthe society transferring its engagements to the society to which engagements may be transferred, as may be set out in the instrument ofunion or transfer ofengagements, without any other conveyance, transfer or assignment. (8) The rights of any creditor of any society shall not be affected by the union or transfer ofengagements ofthat society. (9) A failure to comply with the provisions ofsubsection (1) shall not invalidate the union or transfer ofengagements; but if the relevant society fails to comply with those provisions, the society, and every officer ofthe society who knowingly authorizes the default commits an offence.
99. A resolution ofa building society shall be a special resolution Special
for the purposes ofthis Act when it has been passed by not less than resolutions. three-fourths ofsuch members ofthe society as, being entitled so to do, vote in person or, where proxies are allowed, by proxy, on a poll on the resolution, at a meeting of the society of which notice specifying the intention to move the resolution as a special resolution has been duly given. 1 OO.-{ 1) Where-- Schemes of arrangement. (a) a compromise or arrangement is proposed between a

society and its creditors or any class ofthem or between

the society and its members or any class ofthem; and

86
Conversion of a society into a company.
[No. The Banking Services Act, 2014 (b) the Supervisory Committee approves the compromise or arrangement, the Court may, on the application of the society, any creditor or member thereof or the Supervisory Committee, order a meeting of the creditors or class ofcreditors, or ofthe members ofthe society or class ofmembers, as the case may be, to be summoned in such manner as the Court directs. (2) The provisions of section 206 (2) to (5) and sections 207 to 211 ofthe Companies Act shall, mutatis mutandis, apply to a compromise or arrangement referred to in subsection (1) as ifthe society were a company limited by shares. (3) Without prejudice to the generality of subsection (2), the provisions of subsection (4) shall apply in any case where a compromise or arrangement is proposed in relation to a society which is a member ofa group in respect ofany or all ofthe members ofwhich a compromise or arrangement is also being proposed and the Supervisory Committee approves the compromise or arrangement (4) A compromise or arrangement in relation to the society may provide that (a) the assets and liabilities of the society and any other member ofthe group be combined as if the society and that member were a single undertaking; and (b) the members and creditors of the society and any other member ofthe group be treated as ifthey were members and creditors ofthat single undertaking. lOl.-(1) A registered society may, by special resolution and subject to the approval ofthe Supervisory Committee, on application by the .society determine to convert itself into a company under the Companies Actor to amalgamate with, or transfer its ~ngagements to, any company. (2) If a special resolution for converting a registered society into a company contains the particulars by the Companies Act required to be contained in the articles of incorporation of a company, and a copy thereof has been registered at the office ofthe

The Banking Services Act, 2014 [No. ] 87 Registrar of Companies, a copy of such resolution under the signature ofthe Registrar ofCompanies shall have the same effect as articles ofincorporation duly signed and attested under that Act. (3) Subject to subsections (4), (5) and (6), if a registered society is registered as, or amalgamates with, or transfers all its engagements to, a company, the certificate ofincorporation ofthe society under the Building Societies Act shall thereupon become void and shall be cancelled by the Deputy Keeper ofthe Records. (4) The registration of a society as a company shall not affect any right or claim for the time being subsisting against the society, or any penalty for the time being incurred by the society. (5) For the purpose of enforcing any such right, claim or penalty, the society may be sued and proceeded against in the same manner as ifit had not become registered as a company. (6) Every right or claim, or the liability to any penalty, shall become a right or claim against, or liability of, the company. Amalgamation and Transfers ofBanks and Merchant Banks 102.-(1) Subject to subsection (4), a deposit taking institution Amalgamation other than a building society may, with the prior approval of the and transfer. Supervisory Committee, on application by the deposit taking institution enter into an agreement or arrangement to- (a) amalgamate its property and business (whether in whole

or in part) with the property and business of any deposit

taking institution; or

(b) transfer its business (whether in whole or in part) to

another deposit taking institution.

(2) An application to the Supervisory Committee for approval under subsection (1) shall be presented in the form of a scheme, which may include the financial holding company, and shall be regulated in accordance with such provisions as may be prescribed. (3) The Supervisor may, in relation to a request for approval under subsection (1), require a report from the external auditors ofthe institutions concerned on any aspect ofthe proposed scheme.

88
Deposit of statements with
Supervisor.
Vesting of assets on sale ofinstitution.
[No. ] The Banking Services Act, 2014 (4) Where at least one of the parties to an agreement or arrangement under subsection (1) is a building society and the transaction amounts to the conversion ofa building society to which the agreement relates to a company, section 101 shall apply. l03.-{I) Where an amalgamation or transfer referred to in
section 102 takes place, the deposit taking institution as amalgamated
or to which business is transferred shall, within thirty days from the date ofcompletionofthe amalgamation or transfer or such longer period as the Supervisor may, in writing, allow, deposit with the Supervisor (a) certified copies ofstatements ofthe assets and liabilities of the deposit taking institutions concerned in the amalgamation or transfer, together with a statement of the nature and terms ofthe amalgamation or transfer; (b) a certified copy of the agreement or deed under which the amalgamation or transfer is effected; and (c) a declaration signed by the secretary or manager, if any, and by at least two directors ofeach ofthe deposit taking institutions concerned inthe amalgamation ortransfer that to the best oftheir knowledge and belief, every payment made or to be made to any person on account of the amalgamation or transfer is therein fully set out, and that no payments other than those set out have been made or are to be made by or with the knowledge of any parties to the amalgamation or transfer. (2) A person who in any statement, agreement, deed or declaration referred to in subsection (1) causes or permits the inclusion ofany information which he knows to be false in a material particular, or recklessly includes any information which is false in a material particular, commits an offence. l04.-{1) Subsections (2) and (3) shall apply in any case where a deposit taking institution amalgamates its property and business with, or transfers its business to, whether in whole or in part and

The Banking Services Act, 2014 [No. ] 89 whether by sale or otherwise, any other deposit taking institution and the acquiring institution requires that the assets and, where applicable, the liabilities included in the agreement for amalgamation or transfer be vested in that acquiring institution under this section. (2) The acquiring institution may apply, in writing, to the Supervisor specifying which of the assets and, where applicable, the liabilities included in the agreement for amalgamation or transfer are required to be so vested and the Supervisor may, ifhe thinks fit, recommend to the Minister that an order be made vesting, subject to the agreement for amalgamation or transfer, the assets and, where applicable, the liabilities so specified in the acquiring deposit taking institution. (3) Where a recommendation is made to the Minister under subsection (2), the Minister may make the order, and thereupon (a) the assets shall so vest, and where the order so provides,

the liabilities, other than any liabilities that are

specifically excluded under the terms ofthe order, shall

be assumed and vest, without further conveyance,

assignment and assurance; and

(b) without prejudice to paragraph (a), the transferring

deposit taking institution shall, if requested by the

acquiring institution execute such formal and separate

conveyances, assignments and assurances as are

reasonably required by the acquiring institution in

conformity with the agreement for amalgamation or

transfer.

l05.-{1) Where an agreement has been entered into for the Transferof acquisition by a deposit taking institution (in this section and section ~::~ess. 106 referred to as the "'transferee") ofthe trust business ofanother deposit taking institution (referred to in this section and section

90 [No. ] The Banking Services Act, 20/4 106 as the "transferor") the transferee may, for the purpose of effecting the transfer to, and the vesting in, the transferee of that trust business, make a written application to the Supervisor for an order to be made by the Minister under subsection (2). (2) The Minister may, if he thinks fit in relation to an application under subsection (l), and if the Supervisor does not object, make an order transferring to and vesting in the transferee subject to the relevant agreement, the trust business specified in the orderandthereupon- (a) the trust business so specified shall be transferred and shall vest without further conveyance, assignment and assurance; and (b) without prejudice to paragraph (a), the transferor shall, if requested by the transferee, execute such formal and separate conveyances, assignments and assurances as are reasonably required by the transferee in conformity with the relevant agreement. (3) No transfer or vesting effected by an order under subsection (2) shall (a) operate as a breach of covenant or condition against alienation; (b) give rise to any forfeiture; or (c) invalidate or discharge any contract or security. (4) The transfer to and vesting in the transferee of any trust business under this section shall not be subject to the provisions ofthe Stamp Duty Act or the Transfer Tax Act. Effect of 106.--(1) Any trust business transferred to and vested in a transfer. transferee by virtue of an order made under section 105 which,

The Banking Services Act, 2014 [No. ] 91 immediately before the coming into force ofthat order was held by the transferor, whether alone orjointly with any other person (a) as trustee or custodian trustee ofany trust, deed, settlement,

covenant, agreement, or will, and whether originally so

appointed or not, and whether appointed under hand or

seal or by order of any court;

(b) as executor ofthe will of a deceased person; (c) as administrator ofthe estate of a deceased person; or (d) as judicial trustee appointed by order of any court, shall, from the coming into force ofthe relevant order made under
section 105, be held by the transferee, whether alone or jointly
with such other person in the same capacity upon the trusts, and with and subject to the powers, provisions, liabilities and obligations applicable thereto, respectively. (2) Any existing instrument or order ofany court under or by virtue ofwhich any trust business became vested in the transferor in any such fiduciary capacity (including in the case of a will any grant ofprobate thereof) and any provisions therein or any existing contract or arrangement for the payment to, or retention by the transferor, of remuneration for its services in any such fiduciary capacity shall, on and from the coming into operation ofthe relevant order, be construed and have effect, so far as the c~mtext permits, as iffor reference therein to the transferor deposit taking institution there were substituted a reference to the transferee. (3) All existing contracts, agreements, conveyances, deeds, leases, licences, undertakings and other instruments, whether analogous to the foregoing or not, entered into by, made with, or addressed to, a transferor (whether alone or with any other person) shall be binding and offull force and effect in every respect against or in favour ofa transferee as fully and effectively as if, instead of the transferor, the transferee had been a party thereto, bound thereby or entitled to the benefit thereof.

92
Restriction on voluntary winding up, [No. ] The Banking Services Act, 1014 (4) Any will, whether made before, on or after the coming into force of an order made under section 105 by a person dying before, on or after such coming into force, which appoints or purports to appoint the transferor to be executor or trustee thereof shall be construed and have effect as if, for any reference therein to the transferor as such executor or trustee orotherwise in connection with the appointment, there were substituted a reference to the transferee and, in a case where the transferee did not exist at the date ofthe will, as ifit had then existed. (5) No testamentary gift shall be adeemed by reason only ofthe operation ofsection 105 or this section. (6) In this section "existing" means in relation to an order made under section 105(2), existing at the date ofthe coming into operation ofthat order; "will" includes a codicil or any other testamentary writing.
PART XX. Voluntary Winding up ofLicensee
107.--(1) Where a licensee passes a resolution for voluntary winding up, the licensee shall, forthwith, notifY the Supervisor and the Chief Executive Officer of the Jamaica Deposit Insurance Corporation in writing and shall, within twenty-one days after the passing ofthe resolution, furnish to the Supervisor the following in relation to the licensee (a) declaration ofsolvency referred to in section 277 ofthe Companies Act; (b) profit and loss account made up as to a date that is no more than ninety days prior to being furnished to the Supervisor; (c) a balance sheet as at the date to which the profit and loss account is made up; and (d) the external auditor's report in relation to such declaration account and balance sheet.

The Banking Services Act, 20]4 [No. ] 93 (2) A resolution for voluntary winding up of a licensee shall not be effective unless the Supervisor certifies that its realizable assets are such as to enable it to satisfY the claims ofits creditors. '(3) Where a licensee passes a resolution for voluntary winding up, it shall (a) cause a copy of the resolution to be published in the

Gazette and in a daily newspaper circulated in Jamaica;

and

(b) give notice of the resolution to its customers, in such

form and containing such information as the Supervisory

Committee may approve; and that licensee shall, within

thirty days after the date ofpublication under paragraph

(a), cease to carry on banking business or function as a

financial holding company in Jamaica.

(4) A licensee who contravenes subsection (1) commits an offence.
PART XXI. Banking Business Through Agent

Arrangements

l08.-{l) Subject to subsections (2) and (4), a deposit taking Agent institution may, with the prior approval of the Supervisory arrangements. Committee in writing, appoint a person as an agent to offer one or more ofthe following banking services (a) deposits and withdrawals; (b) payments ofbills and loan repayments; (c) electronic transfer offunds; (d) account balance enquiries; (e) the collection ofknow your customer and customer due

diligence documentation from customers for services or

facilities, so, however, that, the deposit taking institution

shall remain responsible for the analysis or verification

. ofthe adequacy and acceptability ofthat documentation; and

94 [No. J The Banking Services Act, 2014 (t) any other services that the Supervisory Committee may, in writing, approve. (2) The Supervisory Committee may prescribe financial or operational thresholds, limits or other financial or non-financial restrictions in relation to the services referred to in subsection (1). (3) The Supervisor shall be entitled at all reasonable times to examine the books, documents, records, statements and other relevant information ofan agent, in relation to its operations as an agent of a deposit taking institution, and is accordingly, entitled to exercise the functions set out in Part XIII in relation to the agent, in so far as the Supervisor deems necessary. (4) A person shall not be eligible for appointment as an agent unless (a) the person has been authorized by the Supervisor to offer such services; (b) the person is legally incorporated in Jamaica and is compliant with the tax and other statutory requirements imposed by any enactment that are relevant to the person; (c) the directors, officers, substantial shareholders and key employees of the person are fit and proper persons; (d) the person has satisfied the Supervisory Committee that the person is able to meet the operating, security and financial requirements to act as an agent as specified in the Supervisory Rules. (5) A person who is appointed as an agent, shall be subject to the secrecy obligations set out at section 134. (6) A deposit taking institution that offers or provides any ofthe services set out in subsection (1) through a third party without the prior approval of the Supervisory Committee commits an offence. (7) A person who falsely holds himself out as being authorized by a deposit taking institution to provide any of the services referred to in subsection (1) commits an offence.

The Banking Services Act, 2014 [No. ] 95 (8) The Supervisory Committee may revoke an approval under subsection (I) ifa person appointed as an agent (a) is revealed or discovered subsequently to be a person

who is not eligible for appointment as an agent; or

(b) by his actions or omissions, is no longer, in the

Supervisory Committee's opinion, eligible to continue

to operate as an agent under this section.

(9) Where an approval has been revoked under subsection (8) a deposit taking institution shall terminate the agreement or arrangement pertaining to the appointment ofthe agent or cause the agreement or arrangement to be terminated and the agreement or arrangement shall contain a clause to this effect or shall be deemed to contain a clause to this effect.
PART XXII. Enforcement
l09.-{I) Where the Supervisor believes that any of the Unsa~e conditions specified in Part A ofthe Fifth Schedule exists in relation practices. 1

th . Fifth to a Icensee, e SupervIsor may- Schedule.
(a) issue a warning to the licensee ofthe likelihood of serious

sanctions being imposed, unless the condition identified

in relation to the licensee is rectified as directed by the

Supervisor;

(b) require the licensee, to give an undertaking signed by the

majority of the directors ofthe board ofthe licensee to

take such corrective action as may be agreed between

the licensee and the Supervisor;

in accordance with subsection (2); or

(d) issue a cease and desist order in accordance with Part B

ofthe Fifth Schedule.

(2) Directions under subsection (1) shall be such as appear to the Supervisor to be appropriate in the prevailing circumstances,

96 [No. ] The Banking Services Act, 2014 whether for the purposes ofsafeguarding the assets ofthe licensee or otherwise, and may, in particular (a) require the licensee to take certain steps or to refrain from adopting or pursuing a particular course of action or to restrict the scope of its business in a particular way; (b) impose limitations on the granting ofcredit or the making ofinvestments; (c) in the case of a deposit taking institution, impose limitations on the acceptance of deposits or prohibit the institution from soliciting deposits either generally or from persons who are not already depositors; (d) prohibit the licensee from entering into any other transaction or class oftransactions; or (e) require the removal ofany director or manager. (3) In the case of a foreign bank, an undertaking that is required under subsection (2) shall ~e provided by the members ofthe body which is responsible for the governance and oversight ofthe branch operations in Jamaica. (4) Where a deposit taking institution ceases to be liable for deposits which were or could have been the subject matter of the Supervisor's powers under this section (a) no direction shall be given by the Supervisor to that institution under this section; and (b) any direction ofthe Supervisor which was given to that institution shall cease to have effect. (5) A contravention ofany direction or prohibition imposed under this section or section 112 shall not invalidate any transaction. (6) A licensee which fails to comply with any requirement or contravenes any prohibition imposed by any direction or cease and desist order under this section commits an offence.

The Banking Services Act. 2014 [No. ] 97 (7) Where the Supervisor is exercising his powers under subsection (1) the Supervisor shall, forthwith, give notice to the Jamaica Deposit Insurance Corporation thereof. (8) A warning issued under subsection (l)(a), or an order issued under subsection (1)(d), in relation to a foreign bank. shall be directed to the senior officer in charge ofthe head office ofthe foreign bank. and the authorized agent for the branch operations in Jamaica . .110.-(1) Subject to subsection (2), where a licensee's minimum Prompt capital levels have fallen to one percentage point above any ofthe :::~ive prescribed minimum capital levels or above any ofthe minimum capital levels otherwise set by the Supervisory Committee with respect to that licensee's operations, the Supervisor shall take one or more ofthe following actions (a) issue an early warning notice, within fourteen days after

the reporting date, requiring the licensee to restore its

capital to the minimum capital level specified by the

Supervisory Committee within the time specified in the

notice; and

(b) where capital is not restored to the minimum capital level

specified in the notice issued under paragraph (a) within

the time fixed in the notice, require the licensee to give

an undertaking signed by the majority ofthe directors of

the Board of the licensee to take the corrective action

required by the Supervisor.

(2) Nothing in subsection (1) prevents the Supervisor from taking any ofthe actions outlined in that subsection where capital levels are falling, but remain above the prescribed minimum capital levels or above the minimum capital levels otherwise set by the Supervisory Committee with respect to that licensee. (3) A licensee's minimum capital levels shall not fall below the prescribed minimum capital levels or the minimum capital levels otherwise set by the Supervisory Committee with respect to that licensee.

98
Temporary ::ement

licensee's capital falls belowfiftyper centum.
[No. ] The Banking Services Act, 2014 (4) Where a licensee's minimum capital levels fall below the prescribed minimum capital levels, the Supervisor shall issue directions, in writing, requiring the licensee to (a) undertake the requisite injection of capital to return its capital to the level specified by the Supervisory Committee; and (b) take any other corrective action deemed appropriate by the Supervisor in the circumstances. (5) The directions that the Supervisor has issued under subsection (4) shall address- (a) the timeline within which the capital injection must occur, which timeline shall not exceed a period of ninety calendar days from the date ofthe direction; and (b) the enchanced monitoring process to which a licensee will be subject. (6) In the case of a foreign bank, directions issued under subsection (4) shall be directed to the members ofthe body which is responsible for the governance and oversight of its branch operations in Jamaica. (7) A licensee that contravenes directions issued under subsection (4) commits an offence. 111.-(1) Where a licensee's capital falls by fifty per centum below any ofthe prescribed minimum capital levels, the powers of temporary management conferred under this Part shall be invoked. (2) Where a financial holding company's capital falls by fiftyper centum below any ofthe prescribed minimum capital levels, the Supervisor shall require the financial holding company to undertake a resolution strategy that is satisfactory to the Supervisory Committee, which may involve the disposal ofany entity within the financial group that is the cause ofthe capital deficiency. (3) Before approving a resolution strategy under subsection (2) that may impact an entity in the financial group that is regulated by another regulator, the Supervisor shall consult with that regulator.

The Banking Services Act. 2014 [No. ] 112.-(1) Where the Supervisory Committee believes that a Temporary licensee is, or appears likely to become, unable to meet its =:::~n. obligations or that any ofthe conditions specified in paragraph 3, windingup 5, 6, 7, 8, 9 or 11 of Part A of the Fifth. Schedule exists, the ::ocation. Su~rvisory Committee may take anyone or more ofthe following Fiftb actlons- Schedule.. (a) assume the temporary management of the licensee in

accordance with Part C ofthe Fifth Schedule;

(b) present an application to the Court regarding the

reconstruction or the petition for the winding up ofthe

licensee;

(c) revoke the licence; or
(d) . in the case ofa foreign bank (i) instruct the head office to take conective action in relation to its branch operations in Jamaica; (ii) direct that the branch operations in Jamaica be placed under alternative management, including the appointment ofreceivers; (iii) direct that the branch operations be closed and revoke the licence; or (iv) wind up the branch operations in Jamaica in accordance with section 122. . (2) Determinations involving the matters specified in paragraphs (a) and (c) ofsubsection (1) shall include consultation with the Minister in relation to considerations involving matters of national interest. (3) The Supervisor shall, on behalf of the Supervisory Committee, consult with the Minister, in writing, on any action that it intends to take under subsection (1). (4) Where action is taken under subsection (1) the licensee shall not, without the consent ofthe Supervisor, make any payment, directly or indirectly, to or for the benefit of any person who is or was an officer or a connected person ofthe licensee.

100 [No. 1 The Banking Services Act, 2014 (5) The provisions of any applicable enactment relating to the mode of winding up by the court and to arrangements or reconstruction shall, with such modifications and adaptations as may be necessary, apply to a petition or an application made under subsection (1 ) (b). (6) The revocation of a licence under this Act shall not relieve the licensee of any obligation incurred or assumed by the licensee during the period ofvalidity ofthe licence. Licensee 113.-(1) Where the Supervisory Committee is ofthe opinion ceasing to be that- viable. (a) a licensee has ceased to be viable; (b) the viability of the licensee cannot be restored by the exercise ofpowers under this Part; and (c) it is in the best interests of depositors that there be a reconstruction ofthe licensee or a disposition ofits assets in accordance with section 116 on an expeditious basis, the Supervisor shall notify the licensee in writing accordingly and provide the licensee with an opportunity to make representations within ten days ofthe receipt ofthe notice by the licensee. (2) For the purposes of subsection (1), the Supervisory Committee may take into account all matters that it considers relevant and in all cases, whether (a) to sustain its operations, the licensee is dependent on borrowings, advances, guarantees or other financial assistance from a government company; (b) the licensee's capital base has fallen below the prescribed minimum capital levels; (c) the licensee has failed to pay any liability that has become due and payable, or will not be able to pay its liabilitie,s as they become due and payable.

The Banking Services Act, 20J4 [No. ] 101 (3) After considering any representation made by the licensee pursuant to a notice under subsection (1) the Supervisory Committee may invoke its powers or recommend to the Minister that he exercises any ofhis powers under this Part. 114.-(1) Upon receiving the recommendation ofthe Supervisory Vesting of Committee under section 113(3) the Minister shall, as to the exercise ~harM~s•. etc. • . • • m mIster. of hIS powers under thIS Part, 'seek the adVIce of a CommIttee comprising the Supervisor, the Deputy Supervisor, the Financial Secretary and such other person or persons as the Minister may appoint. (2) On receiving the advice under subsection (l), the Minister shall consider the advice and may, with the approval of the Cabinet, make an order (hereinafter referred to as a "vesting order"), vesting the licensee's shares and subordinated debt in the Accountant-General. (3) The powers conferred on the Minister by this Part may be exercised in relation to a licensee in respect of which the Supervisor has assumed temporary management. (4) A vesting order made under subsection (2) (a) vests the licensees shares and subordinated debt in the

Accountant-General as from the date of the order, free

from any encumbrance attaching thereto, notwithstanding

any knowledge ofthe encumbrance;

(b) does not extinguish any adverse claim in relation to such

shares and subordinated debt to the extent that it is a

personal claim against a person other than the Minister

or the Accountant-General or a person claiming under

either ofthem; and

interest in the shares or subordinated debt or assignee or

successor in title ofthe person who was the holder ofthe

shares or subordinated debt immediately before the

making of the order from being entitled to receive

compensation under section 118.

102 [No. ] The Banking Services Act, 2014 Effectof 115.-(1) Where a vesting order is made in respect of a vesting order. licensee- (a) in the case ofa fmancial holding company, the shares of the finanacial holding company and ofany deposit taking institution that it holds, shall be placed in escrow and the Minister may proceed forthwith to restructure the fmancial holding company in accordance with section 116; (b) in the case ofa deposit taking institution, the functions, rights and privileges of the directors of the institution and those ofits officers responsible for its management are suspended from the date ofthe order and the Minister may exercise or perform those functions, rights or privileges; (c) in the case of a deposit takiu.g institution, the Minister may appoint one or more persons to assist in the management of the institution and may assign to such person orpersons any ofthe functions, rights or privileges ofthe directors and officerS ofthe institution; (d) the Minister may, if he co~iders it to be in the best . interests of the depositors, apply to a Judge of the Supreme Court for an order stating (i) the commencement or continuance of any proceedings by or against the licensee for such period as the Judge thinks fit; and (ii) any execution against the property of the licensee; (e) no creditor ofa licensee sllalienforce any remedy against , the licensee or its property Without the leave ofa Judge ofthe Supreme Court; and

The Banking Services Act, 2014 [No. J 103 (f) no person may terminate or amend any agreement or arrangement with the licensee or claim an accelerated payment under any agreement by reason only of (i) the insolvency ofthe licensee; (ii) a default, before the vesting order was made, by the licensee in the performance of its obligations under the agreement; or (iii) the making ofthe vesting order. (2) Any stipulation in an agreement or arrangement referred to in subsection (l)(f) shall be ofno force or effect ifit (a) has the effect ofproviding for or permitting anything that, in substance, is contrary to that paragraph; or (b) provides that on (i) the licensee's insolvency; (ii) default by the licensee in the performance of an obligation; or (iii) the making ofa vesting order, the licensee ceases to have the rights to use or deal with property that the licensee would otherwise have. (3) Paragraph (f) of subsection (1) shal1.not apply in respect of an agreement or arrangement with the licensee which was made more than six months prior to the date of the vesting order. (4) Where an order is granted under paragraph (d) (i) of subsection (1) inrespect ofany proceedings, time shall not continue to run against the person bringing those proceedings during the period detennined by the Judge under that paragraph. 116.-(1) Where a vesting order has been made in respect ofa Restruct,uring licensee. the Minister may, inaddition to his other rights and powers, ttansactJons.

104 [No. ] The Banking Services Act, 2014 carry out, or cause to be carried out, or cause the licensee to carry out (a) a transaction or a series oftransactions that involves the sale ofall or part ofthe licencee's shares or subordinated debt to one or more buyers; (b) a transaction or a series of transactions that involves the amalgamation ofthe licensee with another company; (c) a transaction or a series oftransactions that involves the sale or other disposition of all or part ofthe assets ofthe licensee or the assumption of all or part ofits liabilities; or (d) any other transaction or series oftransactions the purpose of which is to restructure all or a substantial part of the licensee's business. (2) Where the Minister considers that a transaction or a series of transactions referred to in subsection (l) has been substantially completed, he shall cause a notice to be published in the Gazette to that effect, specifying the date ofsuch completion. (3) No restriction on the right of a licensee in respect of which a vesting order has been made to sell any of its assets or to provide for the assumption of any of its liabilities, other than a restriction provided for in an enactment, shall apply so as to prevent the Minister, the Accountant-General,. the licensee or any other person, from carrying out a transaction or a series of transactions referred to in subsection (1). wchinding ufP or 117.-(1) The Minister shall apply to the Court for a winding up S emes 0 arrangements. order or propose an arrangement or reconstruction under the provisions ofthis Act in respect ofa licensee if, in the opinion ofthe Minister, a transaction or a series oftransactions referred to in section 116( 1 ) is not substantially completed on or before a date that is (a) one hundred and eighty days after the making ofthe vesting order; or (b) any extension ofthat period that the Minister may allow.

The Banking Services Act, 2014 [No. ] 105 (2) The Minister, in relation to all costs, expenses and liabilities incurred on account of actions taken by him in relation to a licensee in respect ofwhich a vesting order has been made, shall, in a winding up ofsuch licensee, be a creditor ofthat licensee and all such costs, expenses and liabilities ofthat licensee shall be deemed to be preferential debts in accordance with any laws relating to insolvency and accordingly shall be paid in priority to all other debts.
118. The Minister shall, within forty-five days after the date of Noticere .
. d' h h' d' I b co. th compensation. the vestmg or er, give to eac person w 0, Imme late y elore e making ofthe vesting order, was the holder ofshares or subordinated debt in the licensee to which the vesting order relates or the assignee or successor in title ofthat person (a) a notice containing an offer ofcompensation in an amount

to which that person would be entitled, determined in

accordance with section 119; or

(b) a notice stating that no offer of compensation is being

made because the amount so determined is nil.

119.-{1) The amount of compensation payable to a person Determination referred to in section 118 shall be calculated on the net gain if any ~f compensa tIon. accruing to the Accountant-General upon completion ofany ofthe transactions referred to in section 116(1), after deduction of all amount invested in or expended on the licensee by the Minister and all other costs incurred in relation to the transaction. (2) Where there is no net gain accruing to the AccountantGeneral upon completion of any of the transactions referred to in
section 115(1), compensation shall not be payable.
(3) The Minister shall make regulations prescribing the principles and procedures applicable to the calculation and payment of compensation under this section and matters incidental thereto and regulations so made shall be subject to affirmative resolution ofthe House ofRepresentatives.
120. A licensee in respect of which a vesting order has been Applicaton to
made or any person claiming an interest or right over any property Court.

106
Re-vesting of shares and subordinated debt Winding up of foreign bank. [No. ] The Banking Services Act, 2014 In tUll~~ ~~ ~rJer relates may make an application to the court for the purpose of. (a) establishing such right or interest, ifany; (b) determining the amount ofcompensation, ifany, to which he is entitled under section 119; and (c) enforcing his right to any such compensation. 121.-{1) Where (a) a vesting order has been made under section 114(2) in respect of a licensee; and (b) before any action is taken by the Minister under section 115(1), the Minister is satisfied that the matters specified in section 113(1) and (2) are no longer applicable in respect of that licensee, the Minister may act in accordance with subsection (2). (2) The Minister may, with the approval ofthe Cabinet on the recommendation ofthe committee ofadvisors referred to in
section 114( 1), by order, revest the shares and subordinated debt
ofthe licensee in
(a) the persons who, immediately before the making ofthe vesting order, were the holders of those shares and subordinated debt; or (b) the assignees and successors in title ofthose persons. (3) An order made under this section shall be subject to the conditions as may be specified in the order. 122.-{1) Notwithstanding anything to the contrary in any other law, and without prejudice to the rights ofany depositor as against the foreign bank, in a winding up or equivalent process relating to any foreign bank the realizable assets ofthe foreign bank's branch operations in Jamaica shall be deemed to be the assets ofthe branch ofthat foreign bank operating in Jamaica (hereinafter referred to as the "Jamaican branch") as ifthat branch were a company, and shall

The Banking Services Act. 2014 [No. ] 107 be available for distribution in accordance with the priorities set out in subsections (2) and (3). (2) Notwithstanding the provisions ofany other law relating to the ranking ofdebt in a winding up, and without prejudice to the rights of any depositor as against a foreign bank on a winding up or equivalent process, the following claims shall have priority over all other claims on the assets ofthe Jamaican branch ofa foreign bank:
(a) first, all rates, charges, taxes, assessments or impositions,

whether imposed or made by the Government or by any

public authority under the provisions of any law. and

having become due and payable within twelve months

immediately preceding the date of commencement of

the winding up (in this section referred to as "the

commencement date");

(b) second, the wages and salaries ofthe officers andemployees

ofthe Jamaican branch that accrued during the six months

immediately precedingthe commencementdate;

public on current account, deposit account or other similar

account;

(d) fourth, all amounts due in respect ofany compensation or

liability for compensation under the Workmen:SO

Compensation Act accrued before the commencement

date;

(e) fifth. all amounts by way of contributions for which the

Jamaican branch is liable under sections 4. 5 and 6 ofthe

National Insurance Act and which have become due and

payable before the commencement date;

(f) sixth, redundancy payments payable under the Employment (Termination and Redundancy Payments) Act; (g) seventh, all amounts by way of contributions for which

the Jamaican branch is liable under the National Housing

J08

Coercion order,
[No. ] The Banking Services Act, 2014 Trust Act or the Human Employment and Resource Training Act and which have become due and payable before the commencement date; (h) eighth, all amounts owed to general creditors of the Jamaican branch. (3) After payment of the priority claims against the Jamaican branch, all remaining claims against that branch may then be paid.
PART XXIII. Additional Enforcement Measures
123.-{1) The Supervisor may apply to a Judge ofthe Supreme Court for an order under subsection (2) where there is reasonable cause to believe that any person (a) has contravened any provision of this Act or any regulations made under this Act or that the contravention is likely to continue or be repeated; or (b) is about to contravene any provision of this Act or regulations made under this Act. (2) On an application under subsection (1), the Judge may, ifsatisfied as to the matters set out in paragraph (a) or (b) of that subsection, make an order (a) restraining the person from doing anything which constitutes or repeats the contravention; (b) restraining the person from disposing ofany assets ofthe person (as the case may be) which the Judge is satisfied are likely to be disposed ofby the person; (c) ifthere are steps which can be taken for remedying the contravention, requiring the person to take such steps to remedy it as may be specified in the order. (3) Upon the application of the Supervisor, a Judge of the Supreme Court may make an order compelling any person who

The Banking Services Act, 2014 [No. ] 109 is not in compliance with any ofthe provisions ofthisAct, or regulations madeunderthisAct, to comply with the provisions. (4) Nothing in this section shall prevent the Supervisor from transmitting any information in his control or possession, relating to any contravention ofthis Act, or any regulations made under this Act, to the designated authority for the purpose of any criminal investigation orto the Director ofPublic Prosecutions for the purpose ofany prosecution.
124. -(1) The Supervisor may apply to the Supreme Court for Restitution
an order under subsection (2) if a person or entity required to be Order. licensed or authorized under this Act is convicted of an offence under this Act or any regulations made under this Act and (a) profits have accrued to the person as a result of the

contravention or commission ofthe offence; or

(b) one or more persons have suffered loss or been otherwise

adversely affected as a result of the contravention or

commission ofthe offence.

(2) On an application under subsection (1). the Court may order the person against whom the application is brought to pay to the Accountant-General such sum as appears to be just, having regard to- (a) the profits appearing to have accrued. in any case

described in subsection (I)(a);

(b) the extent ofthe loss or other adverse effect. in any Chse

described in subsection (l)(b); or

the extent ofthe loss or other adverse effect, in any case

described in paragraphs (a) and (b) of subsection (I).

(3) The amount paid to the Accountant-General in respect of an order under subsection (2) shall be paid by the

110 [No. ] The Banking Services Act, 2014 Accountant-General to such persons as the Court may direct the money to be paid, being persons (a) to whom the Court considers it just and equitable that the profits referred to in subsection 1 (a) should be paid; or (b) who have suffered the loss or adverse effect referred to in subsection (1 )(b). (4) For the purposes of subsections (2) and (3), the Court may make an order for the production to the Court of such accounting records and other information as the Court may require in order to- (a) establish whether any person has accrued profits as described in subsection (1)(a) and if so the extent of those profits; (b) establish whether any person has suffered loss or adverse effect as described in subsection 1 (b) and, ifso, the extent ofthat loss or adverse effect; or (c) determine how any amounts are to be paid or distributed under subsection (3). (5) An order under subsection (4) may (a) be directed at the person against whom the application under subsection (1) is brought or any other person whom there is reasonable grounds to believe is in possession ofthe accounting records 01: other information concerned; and (b) require any accounting records or other information supplied under subsection (4) to be verified in such manner as the Court may direct. (6) Nothing in this section affects the right ofany person other than the Supervisor to bring proceedings in respect of the matters to which this section applies so, however, that the Court may make such order as it thinks fit for the stay or consolidation of pi'OC«dings as the justice ofthe case requires.

The Banking Services Act, 2014 [No. ] III (7) A civil remedy for an act or omission is not affected by reason only that an order for restitution under this section has been made in respect ofthat act or omission. 125.--(1) For the purposes of this section, "restraint order" Restraint order, means an order- settlement (a). prohibiting any person from dealing with, including =e:~:ary removing from Jamaica, any property described in penalties. subsection (4) and held by a person specified inthe order; and (b) containing any directions or provisions as the Judge

considers appropriate for the preservation ofthe property

with respect to which the order is made.

(2) The Supervisor may apply to a Judge ofthe Supreme Court for a restraint order where- (a) an investigation has been started in Jamaica with regard

to criminal or civil proceedings for the contravention of,

or an offence under this Act or any regulations made under

this Act;

(b) criminal or civil proceedings for the contravention ofan

offence under this Act, or any regulations made under

this Act, have been commenced in Jamaica and have not

been concluded; or

restitution under section 124.

(3) The Judge of the Supreme Court may grant the application under subsection (2) ifthere are reasonable grounds to believe that any person has contravened or committed an offence under this Act, or any regulations made under this Act, and as a result (a) profits have accrued to the person as a result of the

contravention or commission; or

112 [No. ] The Banking Services Act, 2014 (b) one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention or commission. (4) A restraint order may provide that it applies to any property (a) obtained by the person against whom the order is sought as a result ofor in cqnnection with the contravention or commission ofan offence referred to subsection (3); or (b) which, in whole or in part, directly or indirectly represents, in the possession or control of the person against whom the order is sought, the value ofthe property referred to in paragraph (a). (5) A copy of the restraint order shall be served on the persons affected by the order, in such manner as may be prescribed by rules ofcourt. (6) An application to vary or discharge a restraint order may be made to a Judge ofthe Supreme Court by (a) any person who applied for the order; or (b) any person affected by the order. (7) Where any application is made under subsection (6), the Judge may vary or discharge the order. (8) The Supervisor may enter into an agreement or arrangement with any person against whom the Supervisor may take any action (a) under this Act, the Bank of Jamaica Act, or any regulations made under either Act; and (b) as concerns compliance with any provision of this Act or the terms or conditions of any licence or approval granted under this Act, for the settlement ofthe matter on such terms as are specified in the agreement or arrangement in accordance with subsection (9), instead ofany such action.

The Banking Services Act, 2014 [No. ] 113 (9) An agreement or arrangement for the purposes of subsection (8) shall be entered into in such form and manner as the Supervisor may determine from time to time and, without limit to the generality ofthe foregoing (a) may provide for the payment of a monetary penalty by

the person;

(b) shall state the breach in respect of which the penalty

referred to in paragraph (a) is payable;

provide for the payment by the person ofadditional sums

by way ofcompensation to any person on whose behalf

the Supervisor may institute proceedings under this Act;

(d) shall specify any other tenns or conditions to be complied

with by the person,

and a copy of the agreement shall be provided to the person concerned. (10) Upon the failure of the person to comply with any provision, term or condition of the agreement or arrangement, the Supervisor shall be entitled to do anyone or more ofthe following (a) tenninate the agreement or arrangement; (b) take any action, or pursue any remedy, available to him as if

the agreement or arrangementhad never been made; or

(c) treat as forfeited by the person any sums paid thereunder. (11) Ifon an application brought by the Supervisor in the Supreme Court, the Court is satisfied that any person has contravened such provision ofthis Act, or any regulations made under this Act, the Court may in respect ofeach contraventin exercise any ofthe powers referred to in subsection (12). (12) TheCourtmay (a) order the person to pay to the Crown such pecuniary

penalty, not exceeding one million dollars in the case of

114 [No. ] The Banking Services Act, 2014 an individual and not exceeding five million dollars in the case ofa person other than an individual; or (b) grant an injunction restraining the person from engaging in conduct constituting the contravention. (13) In exercising its powers under subsection (12), the Court shall have regard to (a) the nature and extent ofthe contravention; (b) the nature and extent ofany loss suffered by any person as a result ofthe contravention; (c) the circumstances ofthe contravention; and (d) any previous determination against the person against whom the powers are to be exercised. (14) The standard of proof in-proceedings under this
section, shall be the standard of proof applicable in civil
proceedings.
PART XXIV. Unclaimed Moneys
Unclaimed 126.-(1) Where, by any annual return required by section 82, moneys. it appears that any moneys have remained unclaimed in the possession or under the control ofa deposit taking institution for a period of fifteen or more years, the Minister shall cause a notice to be published in the Gazette and in a daily newspaper circulated in Jamaica (a) giving full particulars ofthe moneys so unclaimed; (b) stating the period during which the moneys have remained unclaimed; and (c) stating that unless, within one year from the'date ofthe first pUblication ofthe notice in the Gazette and on the website ofthe Ministry responsible for finance, a claim to those moneys is established to the satisfaction ofthe

The Banking Services Act, 2014 [No. ] 115 deposit taking institution concerned or~ failing that, to the satisfaction of a court of competent jurisdiction, the moneys will be dealt with in accordance with subsection (2), and the notice shall, during that year, be published twice or more often ifthe Minister thinks fit. (2) Subject to subsection (3), upon the expiration ofthe year referred to in subsection (1 Xc), any ofthe moneys to which the claim is established shall lapse to and become part ofthe revenues ofJamaica; and the Accountant-General shall keep a record ofall moneys that have remained unclaimed in the possession or under the control ofa deposit taking institution. (3) Where (a) a claim has been duly made but not determined during the

year; or

(b) before the expiration ofthe year the claimant lodges with

the Accountant-General, a certificate to that effect signed

by the Judge or Resident Magistrate, as the case may be,

subsection (2) shall not have effect in relation to the moneys in question until the claim is settled. (4) Any sum in respect of which subsection (2) takes effect shall be recoverable from the deposit taking institution as a debt due to the Government. (5) !Where subsection (2) takes effect as respects any sum~ then not later than fifteen years after the year referred to in that subsection, the Accountant-General shall pay that sum to any person who establishes a claim thereto to the satisfaction ofthe AccountantGeneral. (6) This section shall not apply to a building society.

116
Offences and penalties.
Seventh
Schedule.
Offence where no special penalty is provided.
Offence by body corporate.
Fixed penalties.
Eighth
Schedule.
[No. ] The Banking Services Act, 2014
PART XXV. Offences and Penalties
127.-(1) The offences specified in the first column of the Seventh Schedule shall incur the penalties specified in relation thereto in the second column ofthat Schedule. (2) The jursidiction of the Supreme Court to hear and determine offences under this Act shall be exercised by a Judge sitting without ajury and there shall be no preliminary examination or committal proceedings. (3) Where there are other charges arising out ofthe same facts and those other charges are indictable offences triable in the Supreme Court, an offence triable in the Resident Magistrate's Court under this Act may be tried in the Supreme Court by a Judge alone.
128. Every person who commits an offence under this Act or
any regulations made under this Act in respect ofwhich no special penalty is provided, shall be liable on summary conviction before a Resident Magistrate to a fine not exceeding two million dollars or to imprisonment for a term not exceeding six months or to both such fme and imprisonment.
129. Where an offence underthisActorany regulations made under
this Act, which has been committed by a company, is proved to have been committed with the consent orconnivance of, or to be attributable to any failure to exercise all reasonable diligence as ought to have beenexercisedinthe circumstancesto prevent the offence having regard to the nature ofhis functions and all the circustances ofthe case, on the
part ofany director or officer ofthe company, the director or officer of
the company as well as the company shall be liable to be proceeded against and punished accordingly. 130.-(1) This section shall apply to an offence specified in the Eighth Schedule. (2) The Supervisor may give to any person which he has reason to believe has committed an offence to which this section applies, a notice in writing in the prescribed form offering that person the opportunity to discharge any liability to conviction ofthat offence by payment ofafixed penalty under this section.

The Banking Services Act, 1014 [No. ] 117 (3) A person shall not be liable to be convicted for the offence ifthe fixed penalty is paid in accordance with this section and the requirement in respect ofwhich the offence was committed is complied with before the expiration ofthe fifteen days following the date ofthe notice referred to in subsection (2) or such longer period (ifany) as may be specified in that notice or before the date on which proceedings are begun, whichever event last occurs. (4) Where a person is given notice under this section in respect of an offence, proceedings shall not be taken against the person for that offence until the end ofthe fifteen days following the date of the notice or such longer period (if any) as may have been specified therein. (5) In subsections (3) and (4), "proceedings" means any criminal proceedings in respect ofthe act or omission constituting the offence specified in the notice under subsection (2) and "convicted" shall be construed in like manner. (6) Payment of a fixed penalty under this section shall be made to the Collector of Taxes and in any proceedings, a certificate that payment ofa fixed penalty was or was not made to the Collector ofTaxes by a date specified in the certificate shall, if the certificate purports to be signed by the Collector ofTaxes. be admissible as evidence ofthe facts stated therein. (7) A notice under subsection (2) shall (a) specify the offence alleged; (b) give such particulars ofthe offence as are necessary for

giving reasonable information ofthe allegation;

(c) state
(i) the period (whether fifteen days or a longer period) during which, by virtue ofsubsection (4), proceedings will not be taken for the offence; and (ii) the amount of the fixed penalty and th~ Collector of Taxes to whom and the address at which it may be paid.

118
Eighth
Schedule.
Regulations.
[No. ] The Banking Services Act, 2014 (8) The fixed penalty for the offences specified in the Eighth Schedule shall be the penalty specified therein in relation to such offences. (9) In any proceedings for an offence to which this section applies, no reference shall be made after the conviction ofthe accused to the giving ofany notice under this section or to the payment or nonpayment of a fixed penalty thereunder unless in the course of the proceeding"! orinsome doctnnentwhichisbeforethe courtin connection with the proceedings, reference has been made by or on behalf ofthe accused to the giving ofsuch a notice, or, as the case may be, to such payment (10) The Minister may, by order, subject to affirmative resolution make provision as to any matter incidental to the operation ofthis section, and in particular, any such order may prescribe (a) the form ofnotice under subsection (2) and the Collector ofTaxes to whom a fixed penalty is payable; (b) the nature of the information to be furnished to the Collector ofTaxes along with any payment; (c) the arrangements for the Collector ofTaxes to furnish to the Supervisor, information with regard to any payment under a notice under this section.
PART XXVI. General
131.-(1) The Supervisory Committee may, with the approval ofthe Minister, make regulations for the purpose ofgiving effect to the provisions ofthis Act and, without prejudice to the generality ofthe foregoing, regulations may make provision in relation to (a) licence fees; (b) amalgamations and transfers; (c) capital adequacy; (d) reducing the limits specified in Part XU; (e) banking business through agent arrangements under Part XXI;

The Banking Services Act, 2014 [No. ] 119 (f) the days on which and the hours during which deposit taking institutions shall be opened or closed; (g) the establishment ofbranches or representative offices (i) in Jamaica; or (ii) otherwise than in Jamaica by deposit taking institutions; (h) requirements to be met by external auditors oflicensees; (i) risk management measures for financial groups; and G) any other matter required by this Act to be prescribed. (2) Regulations made under subsection (1) s~ll be subject to affirmative resolution. 132.-(1) The Supervisory Committee may make rules for the Supervisory operation oflicensees, to be known as ''the Supervisory Rules", in ::d relation to-- conduct. (a) a licensee's risk management framework to address material risks; (b) money laundering, terrorism financing and the proliferation ofweapons ofmass destruction; (c) problem assets and provisioning requirements; (d) preparation and presentation of prudential returns and reporting requirements; (e) prudential accounting and computation standards and disclosure requirements; (f) prudential liquidity requirements; (g) corporate governance functions and arrangements; (h) prudential obligations for financial holding companies; (i) valuation of assets and liabilities oflicensees; G) payment ofdividends by deposit taking institutions and the transfer ofprofits to capital base by licensees;

120 [No. The Banking Services Act, 2014 (I) the forms for applications and notices and other such matters as may be specified under this Act; (m) outsourcing ofkey aspects ofa licensee's operation; (n) loan sales and other asset securitization; or (0) such other matters as the Supervisor considers necessary for the administration ofthe Act. (2) The powers conferred upon the Supervisor by subsection (1) shall be exercised after consultation with licensees and persons who, in the opinion of the Supervisor, are relevant stakeholders. (3) The Supervisory Rules shall be subject to affirmative resolution. (4) The Supervisor may (a) issue codes of conduct pertaining to the operations of licensees; (b) issue a code ofconduct on consumer related matters and, without limiting the generality ofthe foregoing, the code may provide for the following (i) the obligation to provide customers with reasonable notice offees and charges, terms and conditions and changes thereto; (ii) customers access to their information at a reasonable cost; (iii) requiring any interest rate, however described by the licensee, to be also expressed as an effective annual rate, and to be calculated in a standard manner across the banking services industry; (iv) the obligation to keep language in contracts with customers simple and clear, and ensure

The Banking Services Act. 2014 [No. ] 121 that key terms, such as rates, terms, fees and payment dates, are clearly identified for the customer's attention; (v) the establishment ofeffective mechanisms to address customer complaints; (vi) communication of customer complaint mechanisms and procedures to customers; (vii) reporting and record keeping obligations in relation to customer complaints and resolutions within the times and in the formats specified by the Supervisor; (viii) the format, frequency, and deadlines in respect ofinformation to be provided to the Supervisor for the administration ofthe code of conduct; or (ix) any other matter as the Supervisor thinks necessary. (5) The power conferred on the Supervisor by subsection (4) shall be exercised after consultation with organizations recognized by the Supervisor as representing deposit taking institutions and with respect to subsection (4)(b) the Consumer Affairs Commission and such other persons who, in the opinion of the Supervisor, are relevant stake holders. (6) A breach of the Supervisory Rules or of a code of conduct may constitute grounds for the issue of directions by the Supervisor under this Part. (7) A licensee that does not comply with a direction given by the Supervisor under this Part commits an offence. (8) A contravention ofany direction imposed under this
Part shall not invalidate any transaction.
(9) No proceedings or determination made under a code of conduct shall affect any right of any party to enforce any claim under the contractual arrangements between the parties.

122 [No. ] The Banking Services Act, 2014 (10) A person aggrieved by the decision of the Supervisor to issue a direction under a code ofconduct may appeal to the Supervisory Appeals Board, in writing. Regulations 133.-(1) Notwithstanding the provisions ofsection 29 ofthe may provide Interpretation Act, regulations made under section 131, the for greater penalties. Supervisory Rules made under section 132 (1) or a code ofconduct made under section 132(4) may prescribe greater penalties than those specified in that section, so, however, that the maximum penalty that may be imposed shall be a fine not exceeding two million dollars or a term ofimprisonment not exceeding six months or both such fine and imprisonment. (2) Regulations made under section 131 or 132 may provide for fixed penalties not exceeding one and one-half times the maximum monetary penalty payable thereunder. Secrecy of 134.-(1) Subject to subsection (2) officials. (a) no officer of any licensee, agent or any other person having access to information on customers; and (b) no person who, by reason of his capacity, office, employment or other relationship with the licensee, has by any means access to- (i) the records ofthe licensee; or (ii) any registers, correspondence or material with regard to the account ofany customer of a deposit taking institution, while his office, employment in or, as the case may be, his professional relationship with the licensee continues or aftertbe termination thereot:
shall give, divulge or reveal any information regarding the money or other relevant particulars ofthe account ofthat customer. (2) Subsection (1) shall not apply in any of the Ninth circumstances specified in the Ninth Schedule.
Schedule.
(3) A person who contravenes subsection (1) commits an offence.

The Banking Services Act, 20 J4 [No. ] 123 (4) Any person to whom information is disclosed pursuant to this Act, other than a person to whom information is disclosed under paragraph ( C) or (d) ofthe Ninth Schedule, shall Ninth

th h . _S!.' d nfid 'al Schedule. regard and deal WI suc lluormatton as secret an co ent!.
(5) A person referred to in subsection (4) commits an offence if the person at anytime communicates or attempts to communicate any information disclosed under this Act otherwise than pursuant to (a) the performance ofhis fimctions under this Act; (b) the perfonnance ofhis fimctions under any other enactment;

(c) a court order.
135. No civil or criminal action, suit or other proceedings may Protection of
persons be brought against any person who, in good faith, provides or providing transmits any document or other information to the Supervisor or infurmation under this Act. an authorized officer as may be required under this Act or any regulations made under this Act.
136. The Ministermay by order, subject to affirmative resolution, Minister may
amend-- amend monetary

sed' thi A penalties and ( ) a any monetary pe nalty tmpo m s ct; or certain
Schedules.
(b) the Schedules to this Act (other than the non-monetary

penalties and the Tenth and Eleventh Schedules).

A review ofthis Act shall be conducted no later than seven ReviewofAct.
years after the commencement date by a committee ofboth Houses ofParliament appointed for the purpose. 138.-(1) The Banking Act and the Financial Institutions Act Repeal. are repealed. (2) Sections 8A, 8B, 9A, 9B, 9C, 17, 39A, 39B, 75A, 75B, 75C, 75D, 75E, 75F, 76,77, 78, 79,80,81, 82, 83,84, 85 and the Eighth Schedule to the Building Societies Act, are repealed.

124
Saving of regulations made under repealed Acts.
Duty to notifY regulator and
]DIe in certain cases.
Power of licensee to enforce transactions .
Amendmentof
Banko!
Jamaica Act.
Tenth
Schedule.
Transitional arangements.
[No. ] The Banking Services Act, 2014 (3) The Bank ofJamaica (Building Societies) Regulations, 1995, are revoked.
139. Notwithstanding the repeal of the Banking Act and the
Financial Institutions Act (in this section referred to as "the repealed enactments") regulations made under the repealed enactments, as in force immediately before the repeal ofthoseActs (a) shall remain in full force and effect, with such changes as may be necessary, as ifmade under this Act; and may be amended or revoked accordingly; and (b) any reference in any other enactment to specific provisions of the repealed enactments shall be construed as a reference to the equivalent provision ofthis Act.
140. Where in the exercise of the Supervisor's powers under
this Act, a company that is regulated by another regulator is likely to be affected, that regulator shall be consulted and, where it is likely to impact a company that takes deposits that are insured with the Jamaica Deposit Insurance Corporation, the Corporation shall also be notified.
141. Notwithstanding anything to the contrary, where a
transaction is entered into by a licensee, whether before or after the relevant date, in contravention ofany provision ofthis Act, nothing in this Act shall prevent the licensee from enforcing the transaction against the person or party thereto.
142. The provision of the Bank ofJamaica Act referred to in
the first column ofthe Tenth Schedule is amended in the manner specified in relation thereto in the second column ofthat Schedule.
PART XXVII. Transitional Arrangements
143.-(1) In this section, "the repealed enactments" means the Banking Act, the Financial Institutions Act, the provisions ofthe Building Societies Act set out in section 136(3) and the Bank of Jamaica (Building Societies Regulations) 1995, in force immediately prior to the appointed day.

The Banking Services Act, 2014 [No, ] 125 (2) Any company that immediately prior to the commencement date was licensed as a bank or merchant bank or building society, as the case may be, under the repealed enactments (hereinafter referred to as an "existing bank or merchant bank or building society") shall, subject to the provisions of this Act, be deemed to be licensed under section 22 ofthis Act as ifthat section were in force at the date on which any such licence was granted. (3) Any existing deposit taking institution which, before the commencement date, has entered into any transaction which did not contravene any of the repealed enactments but which is incompatible with sections 57 to 63 (a) shall, within three months after the commencement date,

submit to the Supervisor, a statement giving particulars

ofthe transaction as is in operation at that date; and

(b) shall submit a programme to the Supervisor for rectifying

the incompatibility ofthe transaction after that date or, as

the case may be, for the termination of the transaction

within such period as may be agreed between the "existing

bank or merchant bank or building society" and the

Supervisor, or, in default of agreement, as may be

determined by the Supervisor.

(4) Any licensee whose current ownership or governance structure or other operational arrangements are not in compliance with the requirements ofthis Act shall provide within three months after the commencement date, a programme for bringing the licensee into compliance within such period as may be agreed with the Supervisor, or as the Supervisor may specify.
144. The enactments specified in column 1 of the Eleventh Consequential
d d · th 'fi d' I' th . amendment of S C hedul e are amen e e In manner SpeCI Ie In re atlon ereto In enactments. column 2 ofthat Schedule. Eleventh
Schedule.

126 [No. ] The Banking Services Act, 2014 FIRST SCHEDULE (Section 2) Meaning of TIer J and Tier 2 Capital

Subject to paragraphs 2,3,4 and 5, in this Act
"Tier I capital" means the amount derived from the application of the following formula:
Tier 1 capital (A+B+C+D+E) - (F+G+H) where the expressionA means paid-up capital in the form ofordinary shares or stock or capital shares; B means paid-up capital in the form ofnon-redeemable, non-cwnulative preference shares; C means the permanent capital fund, in the case of a mutual building society; D means eligible reserves as defined under section 2; E means capital raised from an issue ofshares referred to in A or B, or having terms acceptable to the Supervisor, to a government company or undertaking in the circwnstances specified in paragraph 4; F means any net loss arising from the aggregate of (a) any undistributed profits or accwnulated losses for prior financial years; (b) any financial year to date profit or loss; and (c) any loss positions on revaluation reserves arising from fair value accounting for financial assets and liabilities; and (i) ifthe aggregate of(a), (b) and (c) is a net loss, the expression F shall be treated as a positive in applying the above formula; and (U) ifthe aggregate of(a), (b) and (c) is a net surp~us. the expression F shall be treated as zero;

The Banking Services Act, 2014 [No. ]. 127 G means any goodwill, start-up expenses and other intangible assets; and H means any other deduction designated by the Supervisor by notice published in the Gazette, and for the avoidance of any doubt, in relation to the expression F (i) the amount of any net loss referred to therein shall be expressed as a positive number in applying the above formula; and (ii) if the aggregate of (a) (b) and (c) is a net surplus, the expression F shall be treated as zero; and "Tier 2 capital" means the aggregate of (a) paid-up capital in the form of non-redeemable cumulative preference shares; (b) paid-up capital in the form of redeemable preference shares or, in the case of a mutual building society, deferred shares, in either case having an original term to maturity of five years or more; (c) subordinated debt issued to a Government agency or company wholly owned by the Government in the circumstances specified in paragraph 4; (d) general provisions for loss, up to a maximum of one and one-quarter per centum ofthe licensee's risk weighted assets.
2. In relation to paragraph (b) of the definition of "Tier 2
Capital", where the outstanding term of the preference shares or deferred shares is less than five years, the amount thereof to be treated as Tier 2 Capital shall be reduced in the manner prescribed.
3. Notwithstanding paragraph (b) ofthe definition of "Tier 2
Capital", as regards a building society that had deferred shares outstanding as at the commencement date, ifthose deferred shares were treated as Tier 2 Capital immediately prior to the commencement date, they shall continue to be treated as Tier 2

128 [No. ] The Banking Services Act, 2014 Capital, and the amount thereof shall be reduced as in the manner prescribed.
4. The circumstances referred to in expression E .of the
definition ofTier I capital and sub--paragraph (c) ofthe defmition ofTier 2 capita] in paragraph 1 are that the shares or subordinated debt have been issued under an agreement or arrangement for the provision of financial assistance to the licensee for the purpose of its restructuring.
5. The Supervisor, may, after review of all of the terms and
conditions applicable to any particular capital component used by a licensee in its calculation of Tier I capita) or Tier 2 capita), determine that, notwithstanding that component's name or description, the component shall be excluded from the computation ofthe licensee capital base, or included in a different tier; and the determination of the Supervisor shaH be final and binding.

The Banking Services Act, 2014 [No. ] 129 SECOND SCHEDULE (Section 6(2» The Supervisory Commitee 1.-(l) The Supervisory Committee shall Constitution of Supervisory consist of five persons three of whom shall be Conunitb:e. ex-officio members and two of whom shall be

appointed members.

(2) The following persons shall be ex

officio members ofthe Supervisory Committee (a) the Supervisor, who shall be the chairman; (b) the Deputy Supervisor; and (c) a member of the senior executive staffof the Bank with responsibility for financial stability oversight. (3) Subject to paragraph 2, the appointed

members shall be two persons
(a) who are not employed to the Bank; and (b) selected from persons appearing to the Minister to have experience or knowledge in banking business, administration, commercial law, finance or the regulation offinancial services. (4) The appointed members shall be

appointed by the Governor-General on the advice

of the Minister after consultation with the

Supervisor.

2.-( I) The following persons shall not be Disqualificaton. eligible for appointment to the Supervisory Committee (a) members of the House of Representatives or the Senate; (b) members of the Council of the Kingston and St.Andrew Corporation or any Municipal Council or any Parish Council;

130 [No. ] The Banking Services Act, 2014 TemporlU)' appointment. Vacancy. Tenure of Office. (c) public officers; (d) directors, officers, employees or external auditors ofa licensee or the connected persons in relation to the licensee; and (e) any person who has a direct or indirect proprietary interest in a licensee or a connected person in relation to the licensee. (2) A person shall not be appointed to the Supervisory Committee unless (a) the person has forwarded to the Minister a voluntary declaration declaring that he is not ineligible for appointment Wlder paragraph (2) (l); (b) the proposed appointee is confirmed by the Supervisor to be a fit and proper person and that such person is a person whose appointment will not raise an issue of conflict of interest or Wldue influence. (3) An appointment made in contravention of paragraph (2) shall be void.
3. If the chairman of the Supervisory
Committee is absent or Wlable to act, the Deputy Supervisor shall act as chairman for that meeting in accordance with section 34B(4)(c) ofthe Bank ofJamaica Act.
4. Where a vacancy occurs in the appointed
membership of the Supervisory Committee, the vacancy shall be filled by the appointment of another appointed member in accordance with this
Schedule.
5.-(1) The appointment of an appointed member of the Supervisory Committee shall be evidenced by instrument in writing and the

The Banking Services Act, 2014 [No. ] 131 appointment shall be for a period not exceeding three years. (2) Every appointed member of the

Supervisory Committee shall be eligible for

reappointment.

(3) Subject to paragraph (4), the

Governor-General, on the advice ofthe Minister

may, at any time, revoke the appointment of an

appointed member ofthe Supervisory Committee.

(4) The appointment of an appointed

member of the Supervisory Committee may be

revoked for
(a) physical or mental infmnity;
(b) bankruptcy or compounding with or suspending payment to his creditors; (c) being charged with or convicted for an offence involving dishonesty; (d) failing to carry out the functions required ofa member ofthe Supervisory Committee; (e) engaging in activities that can be reasonably considered to be incompatible with continued membership of the Supervisory Committee; or (f) ceasing to be eligible for continued membership on the Supervisory Committee in accordance with this
Schedule.
6. An appointed member ofthe Supervisory Resignation.
Committee may, at any time, resign his office by instrument in writing addressed to the GovernorGeneral and delivered to the chairman for transmission to the Governor-General through the Minister; and from the date of the receipt of of such instrument such appointed member shall cease to be a member of the Supervisory Committee. ~--~-~---------------------

132 [No. ]
Publication of membership.
Authenticationof documents.
Procedure.
Ranuneralion.
The Banking Services Act, 2014
7. The names of the members of the Supervisory
Committee as first constituted and every change in the membership of the Committee shall be published in the Gazette.
8. All documents made by the Supervisory Committee may
be signed under the hand ofthe chairman or any member of the Supervisory Committee authorized, in writing, to act on behalf of the Chairman. 9.-{1) The Supervisory Committee shall meet at such times as may be necessary or expedient for the transaction of business and such meetings shall be held at the Bank and at such times and on such days as the Supervisory Committee may determine. (2) The chairman or any other person appointed to act temporarily as chairman shall preside at meetings of the Supervisory Committee. (3) The decisions ofthe Supervisory Committee shall be by a majority of votes ofthe members and, in addition to an original vote, the chairman shall have a casting vote in any case in which the voting is equal. (4) Subject to the provisions of this Act, the Supervisory Committee may regulate its own proceedings. (5) Proper records ofall proceedings ofthe Supervisory Committee shall be kept and the Bank shall provide administrative support to the Supervisory Committee.
10. There shall be paid to the appointed members of the
Supervisory Committee such remuneration (whether by way of honorarium, salary or fees) and such allowances as the Bank may determine.

The Banking Services Act, 2014 [No. ] 133 Disclosure of interest. Office of member not a publicoffice.
11. Any member of the Supervisory
Committee who has any interest, directly or indirectly, in any matter brought before the Supervisory Committee- (a) shall disclose the nature ofthe interest to the Supervisory Committee; and (b) shall not take part in any deliberations or decisions of the Supervisory Committee with respect to that matter.
12. The office of an appointed member ofthe
Supervisory Committee shall not be a public office for the purposes of Chapter V of the Constitution Jamaica.

134 [No. ] The Banking Services Act, 2014 THIRD SCHEDULE (Section 20(a» Matters in relation to which the Supervisory Committee shall have regard in determining whether to grant a licence to operate as a deposit taking institution or function as a financial holding company PARrA In considering an application under section 19, the Supervisory Committee shall have regard to the following mattersI. The validity and sufficiency ofdocuments submitted in support of the application.
2. The incorporation of the applicant.
3. The transparency ofthe ownership structure or legal arrangements
concerning the applicant and the group.
4. The ability of the Supervisor to independently verifY the identity
of the ultimate natural beneficial owner, who, whether alone or jointly with another, exerts control or effective control and if no individual exerts control or effective control through ownership interests, information to identifY the individuals exerting control or effective control through other means or in their absence, the directors or officers or both.
5. The ability of the applicant to carry on its business or proposed
business in a prudent manner.
6. The business plan, feasibility study and other financial projections
including any special areas of business in which the applicant expects to engage.
7. The applicant's financial resources and the source of those
resources, including capacity of the applicant to satisfY the capital requirements to support establishment and operations.
8. The applicant's history and known performance.
9. Whether every director, officer, substantial shareholder and key
employee of an applicant, is a fit and proper person.
10. The suitability and adequacy of the legal, managerial and
operational structure of the group, including the nature of the services offered, the strength of the financial performance of the members of the group which will include the deposit taking institution or financial holding company, and whether the structure will hinder or impede the effective supervision of the deposit taking institution on either astandalone or a consolidated basis.

The Banking Services Act, 2014 [No. ] 135
11. If the applicant is a foreign bank or a subsidiary of a company
registered or incorporated outside Jamaica, the application shall be subject to (a) the prior approval ofor non-objection from the regulator in the respective foreign country in which the foreign bank or company is registered or incorporated; and (b) the law and regulatory requirements ofthe applicant's home jurisdiction that relate to (i) the recognition of the regime set out in section 122 in the event of the insolvency of the applicant; (ii) the· disclosure by.the applicant of fmancial and other information of the kind that a licensed deposit taking institution shall disclose under
section 82;
(iii) the accounting and auditing standards applicable to the applicant; (iv) the functions of the directors of the applicant; and (v) the licensing, registration, authorization, and supervision of the applicant; (c) the adequacy of the supervisory standards applied by the regulator in the home jurisdiction of the foreign bank or parent company, including the powers and willingness of that regulator to share information. and cooperate with the Supervisor; (d) the capacity and authority ofthe management ofthe branch operations proposed to be established in Jamaica to address regulatory concerns regarding the local branch operations.
12. The adequacy ofthe proposed
(a) systems ofcorporate governance, the policies ofwhich should inter alia expressly address the role of the Board, accountability and transparency requirements for the Board and for the management of the applicant, including the remuneration of director and officers;

136 [No. ] The Banking Services Act. 2014 (b) internal controls of the applicant and the financial group; (c) risk management systems and policies which, at a minimum mandate the routine identification and mitigation ofthe risks to the safety and soundness ofthe deposit taking institution, including the risks of services being used to commit or facilitate a fmancial crime or to avoid or breach a statutory obligation.
13. Such other matters and information as the Supervisor deems
appropriate.
NOTE: A reference in this Schedule to Board includes a reference to a board ofmanagement or such other governing body established under
section 31 of this Act.
PARTB
Slinimum Start-up Capital
1.-(1) A licence shall not be granted under this Act in the category of bank or merchant bank unless the bank has capital of an amount of not less than two hundred million dollars or such other amount as the Supervisor may prescribe. (2) A licence shall not be granted to operate a branch ofa foreign bank in Jamaica unless the foreign bank has an assigned capital for the proposed branch operation of an amount of not less than two hundred million dollars or such other amount as the Supervisor may prescribe in the Supervisory Rules. (3) A licence shall not be granted to a building society unless the applicant has capital of an amount ofnot less than one hundred million dollars or such other amount as the Supervisor may prescribe in the Supervisory Rules. (4) Further capital requirements may be imposed on applicants where this is considered necessary to ensure that there is sufficient minimum capital to cover the proposed activities of the applicant. PARTe Head Office A licence shall not be granted to any company"having its head office outside Jamaica unless the company designates and notifies to the Supervisor of (a) a principal office in Jamaica; (b) one of its officers who is to be the company's authorized agent in Jamaica; and

The Banking Services Act, 2014 [No. 137 (c) another ofits officers who is to be the company's authorized

agent in Jamaica, in the absence or inability to act of the

officer named under paragraph (b) to act, is to be the

company's authorized agent in Jamaica.

FOURTH SCHEDULE (Section 27(2»
Constitution and Procedures of

Supervisory Appeals Board

l.---{l) Subject to sub-paragraph (2), the Supervisory Appeals Board Constitution of Supervisory shall consist of not less than three or more than five members appointed Appeals Board. by the Governor-General on the advice of the Minister. (2) The Supervisory Appeals Board shall be selected from persons

appearing to the Minister to be knowledgeable and experienced in

matters relating to law, banking, finance or the regulation of financial

services and otherwise qualified for appointment to the Appeals Board

and of which at least one member shall be a retired judge.

2.---{1) The following persons shall not be eligible for appointment DiSquaiiticato the Supervisory Appeals Board- tion. (a) members ofthe House of Representatives or the Senate; (b) members of the Council of the Kingston and St. Andrew

Corporation, or of any Municipal Council or of any Parish

Council;

licensee or connected persons in relation to the licensee;

and

(e) any person who has a direct or indirect proprietary interest in a

licensee or in a connected person in relation to the licensee.

(2) The appointment of a member of the Supervisory Appeals

Board shall not proceed unless the proposed appointee is determined

to be a fit and proper person with the appropriate level ofindependence

and a person whose appointment will not raise an issue of conflict of

interest or undue influence from within the public or private sector.

(3) The members ofthe Supervisory Appeals Board shall appoint

one of their numbers to be the chairman.

(4) An appointment made in contravention of sub·paragraph (1) shall be void.

138
Temporary appointment
Tenure of office.
[No. The Banking Services Act, 2014
3. If the chainnan of the Supervisory Appeals Board is absent or
unable to act the other sitting members may appoint one oftheir numbers to act as chainnan for that meeting.
4. Where a vacancy occurs in the membership of the Supervisory
Appeals Board, it shall be filled by the appointment of another member in accordance with this Schedule. 5.-(1) The appointment ofevery member ofthe Supervisory Appeals Board shall be evidenced by instrument in writing and shall be for a period not exceeding two years. (2) Every member of the Supervisory Appeals Board shall be eligible for reappointment. (3) Subject to sub-paragraph (4). the Governor-General on the advice of the Minister may, at any time, revoke the appointment of a member ofthe Supervisory Appeals Board. (4) The appointment of a member of the Supervisory Appeals Boatd may be revoked for (a) physical or mental infirmity; (b) bankruptc) or compounding with or suspending payment to his creditors; (c) being charged with or convicted for an offence involving dishonesty or anyone or more of the offences listed in the Second Schedule to the Proceeds ofCrime Act; (d) no longer meeting the requirement ofbeing 'fit and proper'; (e) engaging inactivities that can be reasonably considered prejudicial to the interest ofthe Supervisory Appeals Board. (5) If a person ceases to be eligible for appointment to the Supervisory Appeals Board his appointment shall be revoked from the date on which the person c~ed to be eligible. 6.-(1) The chainnan may, at any time, ~sign his office by instrument . in writing addressed to the Governor-General and such resighation shall take effect as from the date of the receipt of such instrument by the Governor-General.

The Banking Services Act, 2014 [No. ] 139 (2) Any member of the Supervisory Appeals Board, other than the chairman, may, at any time, resign his office by instrument in writing addressed to the Governor-General and transmitted through the chairman and the Minister; and from the date of the receipt by the Minister of the instrument, the member shall cease to be a member of the Supervisory Appeals Board.
7. The names of the members of the Supervisory Appeals Board as Publicationof
first constituted and every change in membership thereof shall be membership. published in the Gazette. S. All documents made by, and all decisions of, the Supervisory Authentication Appeals Board may be signed under the hand of the chairman or any ofdocuments. member of the Supervisory Appeals Board authorized in writing, to act on behalf of the chairman.
9. -(I) The Supervisory Appeals Board shall meet at such times as Proced\lle of
may be necessary or expedient for the transaction of business and the =~. meetings shall be held at the places and times and on the days as the

Supervisory Appeals Board may determine.

(2) The chairman or any other person appointed to act temporarily

as chairman shall preside at meetings ofthe Suptrvisory Appeals Board.

(3) Subject to paragraph 1(1), the decisions of the Supervisory Appeals Board shall be by a majority of votes of the members hearing the appeal; and in addition to an original vote, the chairman shall have a casting vote in any case in which the voting is equal. (4) The Supervisory Appeals Board.. may make rules to regulate

its proceedings.

(5) Proper records ofall proceedings ofthe Supervisory Appeals

Board shall be kept and the Bank shall provide administrative support

to the Appeals Board.

There shall be paid to the chairman and other members of the Rcrnuncraaion
Supervisory Appeals Board such remuneration (whether by way of ofmembcrs. honorarium. salary or fees) and such allowances as the Minister responsible for finance may determine.
II. No action, suit, prosecution or other proceedings shall be brought Protection of
or instituted personally against any member of the Supervisory Appeals manbcrs. Board in respect ofan act done by the member bonafide in pursuance or execution or intended execution ofthe provisions ofthis Act.

140 [No. ] The Banking Services Act, 2014 DisC\OSUle of interest. Board may co opt persons. Witnesses. Costs. Office of member not a public office.
12. Any member of the Supervisory Appeals Board who has any
interest, directly orindirectly, in any matter brought before the Supervisory Appeals Boarci (a) shall disclose the nature of the interest to the Supervisory Appeals Board; and (b) shall not take part in any deliberations or decisions of the Supervisory Appeals Board with respect to that matter.
13. For the purpose of hearing an appeal, the Supervisory Appeals
Board may co-opt any person appearing to it to have the requisite expertise to advise the Board, once the Board is satisfied that the person has no pecuniary or non-pecuniary interest in the matter being considered by the Board.
14. The Supervisory Appeals Board shall have power to summon
witnesses and compel their attendance and such witnesses, if the Supervisory Appeals Board agrees, may give their evidence by affidavit
15. The Supervisory Appeals Board may order one party to any appeal
proceedings to pay the costs of the other party as well as those of the Supervisory Appeals Board as determined by the Supervisory Appeals Board and the costs ifnot paid by the party as ordered, may be recovered by suit brought in a Resident Magistrate's Court as a civil debt due to the party in whose favour the Supervisory Appeals Board has ruled, notwithstanding any limit set on the sums that may be claimed in a Resident Magistrate's Court.
16. The office ofthe chairman or member ofthe Supervisory Appeals
Board shall not be a public office for the purposes of Chapter V ofthe Constitution.

The Banking Services Act, 2014 [No. ] 141 FIFTH SCHEDULE (Sections 109 and 112) PARTA Conditions Subject to Remedial Action
I. The licensee has breached the provisions of its incorporating
documents.
2. The licensee, a director or any person employed (either as agent or
otherwise)
(a) is engaging or is about to engage in an unsafe or unsound practice in undertaking the functions of a fmancial holding company or in conducting banking business; or (b) is contravening or has contravened (i) a provision of this Act or any regulations made under this Act; (ii) a condition ofthe licence granted under this Act in respect of that licensee; (iii) a standard of sound practice; (iv) a provision of the Bank ofJamaica Act or any regulations made under that Act; or (v) a provision of the Proceeds ofCrl",e Act, the Te"orism Prevention Act, the United Nations Security Council Resolutions Implementation Act or regulations made under any ofthose Acts or any other enactment imposing obligations on the licensee.
3. The licensee's capital levels fall below the prescribed minimum
levels.
4. A substantial shareholder, director, officer or key employee has
ceased to be a fit and proper person in accordance with this Act and the licensee bas refused or neglected to take appropriate action.
5. A final judgment has been obtained against the licensee and has
remained unsatisfied for at least one month.
6. The licensee
(a) has given false or misleading information in its application for a licence;

142 [No. ] The Banking Services Act. 2014 (b) in the case of a deposit taking institution, has continued to take deposits in violation of a direction; (c) has given faIse statements concerning its affairs; (d) refuses or neglects to make returns or to produce books, records or documents to an authorized officer; or (e) refuses to permit inspection ofthe licensee by an authorized officer.
7. The licensee is contravening, has contravened or is about to
contravene, any cease and desist order or any directions issued by the Supervisor under this Act. S. The licensee has ceased to be viable within the meaning ofsection 113.
9. The licensee has notified the Supervisor that it proposes to surrender
its licence.
10. The licensee in the case of a deposit taking institution has ceased
to carry on banking business.
11. Proceedings have commenced for the voluntary or compulsory
winding up of the licensee.
PARTB
Cease and Desist Orders

Before issuing a cease and desist order, the Supervisor shall serve
on the licensee, a notice-
(a) containing a statement ofthe matters constituting the alleged unsafe or unsound practice or alleged contravention and, where appropriate, the name of the person against whom the allegation is made; (b)· specifying a date by which the licensee shall make representation in writing to the Supervisor on the matter, to allow for a determination as to whether a cease and desist order should be made.
At any time after the date specified in sub-paragraph (1)(b), the
Supervisor, having considered a representation if any, may make the order on such terms as he sees fit or take such action in accordance with his powers under this Act as is necessary.

The Banking Services Act, 2014 [No. ] 143
3. lfno representation is made by the date specified in sub-paragraph
( 1 Xb), that licensee shall be deemed to have accepted the allegations stated in the notice referred to in paragraph I and to have consented to the making of a cease and desist order and the Supervisor shall make a cease and desist order in respect of that licensee.
4. Where the allegations specified in such notice are established in
relation to the licensee, the Supervisor shall make a cease and desist order in respect of that licensee, and a copy ofthe order shall be served on the licensee and where appropriate, on the person named in the notice under paragraph I (a). S. A cease and desist order shall (a) require the licensee concerned or the person concerned, as

the case may be, to cease and desist from the actions giving

rise to the making of the order; and

(b) take effect as from such date as may be specified therein or,

ifmade under paragraph 3, take effect from the date ofservice

of the notice.

Where in relation to a licensee>
(a) a notice has been served under paragraph I; and (b) at any time prior to the date specified in the notice issued at

paragraph I t the Supervisor is satisfied that the situation

giving rise to the notice is likely to endanger the financial

position of the licensee, the fmancial group or the interests

of its depositors,

the Supervisor may, forthwith. serve on that licensee and on any person named in the notice, a cease and desist order which shall take effect at any time prior to the date specified in the notice, from the date of such service. PARTe Temporary Management ofa Licensee l.-{l) For the purposes of sections III and 112. the Supervisor shall serve on the licensee concerned, a notice announcing his intention to assume the temporary management of the licensee from such date and time as may be specified in the notice. (2) If the Supervisor considers it necessary, the notice under

sub-paragraph (I) may provide that the assumption of temporary

management shall take effect immediately.

144 [No. ] The Banking Services Act, 2014 (3) The Supervisor may appoint any person to manage on his behalf, the licensee specified in a notice under sub-paragraph (1). (4) A copy of the notice under sub-paragraph (1) shall be (a) sent to the Registrar of the Supreme Court; (b) . posted in a conspicuous position at each place ofbusiness of the licensee; and (c) published at least twice in a newspaper circulated in Jamaica. (5) Upon the date and time specified in the notice under subparagraph (1), there shall vest in the Supervisor, full and exclusive powers of management and control of the licensee, including, without prejudice to the generality of the foregoing, power to (a) continue or discontinue its operations; (b) stop or limit the payment of its obligations; (c) employ any necessary officers or employees; (d) execute any instrument in the name of the licensee; (e) initiate, defend and conduct in the name ofthe licensee, any action or proceedings to which the licensee may be a party. (6) All expenses ofand incidental to the temporary management of a licensee shall be paid by such licensee in such manner as the Supervisor may determine.
2. The assumption oftemporary management under this Act shall
have the effect ofstaying
(a) the commencement or continuance ofany proceedings by or against the licensee for such period as the court thinks fit; or (b) any execution against the property of the licensee. 3.-(1) Subj~ct to sub-paragraph (2), a person alleging a particular hardship from the effect of the stay granted under paragraph 2 may apply to the Court, with notice to the Supervisor, for relief, and the Court may make such order in relation to the stay as it thinks fit.

The Banking Services Act, 2014 [No. ] 145 (2) In exercising its powers under sub-paragraph (I), the Court shall treat as paramount the following considerations (a) the interest of the licensee's depositors generally; and (b) the preservation of financial system stability. 4.-{1) Where a temporary manager has been appointed by the Supervisor in accordance with this Schedule, the Supervisor may (a) restore the licensee to its board of directors or owners, as

the case may be;

(b) propose a compromise or arrangement between the licensee

and its creditors under section 206 ofthe Companies Act or

a reconstruction under section 208 ofthat Act.

(2) The Supervisor shall, within sixty days of his appointment and each successive sixty days thereafter, produce a report to the Supervisory Committee on the affairs ofthe licensee and addressing such issues as the Supervisory Committee requires. (3) The Supervisory Committee may publish the report redacting such portion ofthe report as may be appropriate in the public interest. PARTD Revocation
I. Before the revocation ofa licence, the Supervisor shall give to the
licensee, a notice in writing of his intention to do so, specifying the reasons for the revocation and indicating a period that is not less than thirty days within which the licensee shall have an opportunity to be heard and, in such cases, the licensee may submit to the Supervisor a written statement of objections.
2. As soon as convenient afterthe hearing and receipt by the Supervisor
of the written statement or after the expiration ofthe period stated in the notice, whichever first occurs, the Supervisor shall afford the licensee the opportunity to be heard within the period specified in the notice, and after the hearing the Supervisor shall advise the licensee ofthe decision of the Committee by instrument in writing.
3. Where a licensee has been notified ofthe revocation of its licence
it may, within ten days after the date of the notification, appeal to the Court of Appeal and the Court of Appeal may make such order as it thinks fit.

146 [No. ] The Banking Services Act, 2014
4. The revocation of a licen~ shall not relieve the licensee of any
obligation incurred or assumed by the licensee prior to the revocation of the licence.

The Banking Services Act, 2014 [No. ] 147 SIXTH SCHEDULE (Section 82(2» Information to be Provided by a Licensee under Section 82 A licensee shall provide the infonnation specified in the frrst column at the frequency specified in the second column in fulfillment of its obligation to file returns to the Supervisor under subsection 82(2). First Column Information

Weekly ReturnsAll banks shall submit
(a) a statement of assets and liabilities (on and off balance sheet) and shareholders' equity and other supplementary infonnation as specified; and (b) deposits, borrowings and other liabilities for the computation of cash reserves and liquid assets to be held pursuant to sections 28 and 29 ofthe Bank ofJamaica Act.
Monthly ReturnsAll deposit taking institutions shall
submit
(a) a statement of assets and liabilities (on and off balance sheet) and shareholders' equity and other supplementary information as specified; Second Column Frequency No later than the Monday following the Wednesday to which the return relates. No later than seven business days after the end of each month to which the return relates.

148 [No. 1 The Banking Services Act, 2014 Information to be Provided by a Licensee under Section 82 First Column Information (b) details ofthe cash reserve and

liquid assets balances held

pursuant to sections 28 and 29

of the Bank ofJamaica Act;

(c) infonnation on customer liabilities to the licensee in respect of bills discounted, loans and advances, guarantees and any other counterparty exposure; (d) information on loans in respect of which no principal or interest which is due and payable has been paid for a period of ninety calendar days; and (e) liquidity positions.
3. Quarterly ReturnsAU deposit taking institutions shall
submit details regarding
(a) quarterly earnings and expenditure; (b) loans in respect of which no principal or interest which is due and payable has been paid for a period of ninety calendar days; (c) large exposure; (d) connected persons exposure; (e) market risk exposures.
4. Annual ReturnsSecond Column
Frequency
No later than twenty-one calendar days after the end of the quarter to which the return relates. Sixty calendar days after the end ofthe calendar year to which the return relates.

The Banking Services Act, 2014 [No. ] 149 SEVENTH SCHEDULE (Section 127(1» Offences and Penalties First Column Second Column Briefdescription of Relevant Penalty

Offences Section

Unlawful 9(2) On conviction in a Circuit disclosure by Court to a fine or member of imprisonment for a term not Supervisory exceeding three years or to Committee both such fine and member imprisonment. Except under and in 10(2) On summary conviction in a accordance with the Resident Magistrate's Court provisions of this Act, to a fine not exceeding three soliciting deposits from million dollars or to members of the public, imprisonment for a term not engaging in activities exceeding two years or to both involving the taking of such fme and imprisonment. deposits or engaging in &by other banking On conviction in a Circuit business. / Court to a fine or imprisonment for a term not exceeding ten years or to both such fine and, imprisonment. Undertaking business as a 11(2) On conviction in a Circuit shell bank or undertaking Court to a fine or or facilitating dealings of imprisonment for a term not any kind or nature with a exceeding ten years or to both shell bank. such fine and imprisonment. Fraudulently 12(2) On summary conviction in misrepresenting that a Resident Magistrate's a person is- Court to a fine not (a) licensed under exceeding five million

this Act; or dollars or to imprisonment

ISO [No. The Banking Services Act, 2014 First Column Brief description of

Offences

(b) authorized to engage in business or activities on behalf of a deposit taking institution. Inducing or attempting to induce another person to---:
(a) place money on deposit with him or any other person; or (b) enter into, or offer to enter into, any agreement for that purpose. Knowingly or without exercising reasonable care, having dealings of any nature with, or faciliblting or conducting any transaction with, or for, or on behalf of, a prohibited scheme. Offences and Penalties Second Column Relevant Penalty
Section
for a term not exceeding two years or to both such fme and imprisonment. On conviction in a Circuit Court to a fine or imprisonment for a term not exceeding ten years or to both such fine and imprisonment. 13(2) On summary conviction in a Resident Magistrate's Court to a fine not exceeding five miJIion dollars or to imprisonment for a term not exceeding one year or to both such fine and imprisonment. On conviction in a Circuit Court to a fine or imprisonment for a term not exceeding ten years or to both such fine and imprisonment. 14(3) On summary conviction in a Resident Magistrate's Court to a fine not exceeding five million dollars or to imprisonment for a term not exceeding two years or to both such fme and imprisonment.

The Banking Services Act, 2014 [No. 151 Offences and Penalties First Column Second Column Brief description of Relevant Penalty

Offences Section

On conviction in a
Supreme Court to a tine or imprisonment for a term not exceeding ten years or to both such tine and imprisonment. Not being licensed to 15(2) On summary conviction in a engage in banking Resident Magistrate's Court business using any to a tine not exceeding three name, tide, trade million dollars or to mark. style, imprisonment for a term not designation, or exceeding one year or to both description that such tine and imprisonment. represents or implies that the person is On conviction in a Supreme licensed to engage in Court to a tine or imprisonment banking business. for a term not exceeding three years or to both such tine and imprisonment. Hindering or 16(1l) On summary conviction in a obstructing an Resident Magistrate's Court to authorized officer or a tine not exceeding one any person acting in million dollars or to aid of such officer imprisonment for a term not in the performance exceeding six months. of his functions. Forming a company 17(6) On summary conviction in a or other body using Resident Magistrate's Court to a name or title that a tine not exceeding three includes a restricted million dollars or to word. imprisonment for a term not exceeding one year or to both such tine and imprisonment.

152 [No. The Banking Services Act, 2014 Offences and Penalties First Column

Briefdescription of

Offences

Changing the name or title of a company or other body to a name or title that includes a restricted word. Carrying on any activity, directly or indirectly, in Jamaica using a name or title that includes a restricted word. Failure to display or exhibit a certified copy Relevant

Section

17(6)
17(6)
25(2)
Second Column
Penalty
On conviction in the Supreme
Court to a fine or imprisonment for a term not exceeding three years or to both such fme and imprisonment. On summary conviction in a Resident Magistrate's Court to a fine not exceeding three million dollars or to imprisonment for a term not exceeding one year or to both such fine and imprisonment. On conviction in the Supreme Court to a fine or imprisonment for a term not exceeding three years or to both such fine and imprisonment. On summary conviction in a Resident Magistrate's Court to a fine not exceeding three million dollars or to imprisonment for a term not exceeding one year or to both such fine and imprisonment. On conviction in the Supreme Court to a fine or imprisonment for a term not exceeding three years or to both such fine and imprisonment. On summary conviction in a Resident Magistrate's Court to

The Banking Services Act,. 2014 [No. ] 153 Offences and Penalties First Column Second Column Brief description of Relevant Penalty

Offences . Section

of its licence in a a fine not exceeding one conspicuous place on million dollars. each ofits premises where it conducts banking business. Disclosing infonnation 29(2) On conviction in the Supreme regarding the Court to a fine or imprisonment operations of any for a term not exceeding three licensee, or the affairs years or to both such fine and ofa customer of a imprisonment. deposit taking institution or a foreign bank. Making alteration to 30(5) On summary conviction in a incorporating documents Resident Magistrate's Court to without approval a fine not exceeding three ofSupervisor. million dollars or to imprisonment for a term not exceeding six months or to .both such fine and imprisonment. Failure to notify 3'0(5) On sUDlJlUU')' conviction in a ~orof~on .Resident Magistrate's Court to within fourteen days of a fh,te not exceeding three the date on which an . million dollars or to ~on is made to imprisonment for a term not incorporating documents. exceeding six months or to both such fine and imprisonment. Failure to ensure that 37(3) On summary conviction in a each substantial Resident Magistrate's Court to sbarebolder, director, a fine not exceeding three officer and key million dollars or to employee is and imprisonment for a term not

154 [No. ] The Banking Services Act, 2014 Offences and Penalties . First Column Second Column Brief description of Relevant Penalty Offences Section remains a fit and exceeding six months or to proper petson. both such fine and imprisonment. Failure to ensure that .37(3) On summary conviction in a all members of any Resident Magistrate's Court to financial group complies a fine not exceeding three with obligation to million dollars or to ensure that each imprisonment for a term not substantial shareholder, exceeding six months or to director, officer and both such fine and key employee is imprisonment. and remains a fit and proper person. Without the express 38(3) On summary conviction.in a authorization in Resident Magistrate's Court to writing otthe Supervisor, a fine not exceeding three acting or continuing to million doUars or to act as a diredor of, or imprisonment for a term not . be concerned, directly or exceeding six mOnths or to indirectly, in the both such fine and. mar,t.t.gement or key imprisonment. functions of any licensee. Failure to notify 39(2) On conviction in the Supreme Supervisor re Court to a fine or imprisooment dismissal etc. for a term not exceeding five years or to both such fine and imprisonment. Failure to comply 45(2) On summary conviction in a with the prUdential Resident Magistrate's Court to liquidity a fine not exceeding five requirements million doJlars or to specified in the imprisonment for a term not Supervisoty Rules. exceeding six months or to both such fine and imprisonment.

The Banking Services Act, 20/4 [No. 155 Offences and Penalties First Column Second Column Briefdescription of Relevant Penalty

Offences Section

Being a merchant 48(3) On summary conviction in a bank, accepting or Resident Magistrate's Court to repaying deposit a fine not exceeding five contrary to Act. million dollars or to imprisonment for a term not exceeding two years or to bothsuch fine and imprisonment. On conviction in the Supreme Court to a fine or imprisonment for a term not exceeding five years or to both such fine and imprisonment. Engaging in trade or other 49(3) On conviction in the Supreme business contrary to Court to a fine ot imprisonment Act. for a term not exceeding five years or to both such fine and imprisonment. Acquiring fixed assets 50(2) On conviction in the Supreme contrary to Act. Court to a fine or imprisonment for a term not exceeding three years or to both such fine and imprisonment. Acquiring, dealing in 51(3) On conviction in the Supreme or grant, credit facilities Court to a fine or imprisonment on the security of its for a term not exceeding three own shares or the shares years or to both such fine and of any other company imprisonment. within the group contrary to Act.

156 [No. ] The Banking Services Act, 2014 Offences and Penalties First Column Second Column Briq description of Relevant Penalty Offences Section Paying dividend on 52(4) On conviction in the Supreme own shares contraIy . Cowt to a fine or imprisonment tb Act. for a term not exceeding -five years or to both such fme and imprisonment. Failure to comply 52(4) On conviction in the Supreme .with notice of Cowt to a fine or imprisonment . prohibition. for a term not exceeding five years or to both such fine and . imprisonment. Beneficially holding 53(4) On conviction in the Supreme land in fee simple Cowt to a fine or imprisonment contrary to Act. for a term not exceeding five years or to both such fine and imprisonment. Managing or investing 54(2) On conviction in the Supreme funds on behalf of Cowt to a fine or imprisonment customers contraIy to for a term not exceeding five Act or engaging in years or to both such fine and proprietary trading in imprisonment. securities for its own account. Engaging in permitted 55(4) On conviction. in the Supreme activities contraIy to Act. Cowt tb a fine or imprisonment for a term not exceeding three years or to both such fine and imprisonment. Incurring eounterparty 57(4) On conviction in the Supreme exposures contraIy to Cowt to a fine or imprisonment Act. for a term not exceeding five years or to both such fine and imprisonment.

The Banking Services Act, 2014 [No. ] 157 Offences and Penalties First Column Second Column Brief description of Relevant Penalty

Offences Section

Granting or incurring 58(5) On conviction in the Supreme unsecured credit Court to a fine or imprisonment facilities contrary for a tenn not exceeding five to Act. years or to both such fine and imprisonment. Incurring counterparty 59(2) On conviction in the Supreme exposures in excess of Court to a fine or imprisonment aggregate amount. for a term not exceeding five years or to both such fine and imprisonment. Having holdings in 60(2) On conviction in the Supreme companies contrary Court to a fine or imprisonment to Act. for a term not exceeding five years or tq both such fine and imprisonment. Failure to notify 61(2) On summary conviction in a Supervisor on Resident Magistrate's Court to counterparty exposures. a fine not exceeding two million dollars. Refuses to provide 65(4) On summary conviction in a any relevant Resident Magistrate's Court to information a fine not exceeding three or refusing to obey million dollars or to a summons. imprisonment for a term not exceeding six months or to both such fine and imprisonment. Failure to comply with 66(2) On conviction in the Supreme a requirement knowingly Court to a fine or imprisonment or wilfully supplying for a tenn not exceeding five false information to years or te,') both such fine and Supervisor with intent imprisonment. to mislead or attempting to mislead any person.

IS8 [No. ] The Banking Services Act, 2014 Offences and Penalties First Column Second Coliunn Briefdescription of Relevant Penalty Offences Seclion Failure to comply 67(2) On conviction in the Supreme with a requirement Court to a fine or imprisonment made under section for a term not exceeding five 67(1)(b) or wilfully years or to both such fme and attempting to mislead imprisonment. or making any false statement with intent to mislead or attempting to mislead any person in the execution of his duties under this Part or without lawful justification or excuse. obstructing or hindering any person in the execution of such duties. Failure to take prescribed 71(3) On conviction in the Supreme measures to properly Court to a fine or imprisonment identifY. assess and for a term not exceeding three manage relationships and years or to both such fme and risks. imprisonment. Failure to comply with 71(6) On conviction in the Supreme directions. Court to a fine or imprisonment for a term not exceeding three years or to both such fine and imprisonment. Failure to comply with 72(3) On conviction in the Supreme directions on restructuring Court to a fine or imprisonment ofownership in a deposit for a term not exceeding three taking institution. years or to both such fme and imprisonment.

The Banking Services Act, 2014 [No. ] 159 Offences and Penalties First Column Second Column Briefdescription of Relevant Penalty

Offences Section

Failure to comply 75(4) On summary conviction in a with summons re Resident Magistrate's Court to responsibilities. a fine not exceeding four million dollars or to imprisonment for a term not exceeding six months or to both such fine and imprisonment. Failure to comply 79(2) On conviction in the with a requirement Supreme Court to a fine or, in response to a or imprisonment for a term requirement, knowingly not exceeding five years Qr or wilfully supplying to both such fine and false information to imprisonment. the Supervisor. Failure to submit, 82(5) On summary conviction in a returns or provide Resident Magistrate's Court information in to a fine not exceeding four accordance with Act. million dollars. On conviction in the Supreme Court to a fine. Failure to comply 83(6) On conviction in the with loan loss Supreme Court to a fine reserve requirements. or imprisonment for a term not exceeding three years or to both such fine and imprisonment. Failure to submit, 84(5) On summary conviction in a exhibit or publish last Resident Magistrate's Court to audited financial a fine not eKceeding one statements. million dollars. Failure to make 85(4) On conviction in the Supreme returns in relation Cowt to a fine or imprisonment to consolidated for a term not exceeding three audited financial years or to both such fine and statements. imprisonment.

160 [No. ] The Banking SerVices Act, 2014 Offences and Penalties First Column Second Column Brief description of Relevant· Penalty Offences Section Failure ~o make 86(4) On conviction in the returns in relation Supreme Court to a fine to consolidated or imprisonment for a tenn audited financial not exceeding three years or statements to to both such fine and operation of imprisonment. subsidiary. Failure to appoint 88(3) On summary conviction in a external auditor. Resident Magistrate's Court to a fine not exceeding four million dollars. On conviction in a Circuit Court to a fine. Knowingly appointing 89(2) On summary conviction in a an external auditor or Resident Magistrate's Court to knowingly coQSenting a fine not exceeding to be appointed as the two million dollars. external auditor of a licensee in contravention of the section. Failure to report to 91(3) On conviction in the Supreme Supervisor on Court to a fine not exceeding transactions~ etc.. five million dollars or affecting licensee's imprisonment for a tenn not financial viability. .exceeding five years or to both such fine and imprisonment Failure to cotnply when 92(3) On conviction in the Supreme summoned re enquiry Court to a fine not exceeding into operations and four million dollars or financial position imprisonment for a tenn not oflicensee. exceeding five years or to both such fine and imprisonment.

The Banking Services Act, 2014 [No. ] 161 Offences and Penalties First Column Second Column Brief description of Offences Relevant
Section
Penalty
Breach ofduty of auditor to comply with requirements of Supervisor in relation to special and expanded audits. 93(2) On summary conviction in a Resident Magistrate's Court to a Poe not exceeding two million dollars. On conviction in the Supreme Court to a firie or imprisonment for a term not exceeding three years or to both such tine and imprisonment. Failure to notifY Supervisor on resignation or appointment. 95(3) On summary conviction in a Resident Magistrate's Court to a tine not exceeding two million dollars. Failure to comply with requirements re union transfer or 98(9) On conviction in the Supreme Court to a tine. undertaking of building society. Causing or permitting the inclusion of any information which he knows to be false in a 103(2) On summary conviction in a Resident Magistrate's Court to a tine not exceeding five million dollars or to material particular or recklessly includes any information which is false in a material imprisonment for a term not exceeding two years. On conviction in the particular. Supreme Court to a tine or imprisonment for a term not exceeding five years or to both such tine and imprisonment.

162 [No. ] The Banlcing Services Act, 2014 Offences and Penalties First Column Second Column Brief description of Relevant Penalty Offences Section Failure to make returns in relation to voluntary winding up. 107(4) On summary conviction in a Resident Magistrate's Court to a fine not exceeding three million dollars or to imprisonment for a term not exceeding six months. Offering or providing services through a third party without the prior approval ofthe Supervisory Committee. 108(6) On summary conviction in a Resident Magistrate'~ Court to a fine not exceeding two million dollars. Holding self out as being authorized by a deposit taking institution to provide services through an agent. 108(7) On summary conviction in a Resident Magistrate's Court to a fine not exceeding five million dollars or imprisonment for a term not exceeding two years or to both such fine and imprisonment. On conviction in the Supreme Court to a fine or imprisonment for a term not exceeding five years or to both such fine and imprisonment. Failure to comply with summons of bank or with requirements of authorized officers or obstructing or misleading a deposit taking institution. 109(7) On conviction in the Supreme Court to a fine or imprisonment for a term not exceeding three years or to both such fine and imprisonment. Failure to comply with any requirement or contravenes any prohibition imposed by any direction or cease and desist order. 109(7) On summary conviction in a Resident Magistrate's Court to a fine not exceeding five million dollars or to imprisonment for a term not exceeding one year.

The Banking Services Act, 20 J4 [No. ] 163 Offences and Penalties First Coillmn Brief description of Offences Failure to comply with directions. Failure to comply with directions of Supervisor. Breach ofsecrecy requirements. Relevant

Section

110(7)
132(2)
134(3) and (5)
Second Coillmn
Penalty
On conviction in the
Supreme Court to a fine or imprisonment for a term not exceeding three years or to both such fme and imprisonment. On conviction in the Supreme Court to a fme or imprisonment for a term not exceeding three years or to both such fme and imprisonment. On summary conviction in a Resident Magistrate's Court to a fine not exceeding five million dollars or to imprisonment for a term not exceeding one year. On conviction in the Supreme Court to a fine or imprisonment for a term not exceeding five years or to both such fine and imprisonment.

1
I
164 [No. The Banking Services Act. 2014 EIGHTH SCHEDULE (Section 130) Offences in respect ofwhich liability to conviction may be discharged by payment ofa fIXed penalty Nature ofOffence Section Penalty Inducing or attempting to 13(2) $7,500,000.00

induce another person to-
(a) place money on

deposit with him

or any other

person; or

(b) enter into, or

offer to enter

into, any

agreement for

that purpose,

Knowingly or without 14(3) $7,500,000.00

exercising reasonable care,

having dealings of any

nature with, or facilitating

or conducting any

transaction with, or for, or

on behalf of, a prohibited

scheme.

Forming a company or 17(6) $4,500,000.00

other body using a name

or title that includes a

restricted word.

Changing the name or title 17(6) $4,500,000.00 ofa company or other body to a name or title that .includes a restrict~ word. 7· Carrying on any activity, 17(6) $3,000,000.00

directly or indirectly, in

Jamaica using a name or

title that includes a

restricted word.

The Banking Services Act, 2014 [No. ] 165 Nature ofOffence Section Penalty Failure to display or exhibit 25(2) $1,500,000.00 a certified copy of its licence in a conspicuous place on each premises where it conducts banking business. Making alteration to 30(5) $4,500,000.00 incorporating documents without approval of Supervisor. Failure to notify Supervisor 30(5) $4,500,000.00 within fourteen days of the date on which an alteration is made to incorporating documents. Failure to ensure that each 37(3) $4,500,000.00 substantial shareholder, director, officer and key employee is and remains a fit and proper person. Failure to ensure that all 37(3) $4,500,000.00 members of fmancial group complies with obligation to ensure that each substantial shareholder, director, officer and key employee is and remains a fit and proper person. Without the express 38(3) $4,500,000.'00 authorization in writing of the Supervisor, acting or continuing to act as a director of, or being concerned, directly or indirectly, in the management or key functions of any licensee.

166 [No. J The Banking Services Act, 2014 Nature ofOffence Failure to notifY Supervisor re dismissal etc. Being a merchant bank, accepting or repaying deposit contrary'to Act. Engaging in trade or other business contrary to Act. Acquiring fixed assets contrary to Act. Acquiring dealing in or granting, credit facilities on the security of its own shares or the shares of any other company within the group contrary to Act. Paying dividend on own shares contrary to Act. Failure to comply with notice of prohibition. Beneficially holding land in fee simple contrary to Act. Managing or investing funds on behalf of customers contrary to Act or engaging in proprietary trading in securities for its own account. Engaging in permitted activities contrary toAct. Incurring counterparty exposures contrary to Act.
Section
39(2)
48(3)
49(3)
50(2)
51(3)
52(4)
52(4)
53(4)
54(2)
55(4)
57(4)
Penalty
$7,500,000.00
" $7,500,000.00
$3,000,000.00
$7,500,000.00

The Banking Services Act, 2014 [No. ] 167 Nature ofOffence Section Penalty Granting or incurring 58(5) $7,500,000.00 unsecured credit facilities contrary to Act. Incurring counterparty 59(2) $7,500,000.00 exposures in excess of aggregate amount. Having holdings in 60(2) $7,500,000.00 companies contrary to Act. Failure to notify 61(2) $3,000,000.00 Supervisor on counterparty exposures. Refusin, to provide any 65(4) $4,500,000.00 relevant information or refusq to obey a summons. Failure to comply with a 66(2) $7,500,000.00 requirement knowingly or wilfully supplying false information· to supervisor with intent to mislead or attempting to mislead any person. Failure to comply with a 67(2) $7,500,000.00 requirement made under
section 67{l)(b) or wilfully
attempq to mislead or
IDIldng any false statement with intent to mislead or attempting to mislead any person in the execution of his duties under this Part or without lawfUl justification or excuse, obstrucq or hindering any person in the execution of such duties.

168 [No. ] The Banking Services Act. 2014 Nature ofOffence Section Penalty Failure to take prescribed 71(3) $7,500,000.00

measures to properly

identify, assess and

manage relationship

and risks.

Failure to comply with 72(3} $3,000,000.00

directions oq

restructuring of

ownership in a deposit

taking institution.

Failure to comply with 75(4) $6,000,000.00·

summons re

responsibilities.

Failure to comply with 79(2) $7,500,000.00

a requirement or, in

response to a requirement, knowingly or

wilfUlly supplying false

information to the

Supervisor.

Failure to submit returns 82(5) $3,000,000.00

or provide information in

accordance with Act.

Failure to comply with 83(6) $7,500,000.00

reserve requirements.

Failure to submit, exhibit 84(5) $1,500,000.00

or publish last audited

financial statements.

Failure to make returns 85(4) $7,500,000.00

in relation to consolidated

audited fmancial

statements.

Failure to comply with 86(4) $3,000,000.00 directions on insolvency.

The Banking Services Act. 2014 [No. ] 169 Nature ofOffence Failure to appoint extemal auditor. Knowingly appointing an external auditor or knowingly consenting to be appointed as the external auditor of a licensee in contravention of the section. Failure to report to Supervisor on transactions, etc. affecting licensee's financial viability. Failure to comply when summoned re enquiry into operations and financial position of licensee; Breach ofduty ofauditor to comply with requirements of Supervisor in relation to special and expanded audits. Failure to notify Supervisor on resignation or appointment. Failure to comply with requirements re union transfer or undertaking ofbuilding society Causing of permitting the inclusion of any information which he knows to be false in a material particular or recklessly includes any
Section Penalty
88(3) $6,000,000.00
89(2) $6,000,000.00
91(3) $6,000,000.00
92(3) $7,500,000.00
93(2) $3,000,000.00
95(3) $3,000,000.00
98(9) $7,500,000.00
103(2) $7,500,000.00

170 [No. ] The Banking Services Act, 2014 Nature ofOffence Section Penalty infonnation which is

false in a material

particular.

Failure to make returns 107(4) $4,500,000.00 in relation to voluntary winding up. Failure to comply with 109(6) $7,500,000.00 sununons of Bank or with requirements of authorized officers or obstructing or misleading a deposit taking institution. Failure to comply with 110(7) $7,500,000.00 directions. Failure to comply with 132(7) $7,500,000.00 directions ofSupervisor under Part XXVI. Breach ofsecrecy 134(3) $7,500,000.00 requirements. Failure to comply with 134(5) $7,500,000.00 directions ofSupervisor.

The Banking Services Act, 2014 [No. ] 171 NINTH SCHEDULE (Section 134(2» Circumstances in which Information on Customer:S

Accounts in a Deposit Taking institution may be

Disclosed·

Section 134 (I) shall not apply in any case where- .
(a) the infonnation is disclosed by an officer of a licensee to

another officer ofthat licensee or financial group;

(b) the customer or his personal representative gives written

pennission for disclosure of the infonnation;

is a company, it is being wound up;

(d) the information is disclosed in connection with civil

proceedings
(i) arising between the licensee and the customer in relation to the customer's banking transactions; or (ii) broUght by the licensee by way ofinterpleader in connection with competing claims by two or more parties to money in the customer's account; (e) the infonnation is disclosed to an authorized officer; (f) the licensee has been served with a court order attaching

money in the customer's account;

(g) the infonnation disclosed is required by the head office of a

foreign bank and pertains only to credit granted by the

Jamaican operations of that. bank;

(h) information disclosed in accordance with the Credit

Reporting Act;

(i) after consultation with the Supervisor, the Minister in writing

directs such disclosure to a foreign govemment or ageney of

such government where there exists between Jamaica and

such foreign an agreement for the mutual exchange of

information ofsuch kind and the Minister considers it in the

public interest that such disclosure be made;

172 [No. ]
(j)
(k)
(I)
(m)
(n)
(0)
(P)
(q)
(r).
The Banking Services Act, 2014 on the direction in writing of the Supervisor, for purposes reIatiDg to his functions under this Act; the circumstances are such that it is in the interests of the licensee that the information be disclosed; disclosure is permitted or required under another enactment; disclosure is required by virtue ofan order ofthe court, other than an order under paragraph (g); disclosure for the purposes ofthe financial group's anti-money laundering and counter-terrorism or financing risk management procedures, so however that it is without prejudice to section 97 (tipping oft) of Proceeds 0/Crime Act; disclosure necessary for the financial groups general risk management procedures or standardization ofcredit approval mechanisms; disclosure for the purposes of outsourcing arrangements in accordance with such requirements as may be prescribed; the licensee proposes to effect the sale of loans or securitization arrangements, and has received the. approval in writing ofthe Supervisor to make such disclosures as may be necessary to effect the sale or securitization transaction; the Minister directs, in writing, the disclosure in the national interest.

The Banking Services Act. 2014 [No. ] TENTH ScHEDULE (Section 142) Amendment ofBank ofJamaica Act Provision Amendment
Section 2 1. Delete the definition of "commercial bank".
2. Delete the defmitions of"overseas regulatory authority"
and "specified financial institution".
3. In the definition of"prudential criteria" delete the word
"commercial" .
4. Insert in the appropriate alphabetical sequence the
following definitions
" "bank" has the meaning assigned to it in the Banking Services Act; "building society" has the meaning assigned to it in the Banking Services Act; "deposit taking institution" has the meaning assigned to it in the Banking Services Act, "financial institution" has the meaning assigned to it in the Banking Services Act, "foreign financial regulatory authority" has the meaning assigned to it in the Banking Services Act, "merchant bank" has the meaning assigrted to it in the Banking Services Act, "prescribed liabilities" means the liabilities specified by the Bank, by notice published in the Gazette; ''regulator" has the meaning assigned to it in the Banking Services Act; "regulatory counterparts" means- (a) the designated authority as defined in the Banking Services Act, 173
.....

174 [No. The Banking Services Act, 20J4 'Provision Amendment (b) a foreign fmancial regulatory authority; (c) a regulator; (d) an authority operating in a country other than Jamaica which undertakes functions similar to the designated authority; (e) the Jamaica Deposit Insurance Corporation; (f) an authority operating in a country other than Jamaica which undertakes functions similar to the Jamaica Deposit Insurance Corporation; (g) the International Monetary Fund, the World Bank, or any other such multilateral agency; (h) the Caribbean Financial Action Task Force, or any other similar international organization that recommends or sets international standards; (i) an independent observer or assessor; "specified financial institution" means a person or undertaking (not being a bank, merchant bank or building society) whose business includes the granting of loans or other credit facilities or the accepting of deposits and who is declared by the Minister by notice in the Gazette to be a specified financial institution for the purposes ofthis Act.

The Banking Services Act, 2014 [No. ] 17S Provision Amendment "Supervisory Committee" means the committee constituted by section 6 of the Banking Services Act;>t.
Section 6 Delete the section and substitute therefor the following
"Board of 6.-(1) There shall be a Board of Directors. Directors of the Bank which, subject to the provisions of this Act, shall be responSible for the policy and the geneiaJ. administration ofthe affairs ofthe Bank. (2) The Board shall consist ofthe following directors (a) the Governor, appointed under section 6A; (b) the Senior Deputy Governor, appointed under section 60; (c) the Financial Secretary; and (d) six other directors appointed by the Minister by instrument in writing. (3) Notwithstanding subsection (2)(d), the Minister may, by instrument in writing (whether in the same instrument of appointment as Deputy Governor, or by subsequent instrument), appoint to be directors, one or more Deputy Governors appointed under
section 60 so, howe'er. that any such
appointment shall not be taken into account in determining the number of directors that may be appointed under subsection (2). (4) No action, suit, prosecution or other proceedings shall be brought or instituted personally against any director in respect of any act done bona fide in . pursuance or execution or intended execution of this Act.

.,.-,
176 [No. 1 The Banking Services Act, 2014 Provision Amendment SclteduIe. (S) Where any director is exempt from liability by reason only of the provisions of subsection (3) the Bank shall be liable to the extent that it would be ifthat director were a servant or agent ofthe Bank. (6) The provisions of the
Schedule shall have effect as to the tenure
of office of the directors and the operations ofthe Board and otherwise in relation thereto. Appoinlment 6A.-{I) The Governor shall be ofOovernor. appointed by the Governor-General in Council by instrument under the Broad Seal. (2) The appointment of the Governor shall not constitute the appointment of a public officer for the purpose ofsection 123 ofthe Constitution of Jamaica. (3) A person appointed as Governor shall hold office for a period of not less than seven years and may be reappointed. Function of 6B. The Governor, or, in his absence, Governor. the Senior Deputy Governor, or, in the absence ofthe Governor and the Senior Deputy Governor, a Deputy Governor designated by the Minister. shall be in ctwge ofthe day-to-day management and operations of the Bank and shall be answerable to the Board for his acts and decisions. Removal of 6C.-(l) The Governor-General in oOvcmor. Council, may remove the Governor from office. ""

The Banking Services Act, 1014 [No. ] 177 Provision Senior Deputy Govemorand Deputy Governors. Amendment (2) The Cabinet may tender advice under subsection (1) ifthe Cabinet is satisfied that the Governor should be removed for cause or that any of the conditions set out in paragraph 5 of the
Schedule, exists.
(3) The Cabinet may tender advice under this section whether or not the Board has made a recommendation that the Governor be removed from office. 6D.-(1) The Senior Deputy Governor and Deputy Governors shall be appointed by the Minister on the recommendation of tbe Board, by instrument in writing for a period not exceeding five years, on such terms and conditions as may be specified. (2) Where a Senior Deputy Governor or Deputy Governor is also recommended to be the Deputy Supervisor, the appointment of that officer as Deputy Supervisor shall be made in accordance with section 34B. (3) Subject to subsection (4), in any case where the Senior Deputy Governor or a Deputy Governor who was not previously carrying out the functions of Deputy Supervisor, is appointed as Deputy Supervisor during the term ofthe Deputy Governor's appointment, the appointment as Deputy Governor shall be deemed to have expired and his appointment as Deputy Supervisor shall commence. (4) Nothing contained in this
section or section 6A. shall affect or
prejudice the terms of any existing appointment in place as at the date this

118 [No. The Banking Services Act, 2014 Provision
Section 22B 1.
2.
Amendment
section comes into effect in relation to
the Governor. a Senior Deputy Governor, a Deputy Governor or a director. (5) The Governor, Senior Deputy Governor and Deputy Governors shall devote the whole of their professional services to the Bank and while holding office shall not, without the apprpval ofthe Board (a) receive any salary or supplementation thereto from any source other than the Bank; or (b) occupy any other office or employment, whether
remunerated or not ....
Renumber subsections (2). (3), (4), (5), (6) and (7) as subsections (3), (4), (5), (6). (7) and (8). Delete the subsection (1) and substitute therefor the following as subsections (1) and (2} " (1) Any person of a category specified in subsection (2) shall not acquire foreign assets except in accordance vrith such directions as may from time to time be given to the person by the Minister in relation to the acquisition of foreign assets. (2) The categories of persons referred to in subsection (1) are (a) authorized dealers; (b) persons to whom any powers ofthe Minister under this Act are delegated; (c) merchant banks;

The Banking Services Act, 2014 [No. J 179 Provision Amendment (d) insurance companies; (e) credit unions; (f) building societies; (g) persons who, with the approval of the Minister, operate exchange bureaux; (h) managers and trustees of collective investment schemes registered under the Securities Act; (i) persons who operate or manage superannuation or pension funds; G> approved money transfer and remittance agents and agencies.".
Section 26 Delete the word "commercial" wherever it appears.
Sections 28,
28A and 29.
Delete sections 28, 28A and 29 and substitute therefor the following "Reserve requirements. 28.-(1) Every deposit taking institution or specified financial institution shall maintain, in the fonn ofa deposit with the Bank, a cash reserve. (2) Subject to subsection (3), the cash reserve to be maintained by a bank or merchant bank shall be not less than five nor more than twenty-five per centum of prescribed liabilities and the cash reserve to be maintained by a building society or a specified

180 [No. ] The Banking Services Act, 2014 Provision Amendment financial institution, shall be such percentage as may be prescribed; and, subject to those limits (a) in the case of a bank, the cash reserve shall be such percentage of its prescribed liabilities as prescribed by notice issued by the Bank and published in the Gazelte; (b) in the case of a merchant bank, the cash reserve shall be such percentage of its prescribed liabilities as prescribed by notice issued by the Bank and published in the Gazelle; (c) in the case of a building society. the cash reserve shall be such percentage of its prescribed liabilities in respect of deposits and withdrawable shares as prescribed by notice issued by the Bank and published in the Gazelle; (d) in the case of a specified financial institution the cash reserve shall be such percentage of its prescribed "' liabilities including withdrawable shares

Provision
The BanIcing Services Act, 2014 [No. ] 181 Amendment (where applicable) as prescribed by notice issued by the Bank and published in the Gazette. (3) A notice under subsection (2) may make different provisions as respect different types of prescribed liabilities specified in the notice, so, however that if any such notice prescribes marginal cash reserve requirements for increases in specified prescribed liabilities such requirements shall not exceed one hundred per centum of the increase in such liabilities. (4) Without prejudice to the generality of subsection (3), a notice under subsection (2) may require that where a portion ofthe prescribed liabilities is payable in foreign currenCy then such percentage of the prescribed liabilities so payable as is specified in the notice shall be held in foreign currency. (5) Where any such percentage is to be increased (a) the increase shall be so effected as not to exceed two percentage points in anyone period of thirty days; and

182 [No. 1 The Banking Services Act, 2014 Provision Amentent (b) it s~ll be the duty of the Bank to give all depol;it taking institution~ or as the case may Ibe, specified financlal institutions at least 115 days' notice of the dBte on which the incr4ase is to take effect. , (6) Subject to subsection (7), for the purpbse of determining the amount of the cash reserve required to be m~intained by a deposit taking instit¥tion or specified financial institution during any month- ' (a) the mbount of its deposit iwith the Bank shall be the amount of such ~eposit as at the close lof business on each business day in the m~nth; (b) the an\aount of its prescribed liabilities shall be the 'average amount of suJh liabilities at the close of business on ~ednesdays in each of the four consecuti~e weeks ending with last Wednesday but ont ofthe preceding in ~ach month. (7) The Bbk may, by notice published in the Gazette, vary the method to be ufed in calculating the cash reserve required to be maintained under ~is section.

Provision
The Banking Services Act, 2014 [No. ] 183 Amendment (8) Where a deposit taking institution or specified financial institution fails to maintain the required cash reserve, that institution shall pay to the Bank, interest calculated in respect of each business day that the deficiency persists at such rate as the Bank may specify by notice. (9) For the purpose ofthis
section
"deficiency" means the amount by which the sum (if any) actually deposited by the deposit taking institution or specified financial institution with the Bank falls short of the required cash reserve; "marginal cash reserve requirements" means in relation to any increase in prescribed liabilities, such percentage of the increase as is required to be maintained with the Bank for the purposes ofthis
section.
(10) The coming into effect of this section shall not affect any requirements on deposit taking institutions relating to the maintenance ofa cash reserve that were in existence prior to the coming into effect of this section, unless and until those requirements are varied in accordance with this Act.

184 [No. ] The Banking Services Act, 1014 Provision Amendment (II) The power conferred by subsection (2) may be exercised (a) either in relation to all cases to which the power extends, or in relation to all those cases subject to specified exceptions, or in relation to any specified cases or classes ofcase; (b) so as to make, as respects the cases in relation to which it is exercised (i) the fu II provision to which the power extends or any less provision (whether by way of exception or otherWIse); (ii) the same provision for all cases in relation to which the power is exercised

The Banking Services Act, 2014 [No. ] 185 Provision Amendment or different provisions for different cases classes or of case, or different provisions as respects the same case or class of case for different purposes; (iii) any such provision either unconditionally or subject to any specified condition. Special deposits. 28A.--(I ) Without prejudice to the provisions of section 28, and subject to subsection (2), the Bank may, with the approval in writing of the Minister, require- (a) a deposit taking institution; and (b) any specifiedfinanciai institution, to maintain with the Bank in the form of a deposit (in this

186 [No.
Provision
The Banking Services Act, 2014
Amendment
section referred to as a
"special deposit") an amount not exceeding twenty per cen.hlm of the amount ofthe prescribed l~bilities ofsuch deposit taking institution or such specified financial institution. (2) A deposit taking insti· tution or specified financial institution may comply. in whole or in
part, with a requirement made UDder subsection (1) by investments
in the form of
(a) Treasury bills issued by the Government of Jamaica; (b) certificates of deposit issued by the l3ank; or (c) such other form of securities as the Bank may approve. (3) Interest at such rate as the Minister may. by order, determine, shall be paid by the Bank on the amount of any special deposit referred to in subsection (1). , (4) The power conferred by subsection (1) may be exercised (a) either in relation to all cases to which the power extends, or in relation to aU those

The Banking Services Act, 2014 [No. ] 187 Provision Amendment cases subject to specified exceptions, or in relation to any specified cases or classes ofcase; (b) so as to make, as respects the cases in relation to which it is exercised (i) the f u I I provision to which the power extends or any less provi· s ion (whether by way of exception or otherwise); (ii) the same provision for all cases in relation to which the power is exercised or different provisions for different cases or classes of case, or different provisions as respects

188 [No. ] The Banking Services Act, 2014 Provision Power to vary liquid asset requirements. Amendment the same case or class of case fot different purposes; (iii) any such provision either unconditionally or subject to any specified condition. (5) Where a deposit taking institution or specified financial institution on any day fails to comply with a requirement made pursuant to subsection (I), that deposit taking institution or specified financial institution shalt pay to the Bank in respect of that day interest calculated at a daily rate of one sixth of one per cent (or such othctt' rate as the Minister may, by order, approve) on the sum by which the amount ofthe special deposit in respect of that deposit taking institution or specified fmancial institution falls short of the amount stated in the requirement as aforesaid 29.-(1) Every deposit taking institution or specified financial institution shall so conduct its business as to ensure that its stock of liquid assets is on the average

The Banking Services Act, 2014 [No. ] 189 Provision Amendment not less than the per centum specified under this section. (2) The liquid assets that shall be maintained pursuant to this subsection shall be (a) in the case of a bank or merchant bank. such percentage of its average prescribed liabilities as prescn'bed by notice issued by the Bank and published in th~ Gazette; (b) in the case of a building society. such percentage of its average prescribed liabilities in respect of deposits and withdrawable shares as may be prescribed by notice issued by the Bank and published in the Gazette; (c) in the case of any specified financial institution such percentage of its prescribed average liabilities, including withdrawable shares (where applicable) as may be prescribed by notice issued by the Bank and published in the Gazette,

190 [No. ]
Provision
The Banking Services Act, 2014
Amendment so, however, that a percentage prescribed pursuant to this subsection shall not be less than five nor more than fifty per centum or, subject to subsections (2A) and (2B) such other percentage as the Minister may specifY by order, subject to affirmative resolution. (2A) An order made under subsection (2) shall, be subject to revocation or amendment, remain in force for a period of ninety days or such longer period as may be authorized under subsection (2B). (2B) The House of Representatives and the Senate may, from time to time, by resolution, extend an order made under subsection (2A) for such period not exceeding ninety days as may be specified in the resolution. (3) Where any such percentage under subsection (2) is to be increased (a) the increase shall be so effected as not to exceed five percentage points in anyone period of thirty days; and (b) it shall be the duty of the Bank to give all deposit taking

Provision
The Banking Services Act, 2014 [No. ] 191 Amendment institutions or as the case may be, specified fmancial institutions at least fifteen days' notice of the date on which the increase is to take effect (4) Without prejudice to the generality of subSection (2) a notice under subsection (2) stating the minimum liquid assets to be maintained may require that whe~ a portion of the prescribed liabilities is payable in foreign currency then such percentage of the liquid assets so payable as is specified in the notice shall be held in foreign currency, so however, that the percentage so specified shall not be less than fifteen nor mOre than fifty per cenh,lm. (5) Subject to subsection (2), for the purpose ofdetermining the amount of the liquid assets required to be maintained by a deposit taking institution or specified financial institution during any month (a) the 1PQ0untofits liquid assets shall be the average amount of such assets at the close of business ~n each business day of the month; and (b) the amount of its prescribed liabilities

192 [No. ] The Banking Services Act, 2014 Provision Amendment shall be the average amount of such liabilities at the close of business on Wednesdays in each of the four consecutive weeks ending with the last Wednesday but one of the preceding month. (6) The Bank may, by notice published in the Gazette, vary the method to be used in calculating the average of the liquid assets required to be maintained under this section. (7) For the purposes of this section "liquid assets" means the following assets which shall be unencumbered- (a) notes and coins; (b) cash reserves on deposit with the Bank in accordance with
section 28;
(c) cash balances with the Bank in excess of such cash reserves mentioned in paragraph (b); (d) short term instruments issued by the Bank; (e) money at call or short notice, held with another deposit taking institution (repayable on demand or on not more than fourteen days , notice),

Provision
The Banking Services Act, 2014 [No. ] 193 Amendment less any amount held for that deposit taking institution; (t) Treasury Bills issued by the Government of Jamaica; (g) short term debt securities or instruments issued by the Government of Jamaica, whether denominated in Jamaican dollars or foreign currency; (h) such other assets, whether denominated in Jamaican dollars ora foreign currency, as the Bank specifies by notice published in the Gazette, and for the purposes ofparagraphs (d) and (g) "short term" in relation to an asset refers to the maturity date which will occur within a period not exceeding nine months; and for the purposes of paragraph (e) so much only of the items mentioned at paragraph (e) shall be taken into account as do not exceed such percentage of prescribed liabilities as the Bank may specity by notice published in the Gazette. (8) Where a deposit taking institution or a specified financial institution, during any month, fails to maintain as liquid assets the amount which it is required to maintain under this

194 [No. ]
Provision
The Banking Services Act, 2014
Amendment
section, that institution shall pay
to the Bank in respect ofthe entire month aforesaid interest calculated at such rate as the Bank may, from time to time, by notice, approve on the sum by which the amount of the liquid assets (if any) maintained by that bank faUs short of the amount of the liquid assets which it is required to maintain. (9) A notice under subsection (2) may make different provisions as respects differeqt types of prescribed liabilities specified in the notice, so, however, that if any such notice prescribes marginal liquid assets requirements for increases in specified prescribed liabilities such requirements shall not exceed one . hundred per centum ofthe increase in such liabilities. (10) The power conferred by subsection (2) may be exercised (a) either in relation to all cases to which the power extends, or in relation to all those cases subject to specified exceptions, or in relation to any specified cases pr classes ofcase;

The Banking Services Act, 20J4 [No. ] 195 Provision Amendment (b) so as to make, as respects the cases in relation to which it is exercised (i) the full provision to which the power extends or any less provision (whether by way 0 f exception or otherwise); (ii) the same provision for all cases in relation to which the power is exercised or different provisions for different cases or classes of case, or different provisions as respects the same case or class of case for different purposes;

196 [No. ] The Banlcing Services Act, 2014 Provision Amendment (iii) any such provision either unconditionally or subject t 0 any specified condition. (11) The coming into operation of this section shall not affect any existing requirements on deposit taking institutions relating to the maintenance ofliquid assets that were in existence prior to the coming into operation of this
section, until and unless those
requirements are varied in accordance with this Act. (12) In subsection (9), "marginal liquid assets requirements" means in relation to any increase in specified prescribed liabilities, such percentage of the increase as is required to be maintained as liquid assets for the purposes ofthis section.".
Section 30 Delete the words "section 14 or IS ofthe Banking Act, or
(I)(a) section 14 or IS ofthe Financial Institutions Act, or".
Section 34A I. Renumber subsection (I) as the section.
2. Delete subsection (2).
3. In the section, as renumbered, delete the words
"Department of Supervision of Banks and Financial Institutions" and substitute therefor tbe words "Supervisory Department".

The Banking Services Act, 2014 [No. ] 197 Provision Amendment New section Insert next after section 34 the following as section 34AA 34AA "Superviso.ty 34AA.-( 1) The Supervisory Department Department shall be responsible for the promotion of the safety and soundness of deposit taking institutions and the deposit taking system and, for this purpose, the Supervisory Department shall be charged with (a) the supervision and examination of licensees under the Banking Services Act and any other enactment; (b) the supervision of (i) s p e c i fie d financial institutions; and (ii) credit bureaux licensed under
section 4 of the
Credit
Reporting Act;
(c) provide such analyses, advice and recommendations to the Supervisor and to the Supervisory Committee for the effective carrying out of their functions under this Act, and the Banking Services Act; (d) carry out such functions as may be assigned to it by the Supervisor, including furtherance of implementation of decisions of the Supervisor and of the Supervisory

198 [No. ] The Banking Services Act, 2014 Provision Amendment Committee under the Banking Services Act. (2) Unless directed otherwise, by the Supervisory Committee, the Supervisor shall settle the parameters of any regulatory collaboration, the duration of the collabOration, any cost sharing and other comparable matters related to the collaboration. (3) The Supervisor shall (a) cooperate with relevant agencies in the orderly resolution of failed deposit taking institutions, financial holding companies and financial groups to minimize impact on the financial system; (b) collaborate with regulatory counterparts and competent authorities, locally and overseas, in order to ensure that the appropriate level of collaboration and sharing of information can be undertaken with them; (c) facilitate regulatory I cooperation with one or more regulatory counterpart referred to in paragraph (b) for the purpose of implementing the directives issued under the rmancial stability mandate of the Bank,

Provision
The Ban/cing Services Act, 2014 [No. ] 199 Amendment and in cooperating or collaborating with regulatory counterparts pursuant to this Act, the Supervisor shall, ensure that this is done in with compliance Jamaica's international obligations and in accordance with the laws of Jamaica. (4) In this section, "collaboration" includes facilitating cooperation pursuant to information sharing to facilitate on-going supervision of licensees and financial groups, the investigation of regulatory breaches, fmancial and other crimes and related enforcement action and for development and implementation of strategy for the resolution of a financial institution in accordance with the parameters of any arrangement to strengthen financial sector oversight and formally implement coordinated monitoring and information sharing amongst the responsible financial regulatory agencies in 1amaica. (5) The Supervisor shall submit to the Parliament, through the Minister, an annual report relating generally to the execution of the functions of the Supervisor under this Act and the Banking Services Act and of the Supervisory Committee under the Banking Services Act. (6) At least every three years, there shall be a review undertaken by qualified, independent experts of (a) the effectiveness of the Supervisory framework as

200 [No. ] The Banking Services Act, 2014 Provision Amendment set out under this Act, the Banking Services Act and any other enactment; (b) the processes and procedures carried out in furtherance of the supervision mandate pursuant to this Act. the Banking Services Act and any other enactment; and (c) the performance of the Supervisor and Supervisory Committee in relation to their respective mandates under this Act, the Banking Services Act and any other enactment, and the report ofthis review shall be provided to the Minister and the Supervisor." .
Section 34B Delete section 34B and substitute therefor the following
"Officers of 34B.-{1) For the purposes ofsection Bank. 34A, the functions of the Supervisor under this Act, the Banking Services Act and any other enactment shall be carried out by the Governor. (2) The Board shall appoint (a) the Deputy Supervisor, on the recommendation of the Supervisor, who shall be a fit and proper person; and (b) such other officers and employees as may be

201
Provision
The Banking Services Act, 2014 [No.
Amendment necessary for the efficient operation ofthe Supervisory Department. (2A) The Deputy Supervisor shall be appointed under subsection (2) for a term of not less than five years and not more than seven years, subject to the conditions set out in paragraph 5 of the
Schedule and be eligible for reappointment so, however, that date of
expiration of the appointment of the Deputy Supervisor shall not be less than twelve months from the date of expiration of the appointment of the Supervisor. (2B) The Board may terminate the appointment of the Deputy Supervisor on the recommendation ofthe Supervisor for cause or where the Board is satisfied that the Deputy Supervisor has failed to meet the qualifications contained in paragraph 5 of the
Schedule.
(2C) A person below the rank of
Deputy Governor shall not be eligible for appointment as the Deputy Supervisor. (3) The Deputy Supervisor shall, subject to any directions of the Supervisor (a) be responsible for (i) the general administration of the Supervisory Department; and

202 [No. J
Provision
The Banking Services Act, 2014
Amendment
(ii) the technical supervision and examination operations ofthe Supervisory Department; and (b) perform such duties as may be assigned to him by the Supervisor. (4) In the absence or incapacity ofthe Supervisor, the Deputy Supervisor shall undertake the functions and responsibilities of the Supervisor as set out in this Act and the Banking Services Act. (5) The Supervisor, Deputy Supervisor and any officer appointed pursuant to subsection (2)(b) shall be fully employed in the service ofthe Bank and, while holding office, shall not, without the permission of the Board, occupy another office of employment, whether remunerated or not. (6) The Supervisor with the approval ofthe Board may, where the circumstances so warrant, in writing, authorize any other person to assist the Supervisor and the Deputy Supervisor in the performance oftheir functions under this Act. (7) Nothing contained in this section shall affect or prejudice the terms of any existing appointment or agreement, arrangements or memorandum of understanding in place relating to an

The Banking Services Act, 2014 [No. 203 Provision Amendment incumbent Deputy Supervisor at the date of commencement of this Act.". New section Insert next after section 34B the following34BB "Financial 34BB.--{l) For the purposes of this Regulatory Act, there is established a committee to Committee. be known as the Financial Regulatory Committee. (2) The objective ofthe Financial Regulatory Committee shall be to facilitate information sharing, coordination and cooperation among regulatory authorities. (3) The Financial Regulatory Committee shall establish appropriate policies and procedures by way of written agreement, arrangement or memorandum of understanding, subject to the approval, in writing, of the Minister, for the purposes ofmeeting the objectives set out in subsection (2). (4) The Financial Regulatory Committee shall consist of (a) the Governor, who shall be the chairman; (b) the Financial Secretary; (c) the Executive Director ofthe Financial Services Commission; and (d) the chief executive officer of the Jamaica Deposit Insurance Corporation.

204 [No.
Provision
The Banking Services Act, 1014
Amendment
(5) Nothing contained in this
section shall invalidate any agreement,
arrangement or memorandum of understanding that has been executed, in writing, between or among the parties named in subsection (4) for the objective set out in subsection (2) that was in existence at the time of the coming into operation of this section. (6) Subsections (I) and (2) of
section 340 and section 34E shall apply
mutatis mutandis to members of the Financial Regulatory Committee and any person acting in support ofthe Financial Regulatory Committee as they apply in relation to the authorized officer and other authorized person referred to in
section 340 or the persons specified in
section 34E.
(7) The Financial Regulatory
Committee shall meet at such times as may be necessary for the transaction of business, being not less than seven times in each year, and such meeting shall be held at any such places and times and on such days as the Committee may determine. (8) Proper records of all proceedings ofthe Financial Regulatory Committee shall be kept. (9) Subject to the provisions of this section, the Financial Regulatory Committee may make rules to regulate its proceedings.".

The Banking Services Act. 2014 [No. 205 Provision Amendment
Section 34C Delete section 34C and substitute therefor the following
"Interest in licensee.
34C.---(l) Where
(a) any authorized officer; or
(b) any person being considered for appointment pursuant to
section 34B,
is a shareholder (whether directly or indirectly) in any licensee under the Banking Services Act, specified financial institution or credit bureau, he shall notify the Supervisor, in writing, of his interest and the Supervisor shall so notify the Board, in writing. (2) The Board may, if it thinks fit upon receipt of a notice referred to in subsection (I), in writing require the officer or person concerned to dispose of any shares held by him in any licensee under the Banking Services Act, specified financial institution or credit bureau or ofany interest in such shares within such time as the Board may specify.".
Section 340 Delete section 340 and substitute therefor the following
"Secrecy of authorized officer.
34D.---( l) An authorized officer and any other person authorized pursuant to
section 34B to give assistance shall not
(a) disclose information regarding the operations ofany licensee under the Banking Services Act or specified financial institution to any person other than (i) the Minister or his nominee;

206 [No. The Banking Services Act, 2014 Provision Amendment (ii) the Governor, Senior Deputy Governor or Deputy Governors; (iii) any member of the Supervisory Committee through the Supervisor or Deputy Supervisor; (iv) any officer ofthe Supervisory Department; (v) the ChiefExecudve Officer of the Jamaica Deposit Insurance Corporation, the Executive Director of the Financial Services Commission, the Financial Secretary or his nominee, to facilitate coordination among financial regulatory agencies; (vi) the head of a regulatory counterpart, his deputy or a person fonnally

The Banking Services Act, 2014 [No. 207 Provision Amendment nominated to receive information on behalf of such head; (b) subject to paragraph (c), disclose other than for the purposes of this Act, or the Banking Services Act, any information regarding the affairs of a customer of a licensee under the Banking Services Act or specified financial institution, obtained in consequence of the performance of duties under this Act; (c) disclose other than for the purposes ofthe investigation of a fmancial crime, or the contravention of a licensee's obligation under any other enactment any infonnation, obtained in consequence ofthe perfonnance of duties under this Act. (2) Any person who contravenes the provisions ofsubsection (1) commits an offence and shall be liable on summary conviction in a Resident Magistrate's Court to a fine not exceeding three million dollars or to imprisonment for a tenn not exceeding two years, or on conviction in the Supreme Court to a fine or imprisonment.

208 [No. The Banking Services Act, 2014 Provision Amendment (3) No civil or criminal action, suit or other proceedings may be brought against any authorized officer or other person authorized under section 34B who in good faith makes a disclosure pursuant to section 340(1 ).".
Section 34E Delete section 34E and substitute therefor the following
"Protection 34E.-( I) No liability is incurred by forautJlO the Bank or any person specified in rized officers, paragraphs (a) to (d) as a result of etc. anything done by him bona fide in exercise of any power, or the performance of any function or duty, conferred or imposed by or under this Act, that is to say (a) an authorized officer; (b) the Minister; (c) any person appointed pursuant to section 34B; (d) any person appointed by the Minister pursuant to regulations made under this Act or appointed by the Supervisor pursuant to paragraph 1 (3) of Part C ofthe Fifth Schedule to the Banking Services Act or any other enactment to perform functions in connection with the temporary management of a licensee under the Banking Services Act or of a specified financial institution. (2) No action suit or other proceedings may be brought or instituted

The Banking Services Act, 2014 [No. 209 Provision Amendment personally against an authorized person, or any other person authorized under
section 34B, in respect of any lawful act
done or omission made in good faith, in the course of carrying out the provisions ofthis Act or the Banking Services Act.".
Section 34F 1. Delete subsection (1) and substitute therefor the
following
"(1) The Minister may, in accordance with the recommendations ofthe Bank, make regulations prescribing prudential criteria and minimum solvency standards for specified financial institutions that are not licensees under the Banking Services Act.".
2. Insert next after subsection (5) the following as
"(6) The Bank may, subject to affirmative resolution, make rules to be known as ''the Supervisory Rules", in relation to money laundering, terrorism financing and the proliferation of weapons of mass destruction.".
Section 47 Delete section 47 and substitute therefor the following
"Secrecy. 47.--{1) Except in so far as may be necessary for the due performance ofhis functions under this Act, every officer and servant of the Bank shall preserve, and aid in preserving, secrecy with regard to all matters relating to the affairs of any licensee under the Banking Services Act or any other financial institution, or of any customer of any such licensee under the Banking Services Act or any other financial institution, that may come to his knowledge in the course of his duties; and any such officer or servant who communicates any such matter to any person other than the Board or an officer ofthe Bank authorized in that behalf by

210 [No. ]
Provision
The Banking Services Act, 2014
Amendment the Governor or suffers or pennits any unauthorized person to have access to any books, papers or other records relating to any licensee under the Banking Services Act or any other financial institution, or to any customer of any such licensee under the Banking Services Act or any other financial institution, commits an offence and shall be liable on conviction thereof to a fine of three million dollars or to imprisonment with or without hard labour for a tenn not exceeding three years. (2) No officer or servant ofthe Batik shall be required to produce in any court any book or document or to divulge or communicate to any court any matter or thing coming under his notice in the perfonnance ofhis duties under this Act, except on the direction ofthe court or in so far as may be necessary for the purpose of carrying into effect the provisions of this Act. (3) Every officer and servant ofthe Bank and every external auditor of the Bank (a) shall preserve and aid in preserving secrecy with regard to all matters relating to the affairs of the Bank that may come to his knowledge in the course of his duties; and (b) shall not communicate any such matter to any person other than a person authorized in that behalf by the Minister or the Governor.

The Banking Services Act. 2014 [No. J 211 Provision Amendment (4) Any officer, servant or external auditor of the Bank who contravenes subsection (3) commits an offence and shall be liable on conviction in a Resident Magistrate's Court to a fme not exceeding two million dollars or to imprisonment for a term not exceeding two years.".
Schedule 1. Delete paragraphs I and 2 and substitute therefor
the following
"Tenure of office.

The term of office of every
director other than the Governor, the Senior Deputy Governor and the Financial Secretary shall be specified in the instrument appointing each director and (a) subject to the section 34B{2A) in relation to the Deputy Supervisor, or the Deputy Governors, the term shall not exceed five years; (b) for every other director, the term shall not exceed three years, but such director retiring on the expiration of his term of office shall, subject to paragraph 2, be eligible for reappointment. Disqualificationof directors.
A person may not be appointed
or remain a director who
(a) is a member ofeither House of Parliament; (b) is a director, officer or employee of or has any ownership interest in any

212 [No. ] The Banking Services Act, 2014 Provision Amendment licensee under the Banking Services Act, any other regulated financial institution or any specified financial institution or credit bureau; (c) is a member of the Council of the Kingston and St. Andrew Corporation or of any Municipal Council or
Parish Council ....
2. Delete paragraphs 8 and 9 and substitute therefor the
following
"Remunerationof directors.
8. There shall be paid to the
Governor and the other directors such remuneration, if any (whether by way of salaries, travelling or other allowances) as the Minister may determine. SharehoJdingsby directors.
9. Where a director contravenes paragraph 2 of this
Schedule, the director shall
declare any ownership interest or position to the Board and shall elect to (a) resign his position; or (b) dispose of the ownership interest within such time as may be directed by the
Board....

The Banking Services Act, 2014 [No. 213 ELEVENTH SCHEDULE (Section 144) Consequential Amendment ofEnactments Enactment Amendment Charities Act
Section 2 Delete the definition of "financial institution" and

substitute therefor the following
" "fmancial institution" means-
(a) a bank as defined in the Banking Services Act; (b) a merchant bank as defined in the Banking Services Act; (c) a building society as defined in the Banking Services Act; (d) a society registered under the Co-operative Societies Act and which carries on credit union business; (e) an insurance company registered under the Insurance Act; (t) a person licensed under the Bank of Jamaica Act to operate an exchange bureau; (g) a person licensed under the Securities Act as a dealer or investment adviser; (h) money transfer and remittance agents and agencies; (i) any other person declared by the Minister, by order published in the Gazette, subject to affirmative resolution, to be a financial institution for the purposes of this Act;". Companies Act
Section 38 Delete from subsection (8) the words "the Banking Act, the

Financial Institutions Act" and substitute therefor the words

"the Banking Services Act".

214 [No. The Banking Services Act, 2014 Enactments Amendment
Section 159 In subsection (l). delete paragraphs (a). (b), (c), (d), (e), (t),
(g) and (h) and substitute therefor the followingPart II of the Seventh
Schedule.
" (a) a public company;
(b) a private company whose articles provide otherwise; (c) a bank as defined under the Banking Services Act; (d) a merchant bank as defined under the Banking Services Act; (e) an insurance company registered under the Insurance Act; (t) a company licensed under the Securities Act; (g) a building society as defined under the Banking Services Act; (h) a society registered under the Co-operative Societies Act and which carries on credit union business; (i) an insurance company registered under the Insurance Act; (j) a subsidiary of a company, falling within any of the categories in paragraphs (a) to (i),". l.Tn paragraph 8, delete sub-paragraphs (a) (b), (c), (d), (e) and (t) and substitute therefor the following " (a) a public company; (b) a bank as dermed under the Banking Services Act; (c) a merchant bank as defined under the Banking Services Act; (d) an insurance company registered under the Insurance Act; (e) a licensee under the Securities Act; (1') a building society as defined under the Banking Services Act; or

The Banking Services Act, 20J4 [No. 215 Enactments Amendment (g) a society registered under the Co-operative Societies Act.".
2. In paragraph II, delete sub-paragraphs (a) (b), (c), (d),
(e) and (f) and substitute therefor the following " (a) a public company; (b) a bank, merchant bank or building society as defined under the Banking Services Act; (c) an insurance company registered under the Insurance Act; (d) a licensee under the Securities Act; (e) a society registered under the Co-operative Societies Act.". Deposit Insurance Act
Section 2 I. In subsection (I), delete the definition of "financial insti

tution" and substitute therefor the following " "financial institution" means (a) a bank as defined under the Banking Services Act; (b) a merchant bank as defined under the Banking Services Act; (c) a building society as defined under the Banking Services Act; (d) subject to section (3) any other person or undertaking whose business includes the accepting of deposits and who has been designated, by the Minister under section 2 of the Bank of Jamaica Act, to be a specified financial institution.".
2. In subsection (2), delete from
(a) paragraph (b) the words "the Banking Act, Building Societies Act, the Deposit Insurance Act, the Financial Institutions Act" and substitute therefor the words "Banking Services Act, the Deposit Insurance Act"; and

216 [No. The Banking Services Act;20T4 Enactments Amendment (b) paragraph (c) the words "the Banking Act, the Deposit Insurance Act, Building Societies Act, the Financial Institutions Act" and substitute therefor the words "Banking Services Act, the Deposit Insurance Act".
Section 5 In subsection (2) (b), delete the words "the Banking Act,
Bank of Jamaica Act, Building Societies Act, Financial Institutions Act," and substitute therefor the words "the Bank of Jamaica Act or Banking Services Act,". Financial Investigations Division Act
Section 2 Delete the defmition of"fmancial institution" and substitute
therefor the following
" "fmancial institution" means
(a) a bank as defined under the Banking Services Act; (b) a merchant bank as defmed under the Banking Services Act; (c) a building society as defined under the Banking Services Act; (d) a society registered under the Co-operative Societies Act and which carries on credit union business; (e) an insurance company registered under the Insurance Act; (f) a person licensed under the Bank of Jamaica Act to operate an exchange bureau; (g) a person licensed under the Securities Act as a dealer or investment adviser; (h) money transfer and remittance agents and agencies; (i) any other person declared by the Minister, by order subject to affirmative resolution, to be a financial institution for the purposes of this Act;".

The Banking Services Act. 2014 [No. ] 217 Enactments Amendment Insurance Act
Section 2 In subsection (3)(c )(iI), delete the words "the BankingAct,
the Deposit Insurance Act, the Financial Institutions Act" and substitute therefor the words "Banking Services Act, the Deposit Insurance Act". Moneylending

Act

Section 13 In subsection 0), delete from
(a) paragraph (d) the words "licensed under the Financial Institutions Act" and substitute therefor the words "operating under the Banking Services Act as a merchant bank"; and (b) paragraph (e) the words "licensed under the Banking Act" and substitute therefor the words "operating under the Banking Services Act as a bank" Proceeds of

Crimes Act

Section 2 In subsection (1), delete th.e definition of "fmancial institution" and substitute therefor the following
" '''fmancial institution" means
(a) a bank as defined under the Banking Services Act; (b) a merchant bank as defined under the Banking Services Act; (c) a building society as defined under the Banking Services Act; (d) a society registered under the Co-operative Societies Act and which carries on credit union 7 business; (e) an insurance company registered under the Insurance Act; (t) a person licensed under the Bank of Jamaica Act to operate an exchange bureau;

218 [No. ] The Banking Services Act, 2014 Enactments Amendment (g) a person licensed under the Securities Act as a dealer or investment adviser; (h) money transfer and remittance agents and agencies; (i) any other person declared by the Minister, by order subject to affirmative resolution, to be a financial institution for the purposes of this Act;". Securities Act
Section 2 1. In subsection (I), delete paragraph (j) ofthe definition
of "securities" and substitute therefor the following "(j) certificates of deposit issued by banks or merchant banks;".
2. In subsection (2), delete paragraph (a) and substitute
therefor the following
"(a) a bank as defined in the Banking Services Act;";
3. In subsection (3), delete from
(a) paragraph (c) the words "Banking Act" and substitute therefor the words "Banking Services Act"; and (b) paragraph (d) the words "any licensee under the Financial Institutions Act" and substitute therefor the words "any merchant bank under the Banking Services Act".
Section 26 Delete subsection (4)(b )(i) and substitute therefor the fol~
lowing
"(i) a deposit taking institution under the Banking Services Act;" .

The Banking Services Act, 2014 [No. ] 219 Enactments Amendment Securities (Collective Investment Scheme) Regulations, 2013 Regulation 2 Delete paragraph (I) (b) (i) and substitute therefor the fol·

lowing
"(i) a deposit taking institution under the Banking Services Act;". Te"orism Prevention Act
Section 2 In subsection (J). delete the definition of "financial institu

tion" and substitute therefor the following " "fmancial institution" means- (a) a bank as defined under the Banking Services Act; (b) a merchant bank as defined under the Banking Services Act; (c) a building society as defined under the Banking SmicesAct; (d) a society registered under the Co-operative Societies Act and which carries on credit union bW!iness; (e) an insurance company registered under the Insurance Act; (f) a person licensed under the Bank of Jamaica Act to operate an exchange bureau; (g) a person licensed under the Securities Act as a dealer or investment adviser; (h) money transfer and remittance agents and agencies; (i) any other person declared by the Minister. by order subject to affinnative resolution, to be a financial institution for the purposes ofthis Act;".

220 [No. The Banking Services Act, 2014 Enactments Amendment United Nations Security Council Resolutions (Implementation) Act
Section 2 Delete the definition of "financial institution" and substitute
therefor the following
" "financial institution" means
<a) a bank as defined under the Banking Services Act; (b) a merchant bank as defined under the Banking Services Act; (c) a building society as defined under the Banking Services Act; (d) a society registered under the Cooperative Societies Act and which carries on credit union business; <e) an insurance company registered under the Insurance Act; (t) a person licensed under the Bank of Jamaica Act to operate an exchange bureau; (g) a person Iicensed under the Securities Act as a dealer or investment adviser; (h) money transfer and remittance agents and agencies; (i) any other person designated by the Minister. by order published in the Gazette. subject to affirmative

The Banking Services Act, 2014 [No. ] 221 Enactments Amendment resolution, as a financial institution . for th~ purposes of this Act;". Passed in the Honourable House ofRepresentatives with two hundred and sixty-eight (268) amendments this 4th day ofJune, 2014. MICHAEL A. PEART Speaker. Passed in the Honourable Senate with seventy-five (75) 8Jl)endrnents this 13th day ofJUIle, 2014. FLOYD E. MORRIS President. On the 18th day of June, 2014 the Honourable House of Representatives agreed to the amendments made by the Senate. MICHAEL A. PEART Speaker. This printed impression has been care

fully compared by me with the authenticated

impression o/the/oregoing Act. and has been

found by me to be a true and correct printed

copy ifthe said Act.

;; ! , JIe.o:jt\er p.. ezu.,Ke. l ljcl;l Cleric to the Houses 0/Parliament.