No.      of 2021.                     Banking (Amendment) Bill, 2021.             Saint Christopher and                                                                                                                                Nevis.

SAINT CHRISTOPHER AND NEVIS

No.       of 2021

A BILL to amend the Banking Act, Cap. 21.01

BE IT ENACTED by the Queen’s Most Excellent Majesty by and with the 

advice and consent of the National Assembly of Saint Christopher and Nevis, and by the authority of the same as follows: 

1.        Short Title.

                        This Act may be cited as the Banking (Amendment) Act, 2021.

•        Interpretation.

                        In this Act, “principal Act” means the Banking Act, Cap. 21.01.

•        Amendment of section 2 – Interpretation.

                        Section 2 of the principal Act is amended as follows:

• in subsection (1):

• in the definition of “affiliate” by deleting paragraph (e) and substituting the following paragraph:

                                    “(e) a company which: 

                            (i)  has the same beneficial owner; or 

                            (ii) shares common management, 

        and has any interlinked business with F,”;

• in the definition of “banking business” by deleting the expression, “frequent” in sub-paragraph (a)(ii);

• by inserting immediately after the definition of “borrower group” the following definition:

                        ““branch” means “any office or place of business of a licensed                                              financial institution, other than the principal office where a                                              licensed financial institution carries on any banking business                             and which facilitates the  

                        (a)       acceptance of deposits and other repayable funds; or

                        (b)       issuing and administering means of payment                                        including credit cards, travellers’ cheques, bankers’                                             drafts, and electronic money,

                                    but does not include automatic banking machines and                                                bureaus de exchange”;

• by inserting immediately after the definition of “business of a financial nature” the following new definition:

                        “CARICOM national” means a national of a member state of the                                           Caribbean Community including the CARICOM Single                                            Market and Economy          established by Article 2 of the                                      Revised Treaty of Chaguaramas signed at Nassau, The                                             Bahamas on 5th July 2001”;

• by deleting the definition of “capital base”;

• in the definition of “exposure”, in paragraph (a), by inserting immediately after the word, “acceptance”, the expression, “or any other asset recognized by the Central Bank as an exposure”;

• in the definition of “financial group” by deleting the expression, “conduct” and substituting the expression, “carry on”;

                        (viii)     in the definition of “large exposure” by deleting the expression, “the             capital base” and substituting the expression, “tier 1 capital”;

                        (ix)      in the definition of “licensed financial holding company”, by                            replacing that definition as follows:

                                          “licensed financial holding company” means any person or                                                                   incorporated entity licensed to conduct banking business under                                                   this Act and includes a former licensed financial holding                                                           company”;

                      (x)      by deleting the definition of “licensed financial institution” and                                               substituting the following definition:

                        “licensed financial institution” means a person or incorporated entity                                    licensed to carry on banking business and includes a former                               licensed financial institution”; 

                      (xi)      in paragraph (a) of the definition of “officer” by inserting “branch                               manager, country manager” after “vice-president”;

                      (xii)     in paragraph (b) of the definition of “officer” by deleting the                                         expression, “by-laws” and substituting the expression, “bye-laws”;

                      (xiii)     by inserting immediately after the definition of “officer” the                                          following definition:

                        “outsource” means to enter into a contractual arrangement with a                                         third-party service provider, where the service provider                                            manages functions, business activities, processes or products                                that are, or could be undertaken by the licensed                                                           financial institution.”;

                      (xiv)  by deleting the definition of “place of business” and substituting the                                    following definition:

                        “place of business” means a physical location, site, structure, or                                           other similar facility, through which a licensed financial                                              institution or licensed financial holding company transacts                                            its affairs or carries on business”;

                      (xv)     by deleting the definition of “relative” and substituting the following                                      definition:

                        “relative” means a spouse, son, daughter, stepson, stepdaughter,                                                    adopted son, adopted daughter, brother, sister, father or                                                            mother”;

• by inserting immediately after the definition of “significant shareholder the following definition:

                        “spouse” includes:

      (a)       a woman who, for a period of not less than five years, has                             cohabited with a man as if she were in law his wife; and

      (b)       a man who, for a period of not less than five years, has                                  cohabited with a woman as if he were in law her husband”;

• by inserting immediately after the definition of “subsidiary” the following definition:

                      “tier 1 capital” means the total of:

                   (a)       paid-up share capital, statutory reserve fund, share                                                     premium account, retained earnings and any other capital                                              account approved by the Central Bank, in the case of local                                           licensed financial institutions; or

                   (b)       such other capital account or similar measure as approved                                        by the Central Bank, in the case of a licensed branch of a                                        foreign financial institution, less any amount by which that                                     total has been impaired in either case”;

      (b)       in subsection (2):

            (i)        in sub-paragraph (a)(iv) by deleting “an employee or” and substituting “a    business”; and

            (ii)       in sub-paragraph (b)(iii) by deleting “or employee”;

            (c)       by inserting the following subsection:

“                     (3)       In this Act, for the purposes of the payment of licence fees, a reference to a local financial institution includes a foreign financial institution that is a CARICOM national.”

• Amendment of section 3 – Requirement for Licence

                  Section 3 of the principal Act is amended in paragraph (5)(a) by deleting “financial institution” and substituting “corporation”.

• Amendment of section 4 – Examination of books of persons carrying on banking
            business without a licence

            Section 4 of the principal Act is amended

• in subsection (2), by deleting the expression, “conduct” and substituting the expression, “carrying on”; and

•  by deleting subsection (4) and substituting the following subsection:

“           (4)       A police officer who accompanies an officer in whose name an order           has been granted under subsection (2), may in the case of resistance break open a     door and remove an impediment or obstruction to the entry, search or seizure.”

• Amendment of section 5 – Appointment for receiver for failure to licence.  

Section 5 of the principal Act is deleted and the following section is substituted –

“      5.         Appointment for receiver for failure to licence. 

                   Notwithstanding subsection 3(5), if a person is found under subsection 4(2)           to be carrying on banking business without a licence, the Central Bank may appoint a receiver for the person under paragraph 138(1)(b).”

• Amendment of section 7 – Application for licence

                Section 7 of the principal Act is amended as follows

                (a) in paragraph (1)(e) by deleting the expressions, “holding company” and
                           substituting “group”; and

                (b) in sub-section (2), by inserting the expression, “or subsidiary” after the expression,                      “branch”.

•        Amendment of section 14 – Revocation of licence

                        Section 14 of the principal Act is amended in paragraph (1)(j) by deleting the         expression, “conduct” and substituting the expression, “carry on”.

•        Amendment of section 19 – Authorisation of location and approval of new business premises

                        Section 19 of the principal Act is amended in subsections (7), (8) and (9) by deleting “electronic banking system” and substituting “automatic banking machine”.

1.        Amendment of section 42 – Revocation of licence of financial holding company

                        Section 42 of the principal Act is amended in paragraph (1)(f) by deleting “conduct” and substituting “carry on”.

1.        Amendment of Part V – Financial Requirements and Limitations

                        Part V is amended by inserting immediately before section 44, the following section:

“          44A.   Definition of specified assets

                        In this Part, “specified assets” means freely transferable assets free from any charge, lien or encumbrance and includes:

                (a)       notes and coins which are legal tender in the Currency Union                                   and such foreign notes and coins as the Central Bank may                                       specify;

                (b)       balances at the Central Bank;

                (c)       net balances at licensed financial institutions in the Currency                                                 Union but where the balances are negative they will be                                                         subtracted from the specified assets;

                (d)       treasury bills and other securities issued or guaranteed by a                                     Participating Government and securities issued by a                                           statutory corporation wholly owned by a Participating                                         Government and approved by the Central Bank;

                (e)       bills of exchange and promissory notes eligible for                                                       rediscount by the Central Bank and warehouse warrants or                                       their equivalent securing possession of goods against which                            the Central Bank may grant advances, within the limits and                                        in accordance with the evaluation fixed by the Central Bank;

                (f)        net balances at licensed financial institutions in the monetary                                    areas as the Central Bank may approve and the Central Bank                          may provide for the treatment to be accorded the balance or                                 any portion in respect of the head office of a licensed                                      financial institution organised abroad, and where any                                              balances are negative they will be subtracted from specified                           assets;

                (g)       money at call in monetary areas approved by the Central                                           Bank under paragraph (f), bills of exchange bearing at least                            two good signatures drawn on and payable at any place in                                      the approved monetary areas, and treasury bills issued by the                                government of a country in any approved monetary areas                                                and maturing within one hundred and eighty days.”

1. Amendment of section 44 – Minimum paid-up or assigned capital 

                  Section 44 of the principal Act is amended by

                (a)       deleting the expression, “Saint Christopher” in subsections (1) and (2) and                                                 paragraph (3)(a) and substituting the expression, “the Currency Union”;                                         and

                (b)       inserting after subsection (4) the following new subsection:

                            “           (5)       The Central Bank may approve the holding of assigned                                              capital in the form of specified assets.”

1.  Amendment of section 45 – Maintenance of reserve fund

                   Section 45 of the principal Act is amended by

•             deleting subsection (2) and substituting the following subsection:

            “           (2)       A licensed financial institution or licensed financial holding     company shall not declare, credit or pay any dividend or make any other        transfer from profits if the declaration, credit, payment or transfer would             result in:

                           (a)       an impairment of the capital required under section                                                      44;

                           (b)       inadequate and inappropriate forms of liquidity                                                 contrary to section 48; or

                          (c)     negative retained earnings or accumulated deficit”;                                                   and

                  (b)       inserting after subsection (2) the following new subsections:

            “           (3) Subject to subsections (4) and (5) a licensed financial      institution or licensed financial holding company shall not, except with     prior written approval of the Central Bank, declare, credit or pay any            dividend or make any other transfer from profits if the licensed financial institution or licensed financial holding company realises a net loss for    that financial year.

                        (4)  A licensed financial institution or licensed financial holding         company shall seek the approval of the Central Bank under subsection (3)    at least fifteen days before the intended declaration, credit, payment or             transfer.

                        (5)       The Central Bank may grant approval under subsection (3)    on terms and conditions the Central Bank deems fit.”.

1.  Amendment of section 49 – Limit on exposures

                Section 49 of the principal Act is amended by deleting the expression, “capital base”, in subsections (1) and (6) and substituting the expression, “tier 1 capital”. 

      15.    Amendment of section 50 – Restrictions on exposures to related parties

               Section 50 of the principal Act is amended in subsection (4) by deleting the expression, “the capital base” and substituting the expression, “tier 1 capital”.

1.      Amendment of section 51 – Restrictions on lending to employees

                 Section 51 is amended by

• deleting subsection (3) and substituting the following subsection:

       “           (3)       A licensed financial institution shall not, except with the prior written approval of the Central Bank, grant or permit to be outstanding to its   employees any unsecured advances or credit facilities which in the aggregate      amount for any one employee exceeds the annual remuneration of such employee.”;         and

• deleting subsection (4) and substituting the following subsection:

       “           (4)       The Central Bank may grant approval under subsection (3)                            on terms and conditions the Central Bank deems fit.”.

1. Amendment of section 53 – Prohibition on engaging or investing in trade and
             outsourcing

                    Section 53 of the principal Act is amended as follows

      (a)       in subsection (2) by deleting “conduct” and substituting “carry on”; and

      (b)       by deleting “the capital base” wherever it appears and substituting “tier 1                            capital”.

1. Amendment of section 54 – Financial subsidiaries permitted

                        Section 54 of the principal Act is amended by

•       inserting after subsection (1) the following new subsection:

            “           (1A) A licensed financial institution shall not own a subsidiary            company that does not engage solely in permissible activities.” 

•       inserting after subsection (4) the following new subsection:

            “           (5)       For the purposes of this section “permissible activities”           includes business of a financial nature and any other activities that the    Central Bank may determine.”; and

•      deleting the expression, “the capital base” wherever it appears and       

     substituting the expression, “tier 1 capital”.

1. Amendment of section 55 – Restrictions on investments in real property

                        Section 55 of the principal Act is amended by

                  (a)       deleting subsection (1) and substituting the following subsection:

            “           (1)       A licensed financial institution shall not directly or         indirectly, except with the prior approval of the Central Bank, purchase,          acquire or lease real or immovable property unless it is necessary for the   purpose of carrying on its business as a licensed financial institution                   including provision for future expansion and housing its officers and       employees.”;

                  (b)       deleting subsection (2) and substituting the following subsections:

            “           (2)       If a licensed financial institution holds any real or          immovable property held or leased by it before the commencement of this            Act for purposes other than for carrying on its business as a licensed             financial institution, the licensed financial institution shall comply with          this section within a period of three years or a further period as may be         determined by the Central Bank.”; and

               (c)         inserting the following subsection:

           “              (4)    The Central Bank may grant approval to a licensed                                         financial institution under subsection (1) on terms and conditions the                           Central Bank may deem fit.”

•    Amendment of section 57 – Maintenance of specified assets

                        Section 57 is amended by repealing subsection (7).

•    Amendment of section 60 –  Appointment of external auditor

                        Section 60 of the principal Act is amended

•       in subsection (2) by:

            (i)        deleting the expression, “six” and substituting the expression,                                   “nine”; and

• deleting “three” and substituting “six”; and

•       by deleting subsection (3) and substituting the following subsection:

            “           (3)       A person who has served the maximum period under section 60(2) may not be re-appointed as the external auditor until after a           period of five years has elapsed since the last appointment.”

•    Amendment of section 69 – Audited financial statements

                        Section 69 of the principal Act is amended by deleting subsection (5) and substituting the following subsection-

“           (5)       Subject to section 91, if a licensed financial institution or a licensed financial holding company fails to comply with the requirements of:

          (a)       subsection (1) within six months of the end of its financial                              year; or

                                                (b)       subsections (2) to (4),

it is liable to a penalty of fifty thousand dollars and three thousand dollars for every day of the default.”

• Amendment of section 80 – Failure to comply with remedial actions

                        Section 80 of the principal Act is deleted and the following section is substituted

“           (80) (1)           A licensed financial institution or an affiliate of a licensed financial institution that fails to comply with a requirement or prohibition the
Central Bank imposes on the licensed financial institution under this
Part, is liable to a penalty of one hundred thousand dollars and a further
penalty of ten thousand dollars for each day of the default.

                  (2)           A director, officer, employee or significant shareholder of a licensed financial institution who fails to comply with a requirement or
prohibition the Central Bank imposes on the director, officer, employee
or significant shareholder under this Part, is liable to a penalty of fifty
thousand dollars and to a further penalty of five thousand dollars for
each day of the default.”

•             Amendment of section 88 – Notification of removal of directors and officers

                                    Section 88 of the principal Act is deleted and the following section is           substituted

                                    “           88 (1) If an action under this Part requires the removal of a director                         or officer of a licensed financial institution, the Central Bank shall serve on                             the licensed financial institution and on the director or officer concerned,
                                    written notice of the intended removal.

               (2) The licensed financial institution and the director or officer served with a notice under subsection (1) may, within fourteen days commencing from the day after which the notice is served, make written representations and a request for face-to-face representation to the Central Bank.

• If the Central Bank receives a request for a face-to-face representation under subsection (2), the face-to-face representation shall take place within fourteen days of receipt of the request.

           (4) The Central Bank shall take the representations into account in deciding whether to remove the director or officer.

           (5) If the Central Bank is of the opinion that the public interest may be prejudiced by the director or officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations specified in subsections (2) and (3), the Central Bank may make an order suspending the director or officer and the suspension shall not extend beyond the period for making representations.

• If the Central Bank decides to remove the director or officer, the 

                                        Central Bank shall, within seven days of the written or face to face                                                  representation notify the director or officer and the licensed financial                                          institution of the removal order made under this Part.

       (7) The director or officer ceases to hold office on the date the removal order is made or a later date specified in the removal order.

                                                (8)       If the director, officer or licensed financial institution is                                                     aggrieved by the decision of the Central Bank under subsection (6), the                                              director, officer or the licensed financial institution may, within fourteen                                        days of the decision, appeal to the High Court but the appeal shall not                                            operate as a stay of the decision under this section unless the High Court                                     directs otherwise.   

• Amendment of section 89 – Submission of returns and production of information   as required by the Central Bank

                        Section 89 of the principal Act is amended in paragraph (3)(c) by deleting the       expression, “the capital base” and substituting the expression, “tier 1 capital”.

• Amendment of section 92 – Disclosure of basis for charges and fees  

                        Section 92 of the principal Act is amended by inserting the expression, “to the Central Bank” after the expression, “made”.

• Amendment of section 97 – Minimum criteria for determining whether a person is fit and proper 

                        Section 97 of the principal Act is amended in subsection (2) by inserting immediately after paragraph (h), the following new paragraph

       “           (i)        whether the person is a director or officer of, or directly or                                                      indirectly concerned in the management of a corporation locally or                                       abroad, that is compounding with or suspending payments to its                                           creditors.”.

• Amendment of section 101 – Notification to Central Bank of appointment of officers and directors

                        Section 101 of the principal Act is deleted and the following section is substituted

                  “           101.    Notification to Central Bank of appointment of officers and directors

                                          (1)       A licensed financial institution or licensed financial holding                             company shall give written notice to the Central Bank of the proposed                                      appointment or election of a director or officer at least sixty days prior to                                            the appointment or election of the director or officer.

                         (2)       On receipt of the notice under subsection (1) the Central                                Bank shall conduct an investigation to determine whether the proposed                                   director or officer satisfies the fit and proper criteria in section 97.

•       On completion of its investigation, the Central Bank shall

                                    inform the licensed financial institution or licensed financial holding                                     company in writing that:

                        (a)       the requirements of section 97 have been satisfied                                          and it has no objections to the proposed appointment                         or election of the director or officer; or

                        (b)       the requirements of section 97 have not been                                       satisfied, the manner in which the requirements have                                not been met and that it objects to the appointment.

•       Despite subsection (1), if prior notification of the 

                                    appointment or election of a director or officer of a licensed financial                                               institution or licensed financial holding company is not possible, the                                                licensed financial institution or licensed financial holding company:

                                        (a)       may appoint or elect the director or officer,                                                         conditional on the Central Bank’s confirmation                                              under subsection (3) that the director or officer                                     satisfies the requirements of section 97; and 

                                       (b)       shall within five days of the appointment or election                             give written notice to the Central Bank of the                                      conditional appointment or election of the director or                            officer specifying the reasons for the appointment or                           election of the director or officer without prior                                      approval.

•             If the Central Bank receives a notice under subsection (4) and is not satisfied       that a director or officer meets the requirements of section 97, the Central Bank:

               (a)       shall direct the removal of the director or officer; and

               (b)       may notify in writing the person whose removal is required by                                   serving on the person a copy of the direction under paragraph (a).”.

• Amendment of section 103 – Removal and disqualification of director or officer

                        Section 103 of the principal Act is amended

            (a)       in paragraph (1)(a) by deleting the expression, “two-thirds of”; 

                        (b)       by deleting subsection (2) and substituting the following subsection:

            “           (2)       Subject to subsection (2A) and prudential standards issued                  by the Central Bank, a person who:

                    (a)       has been declared bankrupt;

                    (b)       has been sentenced for an offence involving, a term                                        of imprisonment exceeding six months or sentenced                             to imprisonment in default of the payment of a fine;

                              (c)       has been a director or officer of a company which has                                                 been wound up by a court or has been placed in                                                  receivership;

                            (d)       has been a director or officer of, or directly or                                                    indirectly concerned in the management of a former                                     licensed financial institution or body
                                        corporate locally or abroad, the licence of which has                                        been revoked shall not, without the prior approval                                                  of the Central Bank, act or continue to act as a                                         director or officer of, or be directly or indirectly                                                  concerned in any way in the management of any                                                          licensed financial institution or licensed                                                                    financial holding company;” and

                  (c)      by inserting immediately after subsection (2) the following new subsection:

                “           (2A) Paragraph (2)(d) does not apply if the revocation of the licence                        was due to:

                        (a)       its amalgamation with another licensed financial institution                            or licensed financial holding company or other company; or

                        (b)       its voluntary winding up.”

• Amendment of section 104 – Right to make representation

                        Section 104 of the Act is deleted and the following section is substituted

                  “      104.    (1)       A licensed financial institution or licensed financial holding company to which a direction is given and a person who is served a copy of the direction under subsection 101(5) or subsection 103(4) may, within fourteen days commencing from the day after which the direction is given, make written representations and a request for a face-to-face representation to the Central Bank.

                           (2)       If the Central Bank receives a request for a face-to-face representation under subsection (1), the face to face representation shall take place within fourteen days of receipt of the request.

                           (3)       The Central Bank shall take the representations into account in deciding whether to confirm the direction.”

• Amendment of section 105 – Notice of confirmed removal

                        Section 105 of the principal Act is deleted and the following section is substituted

           “105. – Notice of confirmed removal. 

                      (1)       If the Central Bank decides to confirm the direction it shall, within seven days of the written or face to face representation as the case may be, serve written notice of the confirmation on the licensed financial institution or the licensed financial holding company and the person whose removal is required.

                      (2)       If the licensed financial institution, the licensed financial holding                       company or the person whose removal is required is aggrieved by the decision                  of the Central Bank under subsection (1), the licensed financial institution, the                            licensed financial holding company or the person whose removal is required             may, within fourteen days of the decision, appeal to the High Court, but the                      appeal shall          not operate as a stay of the decision under this section unless the                              High Court directs otherwise.” 

• Amendment of section 107 – Effective date of removal

                        Section 107 of the principal Act is amended by deleting the expression, “subsection (2)” and substituting the expression, “subsection (5)”.

• Amendment of section 108 – Failure to comply with a direction

                        Section 108 of the principal Act is amended by deleting the expression, “subsection (2)” and substituting the expression, “subsection (5)”.

• Amendment of section 109 – Failure to comply with section 103

                        Section 109 of the principal Act is deleted and the following section is substituted

“           109.    Failure to comply with section 103.

                        (1)  A licensed financial institution which fails to comply with section 103 is liable to a penalty of one hundred thousand dollars and ten thousand dollars and ten thousand dollars and ten thousand dollars for each day of the default. 

                        (2)   A director or officer of a licensed financial institution who fails to comply with section 103 is liable to a penalty of fifty thousand dollars and five thousand dollars for each day of the default.”

• Amendment of section 131 – Capital increase by existing shareholders.                                 

                        Section 131 of the principal Act is amended in paragraph (1)(b) by deleting “three”           and substituting “ten”.

• Amendment of section 137 – Termination of official administration

                        Section 137 of the principal Act is amended by deleting paragraph (2)(b) and substituting the following paragraph

“           (b)       the licensed financial institution or licensed financial holding company cannot be rehabilitated and the Central Bank issues a decision to commence receivership and liquidation proceedings under Part X.” 

•   Amendment of section 138 – Grounds of receivership

                          Section 138 of the principal Act is amended by deleting subsection (1) and substituting the following subsection

“(1) The Central Bank may appoint a receiver for:

• a licensed financial institution or licensed financial holding company if:
• it is insolvent;
• it is not viable;
• its capital is impaired or its condition is otherwise unsound;
• it has experienced substantial dissipation of assets or earnings due to any of the grounds for action by the Central Bank under subsection 75(1);
• it or its directors, officers, employees, or significant shareholders wilfully violate or fail to comply with an order or direction of the Central Bank under sections 75 to 87;
• its business is being conducted in an unlawful or imprudent manner;
• the continuation of its activities is detrimental to the interests of its depositors;
• it conceals or refuses to submit any of its records or its operations for examination as provided for in section 74, or has otherwise obstructed such examination;
• its licence has been revoked in accordance with sections 14 or 76; 
• official administration is terminated pursuant to paragraph 137(2)(b); 
• it is a bridge financial institution and  its designation as a bridge financial institution terminates pursuant to sub-paragraph 186(3)(a) or the Central Bank initiates receivership pursuant to subsection 186(5); or

                        (b)       a person who is found under subsection 4(2) to be carrying on banking                                          business without a licence.”

•  Insertion of Section 138A 

                        The principal Act is amended by inserting immediately after section 138, the         following new section 138A

                        “          138A. Receivership and compulsory liquidation in respect of a                                       person under section 138(1)(b)

                      The provisions of subsection 138(2) and section 139 to section 157, 

shall apply to a person under paragraph 138(1)(b) with the necessary modifications .”

• Amendment of section 140 – Commencement and notice of receivership

                        Section 140 of the principal Act is amended

(a)       in subsection (1), by deleting the expression, “and revocation of       licence”.

                                    (b)       in subsection (3), by deleting the expression, “revocation of the                                                        licence and”; and

                                    (c)       by deleting subsection (4) and substituting the following subsection:

“           (4)       The notice shall also specify that

• authorisations of persons to engage the financial responsibility of the licensed financial institution or licensed financial holding company have been cancelled; and
• persons who previously had authorisation to give instructions on behalf of the licensed financial institution or licensed financial holding company with respect to payment or transfer of the licensed financial institution’s or licensed financial holding company’s assets or assets managed by the licensed financial institution or licensed financial holding company are no longer so authorised.”.

• Amendment of section 147 – Avoidance of pre-receivership transfers

                        Section 147 of the principal Act is amended in paragraph (1)(g) by deleting the expression, “one hundred” and substituting the expression, “two hundred”.

.

• Amendment of section 168 – Report, publication and disposal of abandoned            property

                        Section 168 of the principal Act is amended in subsection (1) by deleting the expression, “ninety days” and substituting the expression, “three months”.

• Amendment of section 169 – Abandoned property to vest in the Crown

                        Section 169 of the principal Act is deleted and the following section is substituted-

“           (1)       Any abandoned property paid into the custody of the Central Bank under subsection 168(1), shall vest in the Crown fifteen years from the date on which it was paid into the custody of the Central Bank.

            (2)       Any abandoned property paid into the custody of the Central Bank prior to the commencement of this Act shall vest in the Crown fifteen years
from the date of commencement of this Act.”

• Amendment of section 174 – Failure to file report or to pay property

                        Section 174 of the principal Act is deleted and the following section is substituted-

“           174.    A licensed financial institution or licensed financial holding company which fails to comply with subsections 168(1) and 168(4) and subsection 170(2) is liable to a penalty of five thousand dollars and for a further penalty of one thousand dollars for each day of default.”

• Amendment of section 178 – Secrecy of information

                        Section 178 is amended by deleting subparagraph (2)(b) and substituting the following paragraph-

            “           (b)       a licensed financial institution or a director, officer, secretary,                                                employee, agent, auditor, receiver,  official administrator or official                           liquidator of the licensed financial institution, from providing access                            to confidential information of the licensed financial institution that                                         is necessary to conduct  due diligence in connection with a potential                                acquisition of assets and liabilities of the licensed financial                                                  institution, whether through direct transfer or through a merger or                                 similar corporate transaction.”.

• Amendment of section 180 –  Administrative penalties to be paid to the credit of Central Bank 

                        Section 180 of the Act is amended by deleting subsection (1) and substituting the following subsection-

“(1) The penalties imposed under sections 9(3), 19(9), 19(10), 44(4),
       56(2), 57(8), 68, 69(5), 80, 96, 109 and 174 shall be paid to the
       Central Bank.”.

• Amendment of section 186 – Bridge financial institutions and asset management vehicles

                 Section 186 of the principal Act is deleted and the following section is substituted

                 “     186.    Bridge financial institutions and asset management vehicles

“(1)      A Participating Government may establish a bridge financial institution       for the purpose of acquiring and managing the assets and liabilities of a   licensed financial institution that is subject to official administration or             receivership under Part IX or Part X for a period of up to twelve months.

(2)       The Central Bank may grant an extension of the period referred to in           subsection (1) for up to four consecutive periods of twelve months each. 

(3)       The designation of a licensed financial institution as a bridge financial        institution shall terminate if:

            (a)       the period under subsection (1) and any subsequent extensions                               undersubsection (2) expire; 

            (b)       the bridge financial institution:

                  (i)        is sold to another person,   or licensed financial institution                              or licensed financial holding company, that is not a bridge                                    financial institution; or 

                  (ii)       amalgamates with another licensed financial institution that                           is not a bridge financial institution; or

            (c)       satisfies the capital requirements of sections 44 and 46.

(4)       Where the designation of a licensed financial institution as a bridge financial institution terminates pursuant to subparagraph (3)(a) the bridge     financial institution shall be placed into receivership and liquidated. 

(5)       The Central Bank may initiate receivership of a bridge financial institution in accordance with Part X, prior to the expiration period identified in        subparagraph (3)(a).

(6)       A bridge financial institution established under subsection (1) shall be         licensed under this Act and shall be subject to all of the provisions of this       Act, except the capital requirements of sections 44 and 46. 

(7)       A Participating Government may establish an asset management company          for the purpose of acquiring, managing, and disposing of problem assets      of a financial institution pursuant to Part IX or Part X.”.

1. Amendment of section 192 – Repeal and Savings

                        Section 192 is amended in paragraph 2(a) by inserting the expression, “or continued in force” after the expression, “made”.

1. Amendment of Schedule I

                        Schedule I is deleted and the following schedule is substituted

“SCHEDULE I

Fees for Licensed Financial Institution

Sections 7(1), 8(5), 9(1), 36(1), 38(2)

Description	Non Refundable Application Fee	Initial Licence Fee	Annual Licence Fee
Branch – Foreign Financial Institution	$20 000	$120 000	$120 000
Local Licensed Financial Institution	$20 000	$80 000	$80 000
Licensed Financial Holding Company – Foreign	$20 000	$60 000	$60 000
Licensed Financial Holding Company – Local	$20 000	$40 000	$40 000
Branch – Local Licensed Financial Institution	–	–	$20 000
Additional Branch – Foreign Financial Institution	–	–	$30 000

”

1. Amendment of Schedule III

                        Schedule III of the principal Act is deleted and the following schedule is substituted-

“SCHEDULE III

Section 181

Offences in respect of which liability to conviction may be discharged by payment of a fixed penalty

OffenceSectionFixed penaltyCarrying on banking business without a licence 3(5)$250 000Refusal to make relevant documents available for examination 4(5)$2 500Use of restricted words, names and practices16(5)$125 000Failure to disclose transfer 31(1)$1 000Failure to disclose acquisition of interest 31(2)$2 500Failure to disclose and allow access to books and records74(3)$25 000Providing information that is false in any material particular74(4)$25 000Restriction on advertising likely to mislead the public93(2)$25 000Failure to declare related interest110$5000Deceiving statements and obstruction of audit or authorised examination111$15 000Failure of management to comply with the law112$7 500Failure to assist the official administrator 129(5)$7 500Interference with receivers access to or control over office, books of accounts and other records145(4)        $7 500”