Central Bank of Barbados Market Conduct Guideline July 2024

MARKET CONDUCT GUIDELINE
CENTRAL BANK OF BARBADOS
July 2024

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MISSION
One of the key objectives of the Central Bank of Barbados (“the Bank”) is to promote financial stability, which is conducive to the orderly and sustained economic development of Barbados. Through the Financial Institutions Act, Cap. 324A (FIA), the Bank is charged with the responsibility for ensuring the safety and soundness of the financial system by administering a regulatory framework that contributes to public confidence in a competitive financial system.

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TABLE OF CONTENTS
MISSION..................................................................................................................................................................... 2
1.0 INTRODUCTION.............................................................................................................................................. 5
2.0 APPLICATION................................................................................................................................................... 5
3.0 ACCOUNTABILITY .......................................................................................................................................... 5
4.0 SCOPE ................................................................................................................................................................ 6
5.0 MARKET CONDUCT OBLIGATIONS........................................................................................................... 7
5.1 Fees & Charges...................................................................................................................................... 7
Non-Objection Requirement for New Fees and Increases........................................... 7
Differentiation of Fees.............................................................................................................. 7
Electronic Funds Transfer (EFT)............................................................................................. 7
Disclosure of Fees & Charges................................................................................................. 8
5.2 Access to Banking and Financial Services for Vulnerable Customers................................. 9
Accessibility and Inclusion...................................................................................................... 9
Specialised Accounts and Services...................................................................................... 9
Staff Training ............................................................................................................................... 9
Enhanced Communication..................................................................................................... 9
Monitoring and Continuous Improvement ...................................................................... 9
5.3 Account Opening ................................................................................................................................. 9
Streamlined Application Process.......................................................................................... 9
Enhanced Communication and Support........................................................................... 9
Timeliness of Decisions..........................................................................................................10
Handling Disputes and Complaints...................................................................................10
Monitoring and Compliance................................................................................................10
5.4 Account Closures................................................................................................................................10
Fair and Justifiable Reasons for Closures.........................................................................10
Process and Communication...............................................................................................10
Management of Funds at Closure......................................................................................11
Dispute Resolution and Record Keeping.........................................................................11
Monitoring and Continuous Improvement ....................................................................11
Policy Consistency ...................................................................................................................11
5.5 Use of Plain Language & Presentation ........................................................................................11
Principles of Plain Language................................................................................................11
Effective Presentation.............................................................................................................12
Implementation of Plain Language & Presentation Principles.................................12
Training and Quality Assurance ..........................................................................................12
Feedback and Continuous Improvement........................................................................12
6.0 COMPLAINTS.................................................................................................................................................12

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6.1 Establishing Effective Complaints Handling Mechanisms....................................................12
6.2 Visibility and Accessibility of Complaint Procedures..............................................................13
6.3 Transparent Communication with Customers.........................................................................13
6.4 Timelines and Resolution Framework .........................................................................................13
6.5 Monitoring, Training, and Continuous Improvement............................................................13
7.0 ROLE OF THE BANK .....................................................................................................................................14
7.1 Regulatory Oversight and Guidance............................................................................................14
7.2 Monitoring and Compliance Checks............................................................................................14
7.3 Enforcement and Corrective Actions...........................................................................................14
APPENDIX 1............................................................................................................................................................15

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1.0 INTRODUCTION
In furtherance of its responsibility to regulate and supervise entities licensed under the Financial Institutions Act, Cap. 324A (FIA), and drawing on its powers under section 114A of FIA, the Bank has developed and issued this Market Conduct Guideline (Guideline). This Guideline is a product of those consultations and represents a strategic effort to ensure fair financial practices and protect consumer interests. In recent times, a significant public discourse over perceived excessive fees and charges by commercial banks has underscored the need for regulatory review. Responding to these concerns, the Central Bank of Barbados (Bank) engaged in extensive consultations with commercial banks and other stakeholders to address these issues comprehensively. This document outlines the standards and expectations for all licensees operating within Barbados, emphasising our commitment to uphold financial stability, consumer trust, and the integrity of the financial system. By incorporating feedback from stakeholders and recent developments in financial technologies and services, it seeks to ensure that our framework remains robust, relevant, and responsive to the needs of all participants in the financial sector.
2.0 APPLICATION
This Guideline appliesto all entitieslicensed under FIA and any other financial institution as designated by the Bank. It is intended that this document will extend to future recognised entities such as digital currency operators and fintech companies, ensuring that emerging financial services are conducted within a framework that promotes fairness and transparency. The principles outlined herein must be adhered to by all branches, subsidiaries, and agents operating within our jurisdiction, thereby ensuring a level playing field in the financial landscape of Barbados.
3.0 ACCOUNTABILITY
It is imperative that all licensees not only comply with this Guideline, but also actively cultivate a culture of ethical behaviour and consumer-centric practices. This Guideline contains both advisory and mandatory requirements. Advisory matters are expressed by way of the phrase “the licensee or licensees may” and licensees are permitted to implement alternative but effective measures in these circumstances. Mandatory requirements are expressed using the phrase “the licensee or licensee must.” Each licensee must implement effective governance structures that ensure this Guideline is integrated into daily operations and decision-making processes. The Board of Directors of each licensee holds ultimate responsibility for this integration, supported by regular training and compliance assessments to ensure all staff, at every level, remain aligned with the principles of this Guideline. The Board of Directors of each licensee must ensure verifiable performance indicators are developed in order to obtain reasonable assurance that licensees comply with this Guideline.

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4.0 SCOPE
This Guideline is designed to provide a comprehensive framework governing the conduct of all licensees within Barbados. They apply to a wide array of financial activities and interactions, covering the following key areas:

1. Product and Service Design: All financial products and services must be designed having
   regard to transparency and fairness to consumers, including the protection from unfair practices. The features and terms of the financial products and services offered are to be clearly communicated to consumers.
2. Marketing and Advertising: All marketing materials and advertising campaigns must adhere
   to standards of honesty and clarity, avoiding misleading representations and ensuring that all promotional content is consistent with the actual characteristics and terms of the products and services offered.
3. Sales Practices and Methods of Communication: Clearly communicate to the consumer the
   manner in which products and services are sold and distributed. Sales practices must be transparent, consistent, and comprehensible.
4. Customer Interaction and Support: All aspects of customer interaction, from initial inquiries
   and onboarding, to ongoing support and dispute resolution must be documented in the licensee’s policies and procedures. This ensures that customers receive courteous, fair, and informed treatment at every stage of their relationship with a financial institution.
5. Fee Structures and Pricing: Specific attention must be given to the transparency and fairness
   of fees and pricing structures. This ensures that fees are justified and communicated clearly, and that pricing practices are fair and consistent with the value provided.
6. Complaints Handling and Dispute Resolution: Establishing clear procedures for handling
   complaints and resolving disputes, which must be easily accessible, fair, and efficient, providing timely redress for consumers.
7. Monitoring and Reporting: Periodic self-assessments of adherence to this Guideline should be
   conducted and findings reported to the Bank upon request.
8. Special Considerations for Vulnerable Groups: Ensuring that the needs of vulnerable groups,
   such as the elderly and individuals with disabilities are specifically addressed, promoting inclusivity and fairness in financial services.

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5.0 MARKET CONDUCT OBLIGATIONS
Licensees are obligated to engage in fair, transparent, and ethical market conduct at all times. This includes the clear disclosure of all fees and charges associated with their products and services, ensuring that consumers are fully informed and able to make informed financial decisions. In light of the recent public discourse, this Guideline pays special attention to ensuring that fees are justified and proportionate, reflecting the cost of services provided without undue burden on consumers. Continuous monitoring and regular reporting to the Bank are mandatory to demonstrate compliance with these obligations.
5.1 Fees & Charges
Non-Objection Requirement for New Fees and Increases Criteria for Non-Objection: Licensees must request a non-objection from the Bank of any proposed new fees or increases in fees and charges on their products and services no less than sixty (60) days prior to the proposed effective date of implementation. The request must include a detailed rationale for the proposal, the impact on the licensee’s customers, together with any other supporting documentation. The Bank shall inform the licensee of its decision within thirty (30) days of the submission date. Notification Protocol: Upon receiving a non-objection, the licensee must give their customers at least thirty (30) days notification prior to the effective date of implementation. This notification should include a clear explanation of the changes and the reasons therefor. Instances where there will be a reduction in fees or charges require no prior notification. Differentiation of Fees Policy on Fee Differentiation: Licensees must establish clear policies that differentiate fees between various customer segments such as retail, corporate/commercial, small and micro enterprises. These policies should reflect the varying needs and transaction volumes of different customer types and include specific examples to guide implementation. Equitable Fee Structures: Fee structures must not disproportionately affect any customer segment, particularly vulnerable (See Section 5.08) or low-income groups. Cash Management Services No-Fee Threshold: No fees are chargeable on transactions that total less than $10,000 per day. This threshold is applicable regardless of customer profile or size. Cash Management Services Fee Caps: For transactions that exceed the threshold above, any fees applied must still adhere to the Bank’s non-objection policy and be justified by clear cost-related factors, ensuring that charges remain reasonable. Electronic Funds Transfer (EFT) No Fee EFT Services: Licensees must ensure that they establish policies and procedures to promote financial inclusion and support the digital economy. This includes the provision of domestic electronic

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CENTRAL BANK OF BARBADOS fund transfer services to individuals at no cost. There must be no fees or charges for individuals sending or receiving funds via batch processing and real-time processing. Transfer Limits: Licensees must also ensure that no measures are put in place to limit transfers between the accounts of the same client within the same licensee. While they may impose daily limits on transfers between the accounts of separate clients or those of its clients and customers of other licensees, these limits must be clearly communicated and justified based on security concerns or fraud prevention strategies. Disclosure of Fees & Charges Visibility Standards: Licensees must prominently display or make readily available all fees and charges applicable to their products and services offered at each local subsidiary/branch/representative office/agent. These fees and charges must also be clearly and easily identifiable on their website and social media pages. This should include a clear and concise presentation, using plain language to ensure that all customers can easily find and understand the information. More specifically, licensees must:
a. Disclose the effective interest rate as well as all charges related to the product or service. b. Disclose accountservice charges upon account opening and thereafter upon customer request.
c. Advise customers on interest rates applied to their accounts, the method of computing interest
charges, and the frequency. d. Advise customers of all available options for obtaining the products and services that they require, including low and no fee options. e. Advise customers, through announcements in the press, written notice, website or any other means, of any changes in the interest rate, the method of its calculation, the time at which it becomes payable, and generally of any other changes as it relates to products or services. f. Provide details of charges for products and services not included on the schedule of fees at the time of purchasing the product or service, and upon request thereafter by the customer. g. Advise customers, upon request, about the amount of interest accrued but not yet charged to their accounts. h. Inform customers of interest rates charged and/or additional fees in cases where accounts are overdrawn without prior agreement or beyond agreed limits.
i. Provide a copy of the terms and conditions of the product or service, where applicable, for
consideration and acceptance.
Updates and Changes: Licensees must update any changes to fees at each local subsidiary/branch/representative office/agent; on their website; and social media pages within five (5) business days after they notify customers, to ensure ongoing transparency and compliance.

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5.2 Access to Banking and Financial Services for Vulnerable Customers
Accessibility and Inclusion
Design Principles: Licensees must ensure that all physical and digital banking facilities are accessible to everyone, regardless of age, disability, or economic status. This includes adequate signage, ramps, tactile guides, audio systems, wheelchair accessibility and digital interfaces that accommodate various disabilities. Specialised Accounts and Services No-Fee and Low-Fee Accounts: Each commercial bank must provide a no-fee basic banking account to its clients. Additionally, specially tailored low-fee accounts should be available for vulnerable groups, including pensioners, minors, and students, ensuring these accounts are equipped with features that cater to their specific needs. Staff Training Employee Sensitivity Training: Licensees’ staff must undergo periodic training on how to effectively interact with and assist vulnerable customers. Enhanced Communication Accessible Information: Licensees must cater to the needs of varied customers. This may include the availability of information on products and services in multiple formats (e.g. braille, large print, audio recordings) to ensure it is accessible to all customers, including those with visual or hearing impairments. Monitoring and Continuous Improvement Feedback Mechanisms: As part of customer satisfaction and marketing surveillance, licensees may incorporate mechanisms for receiving feedback from vulnerable customers about the accessibility and usability of banking and financial services, with a commitment to ongoing adjustments based on this feedback.
5.3 Account Opening
Streamlined Application Process
Applications: Licensees must streamline the account opening process to ensure it is straightforward and efficient and utilise the risk-based approach to customer onboarding as permitted in the Bank’s AML/CFT Guideline. The aim is to balance the need for security, legal obligations, and customer convenience. Licensees may utilise digital tools to speed up the verification and approval processes. Enhanced Communication and Support Proactive Communication: Licensees are required to provide applicants with periodic updates about the status of their application. This should include clear timelines and any next steps that the applicant needs to take.

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Accessibility: Communication channels should be varied (online, phone, in-person) and accommodate applicants' preferences and needs, ensuring inclusivity for all potential customers. Timeliness of Decisions Decision Timeline: Licensees should communicate the decision on account openings to the applicant within three (3) to five (5) business days under normal circumstances. If delays are expected, licensees must notify the applicant promptly with an estimated timeline and reasons for the delay. Handling Disputes and Complaints Internal Dispute Resolution (IDR): Applicants who disagree with a decision regarding their account application have the right to a formal review. This process should be straightforward, with clear procedures on how to initiate a review and what the review process entails. See also Section 6.0. Transparency in Decision Making: Applicants should receive an explanation of any negative decision. This transparency helps build trust and may reduce the number of disputes. For exceptions, see Section 6.4.6. Monitoring and Compliance Oversight and Examinations: The Bank will conduct periodic examinations of licensees' account opening processes to ensure compliance with this Guideline. Licensees are expected to maintain records of all applications, communications, and decisions for review. Customer Feedback: Licensees may actively seek feedback from new customers about their account opening experience, using this information to continually improve their processes.
5.4 Account Closures
Fair and Justifiable Reasons for Closures
Valid Grounds for Closure: Licensees must clearly define and communicate the circumstances under which an account may be closed. For exceptions, see Section 5.4.6. Prohibited Practices: Licensees are explicitly prohibited from closing an account solely based on a customer's demographic factors (such as age, race, gender, or economic status). Process and Communication Notification Requirements: Prior to closing an account, the licensees must notify the customer in writing at least thirty (30) days in advance, explaining the reasons for the closure and outlining any possible actions the customer can take to prevent it. For exceptions, see Section 5.4.6.

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Resolution Opportunities: Licensees must provide a clear process for customers to address the concerns leading to potential account closure. This process should be fair, timely, and allow customers to present additional information or corrective actions. Management of Funds at Closure Funds Disbursement: Licensees must ensure that upon closure, all funds in the account are promptly transferred according to the customer's instructions. If no instructions are available, the licensee must continue to attempt contact with the customer and observe the requirements in the FIA and the Bank’s Abandoned Property Guideline. Transparency in Handling Funds: Licensees must provide detailed information to the customer about the handling of funds post-closure, including any interest calculations and fees applied during the transition. Dispute Resolution and Record Keeping Right to Appeal: Customers should have the right to appeal an account closure decision. The appeals process should be straightforward, accessible, and provide a fair review by an independent body. Documentation and Compliance: Licensees are required to document all communications and decisions related to account closures and retain these records for a minimum period five (5) years or such other period as advised by the Financial Intelligence Unit (FIU) or court to ensure compliance with regulatory standards. Monitoring and Continuous Improvement Oversight and Feedback: The Bank will monitor licensees' practices regarding account closures through periodic examinations and customer feedback analysis to ensure practices are fair and compliant with this Guideline. Customer Satisfaction Surveys: Licensees are encouraged to conduct periodic surveys and obtain feedback to identify areas for improvement and ensure customer needs are being met. Policy Consistency Nothing in the foregoing supersedes obligations placed on licensees under the Money Laundering and Financing of Terrorism (Prevention and Control) Act and AML/CFT Guideline issued by the Bank, including relating to record-keeping and tipping off.
5.5 Use of Plain Language & Presentation
Principles of Plain Language
Clear Communication: Licensees must use plain language in their communications to customers, including applications, forms, and agreements that make them easier to understand and use. Technical terms should be clearly defined.

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Purpose and Clarity: Documents must clearly state their purpose upfront and organise information in a logical, reader-friendly manner. Effective Presentation Visual Clarity and Accessibility: Licensees may use headers, bullet points, and appropriate fonts to ensure readability and include accessibility options like large print and compatibility with screen readers. Consistent Use of Terms: Licensees must maintain consistency in terminology throughout all documents to avoid confusion and avoid acronyms or define them clearly when first used. See
Appendix 1.
Implementation of Plain Language & Presentation Principles Licensees must implement measures and practices to address the principles listed in Appendix 1. Training and Quality Assurance Staff Training: Licensees must conduct workshops and training sessions to educate staff on the importance of plain language and how to implement it effectively. Document Review Process: Licensees must establish a robust review process that includes checking for plain language compliance before documents are finalised. Feedback and Continuous Improvement Customer Feedback Loop: Licensees must set up a process for collecting and analysing customer feedback to facilitate the continual refinement and improvement of documentation.
6.0 COMPLAINTS1
6.1 Establishing Effective Complaints Handling Mechanisms
Comprehensive Internal Dispute Resolution (IDR) System: Licensees must have a robust internal dispute resolution (IDR) mechanism that is easy to access, free of charge to the customer, and capable of resolving complaints in a fair, timely, and effective manner. This system should be well-publicised and accessible both online and in all physical locations. 1 A complaint is defined as any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, any person about the provision of, or failure to provide, a financial service which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience; and relates to an activity of that financial institution.

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6.2 Visibility and Accessibility of Complaint Procedures
Clear Information: Licensees must display detailed information about how to lodge a complaint conspicuously at all customer touchpoints, including websites, mobile apps, local subsidiaries, and branches. This information should include step-by-step guides on how to file a complaint, what information is needed, and what customers can expect from the process. Multiple Channels for Lodging Complaints: Customers should be able to lodge complaints through multiple channels, including in-person, by telephone, online, and via email, ensuring accessibility for all customers regardless of their preferred communication method.
6.3 Transparent Communication with Customers
Acknowledgment of Complaints: All complaints must be acknowledged within three (3) to five (5) business days through the channel chosen by the customer to lodge the complaint. Licensees may reserve written responses for complex issues requiring detailed explanations. They should inform customers of the complaint-handling process, expected timelines, and any next steps required on their
part.
Updates: Licensees must provide updates to the customer on the status of their complaint at least once every fifteen (15) business days, until resolution.
6.4 Timelines and Resolution Framework
Resolution Timelines: Licensees must set clear and realistic timelines for complaint resolution, adhering to the 0/15/30 rule: immediate resolution where possible; otherwise, a response or resolution within fifteen (15) business days; and for complex issues, a resolution within thirty (30) business days. If an extension is necessary, for example in circumstances that involve third parties, they must notify customers of the reason and give a new estimated resolution date. Final Response: Upon resolution, customers should receive a final response in writing that outlines the details of the decision, reasons for the decision, and any actions taken or proposed remedies. See also
Section 5.4.6.
6.5 Monitoring, Training, and Continuous Improvement
Employee Training: All employees involved in handling complaints should receive regular training on the complaint resolution process, focusing on customer service skills, empathy, and fairness. Examination and Review: Licensees must conduct regular assessments to ensure compliance with complaint handling procedures. Feedback and data from complaint resolutions should be used to identify trends, improve services, and rectify recurrent issues. External Dispute Resolution (EDR): For complaints not resolved to the customer's satisfaction, the customer may refer the matter to the Bank for a resolution. The Bank will endeavour to use its legislative

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CENTRAL BANK OF BARBADOS powers to resolve the matter, which may include referral of the matter to the Financial Services Tribunal for adjudication.
7.0 ROLE OF THE BANK
7.1 Regulatory Oversight and Guidance
Policy Enforcement: The Bank is responsible for enforcing adherence to the Market Conduct Guideline. This includes regular examinations, reviews of internal reports submitted by licensees, and monitoring of compliance metrics. Guidance & Explanation: The Bank will undertake continuous guidance to licensees on the interpretation and implementation of the Guideline. This will be facilitated through, for example, the issuance of explanatory materials that clarify complex areas of the Guideline.
7.2 Monitoring and Compliance Checks
Regular Examinations and Assessments: The Bank will conduct comprehensive examinations of licensees at scheduled intervals to ensure ongoing compliance with the Guideline. These examinations will review practices, procedures, and records. Real-Time Monitoring Tools: The Bank will develop and implement real-time monitoring tools that allow the Bank to track key compliance indicators dynamically. This will help in quickly identifying areas where licensees may be falling short.
7.3 Enforcement and Corrective Actions
Corrective Measures: In cases of non-compliance, the Bank will observe measures that are proportionate to the severity and frequency of the infractions and may include warnings, monetary penalties, or more severe regulatory actions. Transparency in Enforcement: The Bank will ensure transparency in the enforcement process and may publish non-confidential information where it takes action against non-compliant institutions.

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APPENDIX 1
Table 1: Plain Language and Presentation Principles
Principle Guidance Operational Guideline
Know your audience
In all communications directed to customers, licensees need to:

• Be able to explain why the reader
  needs the information in the document.
• Ensure the document is easy to
  understand, inviting and useful.
• Find the right balance between its
  marketing, compliance and legal objectives, and requirements in order to describe its products accurately but also in a clearly understandable way.
• Determine the needs of the reader
  for whom the document is written.
• Think from the reader’s point of
  view.
• Put yourself in the reader’s shoes:
  what questions would he or she ask?
• Keep in mind the average reader’s
  level of knowledge on the subject matter.
• Do not underestimate the reader’s
  intelligence, but do not assume the reader understands the subject matter of the document.
• Consider the reader’s familiarity
  with procedures and terms.
  Make your material understandable by planning your text.
  Let customers know what they are looking at and provide them with the information they need. Avoid ambiguities; be direct, concise, and to the point. Use a logical pattern and make the links between your ideas obvious. Remove any information that is not essential to your purpose. Will customers understand the document the first time they read it?
• Replace technical terms with
  equivalent everyday words wherever possible.
• Use concrete rather than abstract
  words as much as possible.
• Be precise when describing ideas
  and products.
• Be consistent by using the same
  terminology.
• Minimise use of acronyms; define
  them the first time you use them; and be consistent.
• Use examples and tables to
  present comparisons or to explain a calculation.
• Keep sentences short.
• Use the active voice (“The
  customer opens an account,” not
  “Accounts are opened by customers”).
  Write clearly Organise your ideas and structure your writing.
• Weigh the importance of every
  idea. Which is the most important?
  What content is necessary?

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Principle Guidance Operational Guideline

• Put the main message – the most
  important idea – first.
• Group related ideas together.
• Present the information in a logical
  order.
• Use lots of headings and
  subheadings. Descriptive headers will help the reader scan and absorb the information more easily and quickly.
• Use short and simple sentences
  and paragraphs.
• Use footnotes for explanatory
  information or examples.
• In larger documents, include a
  table of contents for easier
  reference.
  Use visual presentation to enhance your text
  Create a reader-friendly format. The way information is presented on the
  page is almost as important as the
  words used to describe it.
  Documents should be visually inviting.
• Use a readable and appropriate
  typeface and font size.
• Use layout and spacing to separate
  sections.
• Leave sufficient space between
  lines of text and paragraphs.
• Make key information easy to find.
• Use a text box or other graphical
  treatment to emphasise a particularly important idea.
• Highlight important information in
  boxes or bulleted lists.
• Use bold type and/or underlining
  to emphasise important information.
  Test your material Licensees must test their documents in order to determine whether they are user-friendly. It is important to test application forms and agreements that the average reader will use. If the average customer can read the entire document without feeling confused and without having to go
• Test documents on a variety of
  readers.
• Monitor how customers complete
  application forms and identify areas that cause confusion or misunderstanding.
• Seek feedback through focus
  groups and surveys.
• Add a statement to each
  document inviting readers to comment on its clarity and to

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Principle Guidance Operational Guideline back and read it again, you have passed the test. suggest how to make it easier to understand.

• Use a checklist to ensure that plain
  language and presentation principles were followed.