BAHAMAS Law and Practice Contributed by: Dwayne Whylly, Kamala Richardson-Deal and Nastassia Rigby-Rodriguez, Glinton Sweeting O’Brien
registrants are required to disclose conflicts of inter - ests to their clients where they cannot be avoided. Notably, registrants are also required to ensure that key duties and functions are appropriately segre - gated, particularly those duties and functions which, when performed by the same individual, may result in potential conflicts of interest which may expose the registrant or its clients to inappropriate risks. Insider Dealing By virtue of Section 69 of the DARE Act 2024, any per - son who engages in, or attempts to engage in insider dealing or recommends or induces another person to engage in insider dealing commits an offence and is liable: (i) on summary conviction (ie, conviction with - out trial) to a fine of up to BSD250,000, a term of five years imprisonment or both; or (ii) on conviction upon information to a fine of up to BSD500,000, a term of Section 70 of the DARE Act 2024 makes it an offence to disclose: (i) information of a precise nature, which has not been made public, relating, directly or indirect - ly, to an issuer or person seeking admission to trading, or to a digital asset, and which, if it were made public, would likely have a significant effect on the price of the digital asset or a related digital asset; or (ii) in respect of a person responsible for the execution of orders for digital assets on behalf of clients, information of a precise nature conveyed by a client and relating to the client’s pending orders in digital assets, relating, directly or indirectly, to an issuer or person seeking admission to trading or to a digital asset, and which, if it were made public, would likely have a significant effect on the price of the digital assets or a related digital asset. The penalties for such disclosure include disgorgement of gains or losses avoided. Prohibition on Market Manipulation ten years imprisonment or both. Disclosure of Insider Information Section 71 of the DARE Act 2024 prohibits any per - son from engaging in or attempting to engage in mar - ket manipulation in relation to digital assets. Market manipulation includes transactions, orders, or behav - iours that give false or misleading signals about the supply, demand, or price of a digital asset or that artifi - cially set its price at an abnormal level. It also includes using deceptive devices, spreading false or mislead -
ing information (including rumours through media or the internet), or engaging in activities intended to dis - tort the market. Additionally, actions such as dominat - ing the supply or demand of a digital asset, disrupting trading platforms, or publicly promoting an asset while secretly holding positions to profit from price move - ments may also constitute market manipulation. Protection for Whistle-Blowers Section 73 of the DARE Act 2024 protects whistle- blowers from legal, administrative, or employment- related sanctions when they disclose information about wrongdoing. This protection applies even if the disclosure breaches a legal or employment related obligation, provided the person acted in good faith and reasonably believed the information was substan- tially true. “Wrongdoing” includes offences under the Act, criminal offences, failure to fulfil legal obligations, consumer protection issues, and breaches of privacy or personal data. The provisions of Section 73 aim to ensure that individuals are not penalised for exposing such wrongdoing. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations The DARE Act 2024 specifically prohibits the issu - ance of algorithmic stablecoins. There are no other regulations expressly related to High-Frequency and Algorithmic Trading (HFAT). The Bahamas has not implemented regulations requir - ing persons conducting HFAT to be licensed or regis - tered as market makers. 7.3 Regulatory Distinction Between Funds and Dealers Due to the absence of express regulation, a distinction between the two business models (funds and dealers) will be difficult to determine. 7.2 Requirement To Be Licensed or Registered as a Market Maker When Functioning in a Principal Capacity
70 CHAMBERS.COM
Powered by FlippingBook