BAHAMAS Law and Practice Contributed by: Dwayne Whylly, Kamala Richardson-Deal and Nastassia Rigby-Rodriguez, Glinton Sweeting O’Brien
2.12 Review of Industry Participants by Parties Other Than Regulators Auditors also review the activities of industry partici - pants. Digit asset businesses are required to file their annual audit financial statements with the Securities Commission. Electronic money service providers must be audited and shall make their audit reports readily available upon request from the Central Bank. 2.13 Conjunction of Unregulated and Regulated Products and Services It is not uncommon for regulated entities to offer unregulated products and services in conjunction with regulated products and services. Whether they do so through the same legal entity typically depends on the product and service. Typically, where regulated and unregulated services and products are offered through the same legal entity, it is prudent to obtain a letter of no objections from the regulator, permitting the regulated entity to offer the unregulated products and services. 2.14 Impact of AML and Sanctions Rules The FTRA and its accompanying regulations impose obligations on Financial Institutions (FIs) and Designat - ed Non-Financial Business and Professions (DNFBPs) to obtain key information on their customers for the purpose of complying with AML, CFT and CPF laws and regulations. Therefore, a fintech industry partici - pant that qualifies as an FI or DNFBP must comply with the information-gathering and internal control obligations imposed by the FTRA, as applicable. Furthermore, AML, CFT and CPF compliance is built into the legislation governing the fintech industry. Consequently, regardless of whether a regulated fin - tech industry participant qualifies as an FI or a DNFBP under the FTRA, it is required to comply with AML, CFT and CPF laws and regulations. Failure to comply with such rules may lead to sanc - tions, fines, loss of reputation and loss of licences. Therefore, captured industry participations must ensure that they maintain adequate risk rating and risk mitigation policies and procedures. Furthermore, client due diligence is required to ensure that they are not assisting with criminal conduct. In recent years, the Royal Bahamas Police Force has implemented a
task force specifically geared towards investigating and prosecuting financial crimes including money laundering and terrorist financing. 2.15 Financial Action Task Force (FATF) Standards AML/CTF/CPF rules are applied in accordance with the FATF Recommendations. The Bahamas is deemed compliant or largely compliant with all 40 Recommen - dations and was the first jurisdiction to be fully compli - ant with FATF Recommendation 15 by applying AML/ CTF/CPF rules to virtual assets and virtual assets ser - vices providers. 2.16 Reverse Solicitation The DARE Act 2024 does not allow for the reverse solicitation of services related to digital assets from another jurisdiction by the general public. The provi - sion of services related to digital assets to persons resident in The Bahamas from anywhere in the world constitutes carrying on a digital assets business in The Bahamas, for which a licence is required under the DARE Act 2024. This restriction/licence requirement is lifted where the recipient of digital asset services is an accredited investor. There are no express provisions in applicable legisla - tion related to the reverse solicitation of other fintech products. 3. Robo-Advisers 3.1 Requirement for Different Business Models Bahamian laws and regulations do not expressly regu - late robo-advisers. However, where a person seeks to offer these services, it is prudent to obtain a letter of no objections from the applicable regulator. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers It is currently difficult to analyse the steps which are being taken by legacy players with respect to robo- advisers due to the lack of information in the Baha - mian market.
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