BARBADOS Trends and Developments Contributed by: Debbie Fraser, Joanna M Austin and Makela Harrison-Yarde, Fraser Law
mission (FTC). The FTC’s permission is generally required for M&A where the purchaser, alone or together with any other enterprise with which it intends to effect the merger, is likely to control not less than 40% of any market or such other amount of the market as may be prescribed. The FTC has published merger controls that guide parties on the requirements for applications. In the authors’ experience, the FTC is willing to engage with parties, particularly when they are informed at an early stage of the impending M&A. This early engagement facilitates faster approval from the FTC where, currently, a deci - sion is usually issued within three months of an application. The FTC publishes its rulings, and it also analyses applications involving parties with significant market dominance. Thorough market analysis is also undertaken by the FTC while examining the application. The 2020 acquisition of the largest insurance provider in the Carib - bean region, Sagicor Financial Investment Cor - poration (a company initially incorporated in Bar - bados but now a Bermuda company registered as an external company in Barbados), and of the holding company for the Barbados insurance company Sagicor Life Inc, by Canadian public company Alignvest was one such example. The Sagicor acquisition was approved, and the basis for that ruling was published by the FTC. Currently, even where parties determine that the FTC’s permission is not strictly required, it is not unusual for the entities to inform the FTC of a proposed M&A where those entities have a notable market presence. Where the FTC’s per - mission is required, parties generally approach the FTC with a joint application, which is thought to be more efficient and transparent. Commer - cial banks regulated by the Central Bank of Barbados and insurance companies, securi - ties companies and other non-banking financial
institutions regulated by the Financial Services Commission (FSC) also have to obtain the prior permission of the relevant regulator before com - mencing with the M&A transaction. Permission is usually sought due to the requirement to inform the regulator of a change of beneficial ownership and to ensure that Barbados main - tains the standard for compliance disclosures set by the Financial Action Task Force (FATF) and the Organisation of Economic Co-operation and Development (OECD). Entities operating within the international business sector will also have to notify the International Business Unit as part of the requirements under the foreign currency permit issued to Barbados companies earn - ing 100% of their income in foreign currency. A foreign currency permit entitles holders to an exemption from foreign exchange controls and certain duties and taxes. In recent times, OECD and FATF compliance standards and requirements have impacted business activity and the timing of the close of transactions. The need to meet compliance requirements adds a new element to deals, along with the pre-existing regulatory approvals, and can potentially slow what would otherwise be early completion of transactions. A recent devel - opment is the requirement to file beneficial own - ership changes with the Registrar of Companies on completion of a transfer of beneficial own - ership. At present, compliance has not proved a significant deterrent to parties wishing to do M&A transactions and, over time, has evolved as a necessary – though onerous – part of doing business. Regulators are also becoming more engaged and receptive to discussions with par - ties, with the aim of facilitating business while ensuring that a robust regulatory framework is maintained to solidify Barbados’ reputation as an efficient and compliant jurisdiction in which to do business.
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