Government is circulating a draft bill to members of the private sector to gain feedback on a new Business Investment Licensing Act.

And a Cabinet paper will go to the Attorney General's Chambers for drafting soon to address increasingly urgent issues relating to the supervision and regulation of financial institutions.

The Finance Minister Grant Gibbons has assured that moves to beef up supervisory and regulatory controls for financial institutions have long been underway.

And he said jurisdictions that fail to satisfy international supervisors face severe penalties from the non-aligned bodies or punitive measures from onshore countries concerned about the overall financial system.

The need for changes here at home, was clearly delineated by Bermuda Monetary Authority (BMA) general manager Malcolm Williams in a speech last week. And in response, Dr. Gibbons pointed out, "Because of the need to move fairly quickly on this, we have carved out as a principle step, amendments to legislation covering deposit-taking institutions such as banks, deposit companies and credit unions. There are also issues in relation to trust companies as well, even though they are not deposit-taking right now. "That legislation will be drafted and will be introduced in the next couple of months in Parliament, to make sure that we are in-step with these international supervisory bodies.'' The Minister said, "In the case of the need for changes in the BMA, the financial institutions we were talking about legislating for, regulating and supervising, were primarily the banks, deposit companies and credit unions. "But that has been broadened recently too, with the addition of collective investment schemes and eventually other types of financial institutions as well.'' A year ago this spring, Government adopted the principles of the Swiss-based non-governmental, world supervisory body, the Basle Committee on banking Supervision. Global interest in improving the supervision and regulation of all financial institutions inspired the establishment of a working committee of representatives of the Finance Ministry, the BMA and the Attorney General's Chambers last summer. The committee determined the need for specific legislation to address some of the issues, which is now part of Government's legislative programme for this year.

Gibbons explains draft bill of the things that Mr. Williams outlined in his speech to Rotary. They include amendments to our legislation which would start to de-politicise the licensing process to make it more of a technical decision, based on the functioning parametres of the business.

"It will also focus more carefully on the fitness and propriety of senior management of deposit taking institutions. That includes board members, as well, and also on the fitness and propriety of the ownership. The concept of a reporting accountants regime is also on the cards, using accountants in private practice to conduct work that will be a supervisory function.

Evaluation groups will be coming in from outside to not just check to ensure that we have the appropriate legislative environment, but to also ensure that institutions like the BMA or the Registrar of Companies are doing their job.'' BUSINESS BUC