Bermuda’s financial-services regulator is to name and shame people and institutions punished for breaking the rules.

The Bermuda Monetary Authority’s adoption of a more public approach to enforcement was outlined by Jeremy Cox, the organisation’s chief executive officer, in the BMA’s 2016 Business Plan, released today.

“Until now, the Authority has chosen to limit publicly disclosed details of enforcement actions to a fairly brief notification in its annual report,” Mr Cox said.

“But from 2016 onwards, the Authority will publish details of any use of its enforcement powers. Such publicity will be in the form of a press release issued by the Authority following conclusion of any appeal or after expiry of an appeal period.

“The release will detail the nature of the enforcement action, the size of any penalty, the identity of the entity or person involved and the circumstances of the breach.”

He added that details would be included on the BMA’s website and in its annual report.

“This increased transparency must be underscored as critical to the reputation of the jurisdiction and is intended to demonstrate to those who rely on our supervisory adjudications that their trust is not misplaced and that Bermuda-based entities found to be deficient in meeting their obligations run the risk of being required to account publicly for their actions,” Mr Cox added.

The BMA CEO also expressed his belief in the importance of dialogue between regulators and industry in the interests of avoiding burdening the financial services with unnecessarily complex regulation that could harm economic growth.

“What is needed is a financial-services sector able to apply its considerable resources and expertise in support of more acceptable levels of growth,” Mr Cox said. “What is not needed is a lame financial-services sector so mired in layers of complex regulation that it spends more time figuring out how to respond to supervisory edicts than doing what it does best, namely helping troubled economies get back on track.

“That might mean encouraging the world’s banking sector to stimulate more credit to flow. It may also mean that regulators stop treating the banking sector as convenient whipping boys responsible for the current economic malaise.

“The challenge facing industry and regulators around the world is to develop an appropriately framed dialogue based not on rules but on agreed standards. That does not mean financial services gets a free pass.

“In fact, industry should always be required to demonstrate a consistently high standard of behaviour and execution. In my view, a better dialogue will pave the way for a better partnership which will in turn provide the common ground necessary for change to take place.”

Mr Cox argued that the BMA’s years-long close partnership with industry had not compromised its ability to regulate, and added that “our results speak for themselves”.

“There is a simple but powerful message underlying all of this,” Mr Cox said. “The Bermuda paradigm has been shown to work not only for industry and government but for the greater good of the country as a whole.

“That it manages to improve on traditional ‘rules-only’ systems of regulation indicates that there is a workable alternative to the imposition of overly complex regulatory constraints.”

The Business Plan document details the regulator’s plans for this year, including progress with the Basel III regulations for banks, the Corporate Service Providers licensing process, draft legislation for money-service businesses, banking intervention powers to support the Special Resolution Regime legislation passed by Parliament last month and the preparation for the 2018 anti money-laundering and anti terrorism-financing assessment of Bermuda by the Caribbean Financial Action Task Force.

The BMA also outlined its aim to implement an Alternative Investment Fund Managers Directive opt-in regime for Bermudian-based investment managers passporting into the European Union.

The 2016 Business Plan is available under the heading of Related Media on this webpage.