On June 7, The BVI Beacon turned 40. To celebrate, it is re-publishing some of the biggest stories from its archives over the past four decades. The article below originally ran December 13, 2001.

While there was bipartisan support for naming Financial Services Director Robert Mathavious to head the new, independent, Financial Services Commission, there was less support for the idea of a completely independent new body when the Legislative Council met Friday.

“Why can’t the chairman and deputy chairman be under the scrutiny of the Legislative Council,” opposition member Ronnie Skelton (R-at large) asked.

The question came as legislators were debating at great length the creation of a new body to regulate offshore banking and investments.

KPMG suggestion

The new commission was one of the recommendations of last year’s KPMG report on the UK Caribbean Over- seas Territories.

That report, released Oct. 25, 2000, was the result of a study commissioned by the UK and the Overseas Territories and Bermuda into the financial practices of the territories and to ensure their compliance with international standards.

The report recommended the Financial Services Department be given the Executive Council’s powers over financial matters to avoid a conflict between the department and the government.

Every member of the legislature stood at one time or another during discussion of the bill to commend Mr. Mathavious and recommend a pay raise with the creation of the new commission.

No decisions were made about Mr. Mathavious’ salary. Transitional and other decisions will be made later once the bill becomes law, Chief Minister Ralph O’Neal said during the debate.

Full disclosure

As he introduced the bill for its second and third readings, Mr. O’Neal said, “I would be lacking in candor if I didn’t comment on who will be our regulator. I’ve known Mr. Mathavious for years. In 1947 I lived with his grandmother and I played cricket with his father. I have every confidence he will steer the Financial Services Commission in the right direction.”

The new commission will collect monies for fees and licences, and the bill authorizes it to keep between seven-and-a-half and 15 percent of the money it collects.

The proposed bill also sets rules for how money may be borrowed. The commission may borrow up to $1 million. The only restriction is that it obtains permission from EXCO and sends a written note to LEGCO. To borrow more than $1 million LEGCO must first approve it.

In committee several legislators suggested the commission should be able to borrow even more money without first going to LEGCO but the bill was not amended.

Finding an attorney

Opposition member Dr. Kedrick Pickering (R-D7) wondered about the section of the bill that creates an appeals board for people who feel a commission decision is wrong.

That appeals board must be staffed by a lawyer with at least 10 years’ experience and no ties to the financial services industry.

“Where in the BVI are you going to find a lawyer who isn’t involved with the industry?” Dr. Pickering asked.

Attorney General Cherno Jallow didn’t answer, but said that much experience is required to make sure the appeals board is legitimate.

“It is a vital part of the legislation to ensure the authority of the appeals board,” Mr. Jallow said. “Unless you get someone with that kind of experience it ends up begging the appeal.”

Though passed by LEGCO, the bill does not become law until it is signed by the governor and published in The Gazette.

The new Financial Services Commission cannot be established until the law has been signed.

Governor Frank Savage could not be reached for comment on when he expects to sign the bill. Several members of the financial services industry declined to comment on the record about the commission.