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INTRODUCTION During FY 2003/04, further efforts were made to strengthen the regulatory framework of the financial sector through continued enhancements in the legislative framework and strengthening of the overall institutional structure. Financial Institutions Services Limited (FIS) continued its role as agent of the Financial Sector Adjustment Company Limited (FINSAC), of executing the winding-down operations of the company. Enhancement of Legislative Framework During FY 2003/04, ongoing efforts to reform the legislative framework of the private pension system in Jamaica culminated in the development of pension legislation entitled "Pensions (Superannuation Funds and Retirement Schemes) Bill". The Pensions Bill focuses on the effective supervision and regulation of all private pension schemes. It provides for the registration and licensing of existing and future Superannuation Funds and Retirement Schemes, the registration of Trustees, and the licensing of administrators and investment managers. The Bill also provides for investigations by the Financial Services Commission, and the termination and winding up of superannuation funds and retirement schemes. Responsibility for general administration of the Act lies with the Financial Services Commission. The Pensions Bill was tabled in Parliament in December 2003 and a Pensions Seminar was held in January 2004 to sensitize stakeholders to the provisions of the Bill. A Select Committee was appointed by Parliament to examine the Bill. The Committee will provide a report with proposed amendments to the House of Representatives after an examination of submissions from the Life Insurance Companies Association (LICA), and the Private Sector Organization of Jamaica (PSOJ), and deliberations on the Bill. The Bill will then be debated in the Senate and both Houses are expected to pass it before the end of the fiscal year. Regulations with respect to investment, governance, responsibilities of actuaries and auditors, registering and licensing of Superannuation Schemes and Approved Retirement Schemes are currently being drafted and discussions are taking place with the various stakeholders. Legislation to bring money transfer and remittance agents and agencies under the regulatory and supervisory ambit of the Bank of Jamaica was successfully passed in FY 2003/04. Entities are now required to obtain the approval of the Minister of Finance and Planning to engage in the business of remittance and money transfer. Action has also been initiated to amend several pieces of legislation including the Money Laundering Act, the Bank of Jamaica Act, the Financial Services Commission Act, the Banking Act, the Financial Institutions Act, and Building Societies Regulations. These amendments are intended to combat money laundering, prevent the financing of terrorism and ensure that Jamaica meets its international treaty obligations. Institutional Strengthening Further developments were made in strengthening the Financial Services Commission (FSC), during FY 2003/04. The process of team building continued, supported by the Technical Assistance Programmes of the Caribbean Development Bank and the Inter-American Development Bank. The Financial Services Commission also made progress in enhancing its regulatory capabilities through continued staff training. Training was facilitated in several key areas, namely, pensions, securities enforcement & oversight, integrated market regulation, risk management, international accounting standards, money laundering, insurance, capital markets & bond markets, investigation, records management and information technology. With respect to combating money laundering, there were further improvements in the institutional framework with the merger of the Financial Crimes Unit and the Revenue Protection Department to form the Financial Investigations Division. This new Division of the Ministry of Finance and Planning is charged with the responsibility of dealing with all matters relating to economic and financial crimes, including fraud, breaches against revenue statutes and money laundering. Since the merger, the operations have been restructured with a view to ensuring that the required analysis and investigations are carried out in an effective and efficient manner. Financial Institutions Services Limited The Financial Institutions Services Limited continued with the winding up of residual activities of FINSAC during the FY 2003/04. The sale of FINSAC's 26.5% shareholding in Dyoll Group Limited and Jamaica Mutual Life Assurance Society's 55.17% shareholding in Jamaica Unit Trust Services will signal the completion of the divestment of shares in all intervened financial institutions. Efforts to divest the remaining commercial properties in the portfolio during FY 2003/04 were further enhanced. Most of the sales, which were initiated in FY 2002/03, were completed in FY 2003/04. Sales activity for the period totaled $2.09bn, bringing the total sales in this area to approximately $15.0bn. The Financial Institutions Services continues to monitor the debt collections in the non-performing loan portfolio sold to Jamaican Redevelopment Foundation Inc. The Forensic and Prosecutorial Unit of the Financial Institutions Services Limited continues to work closely with external attorneys on proceedings against persons deemed to be responsible for losses suffered by some of the failed financial institutions. FINSAC continued to implement the necessary procedures to wind-up the dormant companies that fall under its control. The construction of a records management centre, which will serve as an archive for all FINSAC's records is scheduled to commence before the end of March and should be completed by end-June 2004. The Way Forward During FY 2004/05 efforts will concentrate on:
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