FINANCLAL INSTITUTIONS

THE FINANCIAL INSTITUTIONS ACT

ARRANGEMENT OF SECTIONS

PART I . Prelirninar?,

Short title.
Interpretation.

PART 11. Licensing

Restriction on carrying on the business of accepting deposits.
Licences.
Alteration of memorandum and articles of association.

PART III. Capital and Reserves

Minimum capital requirements.
Restriction on foreign government holdings in licensees.
Reserve h d .

PART 1V. Restrictions on Deposit Taking Business

Maximum deposit liabilities.
Limit on fixed assets of licensees.
Persons debarred from management of licensees.
Restriction on period of deposits.
Prohibited business.

PART V . Cash Reserves and Liquid Assets

Cash reserve.
Liquid assets.

PART VI. Retacms and Accounts

Returns
Loss reserves on credit facilities.

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FINANCUL INSTITUTIONS

Presentation and publication of balance sheet and profit and loss
account.
Consolidated accounts of licensees and affiliated companies.

Duty of auciltors to report to Supervisor on transactions, etc., affecting
licensee's financial viability.
Expanded audit.

PART VII. Regulation and Control of Licensees

Regulation of shareholding in licensees.
Regulation of controlling interest in licensees.
Power to obtain information re shareholding.
Power to restrict dealing in specified shares.
Appeal against restriction notice.

PART VIII. Regulation against Unsafe Practices

Actual or apprehended insolvency.
Licensee ceasing to be viable.
Vesting of licensee's shares, etc., in Minister.
Effect of vesting order.
Restructuring transactions.
Winding up of Scheme of Arrangement.
Notice re compensation
Application of sections 2 5 ~ to 2 5 ~ .
~ e t e d o n of compensation
Application to court
Revesting of shares and subordinated debt.

Winding up of foreign licensee.
Obligation of manager to supply information.
Resignation, etc., of auditor.

PART IX Supervision and Examination of Licensees

Functions of Supervisory Department under this Act
Special audit or examination of licensee.
Supervisory Depamnent to have access to books, etc., of holding
company-

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FINANCIAL INSTZTUTIONS

Supenisor may require mfonnation.
Restructuring of ounerslup of licensee.
Ounershrp of subsidiaries by licensee.
Supervisor may issue directions re risk.
Management or investment of client's funds.
Powers of inspection
Protection of auditor.

PART X. Iiinding up of Licensees

Restriction on voluntaq- winding up.

PART XI. s4nralgamation crnd Transfers

Amalgamation and transfer.
Statements relating to amalgamation or transfer to be deposited with

Minister.

PART XI. General

Vesting of assets on sale of licensee.
Transfer of trust business.
Effect of transfer and vesting order.

Regulations.
Restrictions on loans on the ~ecurih of land.
Unclaimed moneys.
Fraudulent inducement to invest.
Offences and penalties.
Penalties.
Publication of orders.
Secrecy of licensee officials.
Transitional.

SCHEDULES.

FINANCIAL INSTITUTIONS 5

THE FINANCIAL INSTITUTIONS ACT ~ c t s
16 of 1992,
27 of 1997,

[31st December, 1992.1 :: ;: i::':
PART I. Preliminary

I.--(]) This Act may be cited as the Financial Institutions Shorttitle
Act.

(2) This Act shall not apply t o -
the Bank of Jamaica
any commercial bank;
the Jamaica Mortgage Bank;
any statutory body;
any society registered under the Building Societies
Act, the Co-operative Societies Act, the Friendly
Societies Act Qr the Agricultural Credit Board Act or
any co-operative arrangement for savings among
individuals; or
any insurance company registered under the Insurance
Act.

2 . 4 1 ) In this Act-
"advertisement" includes every form of advertising,

whether in a publication or by the display of notices or
by means of circulars or other documents or by an
exhibition of photographs or cinematograph films, or
by way of sound broadcasting, television or telephone
communication, and every other form of communi-
cation but does not include a prospectus (as defined in
the Companies Act) issued by a company and
references to the issue of an advertisement shall be
construed accordingly; and for the purposes of this Act
an advertisement issued by any person by way of
display or exhibition in a public place shall be treated
as issued by him on every day on which he causes or
permits it to be so displayed or exhibited;

Interpreta-
tion.

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FINANCIAL INSTITUTIONS

3812004
S. 2 (a).

"advertisement for deposits" means, in relation to any
person, an advertisement inviting the public or any
part thereof to deposit money with that person;

"authorized officer" has the same meaning as in the
Bank of Jamaica Act; n

L/
"bank" means a commercial bank as defined in the

Bank of Jamaica Act;

"capital base" in relation to a licensee means-

(a) the amount of shareholder's equity and
eligible reserves of the licensee, calculated
in such manner and by such methods as
may be prescribed from time to time by
regulations made under section 38; and

(b) the amount of subordinated debentures
which for the time being may be taken
into account in the calculation of the
licensee's capital base pursuant to section
45 (6);

"company" means a body corporate whether incor-
porated under the law of Jamaica or of any other
country;

"competent authorityy' means a supervisory authority in a
foreign country which has supervisory duties and
responsibilities-

(a) with respect to a company which is incor-
porated in and provides financial services in
that country; and

0

(b) which are similar to the duties and
responsibilities of the Bank of Jamaica and the
Financial Services Commission.

"connected person" shall be construed in accordance with
subsection (2);

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FINANCIAL INSTITUTIONS

"control" in relation to a licensee or any other com-
pany means the power of a person to secure by
means of the holding or the possession of voting
power in or in relation to that licensee or other
company or by any agreement or by virtue of any
other powers conferred by the articles of associa-
tion or other document regulating the licensee or
other company, that the affairs of the licensee or other
company are conducted in accordance with the wishes
of that person;

"credit facilities" includes loans, advances, comfort letters,
standby and commercial letters of credit and any other
arrangements whereby a customer of a licensee has
access to finds or financial guarantees of the licensee
or the licensee undertakes on behalf of a customer,
financial liability to another person;

"deposit" means a sum of money paid on terms-

(a) under which the sum will be repaid, with or
without interest or a premium, and either on
demand or at a time or in circumstances agreed
by or on behalf of the person making the
payment and the person receiving it; and

(b) which are not referable to the provision of
property or services or to the giving of security,
and for the purposes of this paragraph, money is
paid on terms which are referable to the
provision of property or services or to the
giving of security if, and only if-

(i) it is paid by way of advance or part
payment for the sale, hire or other
provision of property or services of
any kind and is repayable only in the
event that the property or services is
or are not in fact sold, hired or
otherwise provided; or

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FINANCIAL INSTITUTIONS

(ii) it is paid by way of security for
payment for the provision of
property or services of any kind
provided or to be provided by the
person by whom or on whose behalf
the money is accepted; or 0

(iii) it is paid by way of security for the
delivery up or return of any property,
whether in a particular state of repair
or otherwise;

"deposit liabilities" means the deposit liabilities of the
licensee whether payment in Jamaica or elsewhere;

"depositor" means a person entitled, or prospectively
entitled, to repayment of a deposit, whether made by
him or not;

"eligible reserves" means the reserve hnd, the retained
earnings reserve and any other hnd established by the
licensee and approved by the Bank of Jamaica as being
part of the licensee's capital base;

"functions" includes powers and duties;

"immediate relative" as respects any person, means his
spouse, or his children (including step-children) and
their spouses, his parents, his brother or sister;

"land" includes any interest in land;

"licence" means a likence granted under this Act;

"licensee7' means a company duly licensed under this Act;
0

"manager" includes any person or persons by whatever
name called for the time being in charge of the
principal office or any branch of a licensee;

"money at call or at short notice" in relation to a
licensee, means money invested by such licensee

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FINANCIAL INSTITUTIONS

(otherwise than with a connected person) by way of
loans to or deposits with-

(a) the Bank of Jamaica, other than the cash reserves
or cash balances referred to in paragraphs (a) and
(b) of subsection (2) of section 15;

(b) any other licensee or any bank;

(c) any other institution in Jamaica approved for the
purpose by the Minister,

repayable on demand or on not more than fourteen
days' notice;

"paid-up capital" shall be construed in accordance with
subsection (4);

"prescribed liabilities" means such liabilities as may, by
notice, from time to time be specified by the Bank of
Jamaica;

"regulated or supervised financial institution" means- 3812004
S. 2 (b).

(a) an institution in Jamaica which is supervised or
regulated by the Bank of Jamaica or the Financial
Services Commission;

(b) a financial institution which is established in a
country outside Jamaica in accordance with the
relevant laws of that country and is regulated in
that country by a competent authority;

"retained earnings reserve" means a reserve which has been
notified as such to the Bank of Jamaica and into which
is paid such portion of a licensee's net profits as
defined in section 8 (including realized capital gains)
as the licensee may determine;

"Supervisor" means the Supervisor of Banks and Financial 2711997
Institutions appointed under the Bank of Jamaica Act; S. (a)(iii).

"Supervisory Department" means the Department of 2711997
Supervision of Banks and Financial Institutions S. 2(a)(iii).
established under Part VA of the Bank of Jamaica Act;

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FINANCIAL INSTITUTIONS

"trust business" includes property devolving upon a licensee
whether in the capacity of trustee, executor,
administrator or any other fiduciary capacity;

"unsecured" in relation to credit facilities means-

(a) credit facilities granted without security; or 0
(b) in the case of credit facilities granted against

security, any part thereof which at any given time
exceeds the market value of the assets comprising
the security or which exceeds the valuation
approved by the Bank of Jamaica whenever it
deems that no market value exists for such assets,

and for the purpose of this definition security shall be
construed as including a confirmed irrevocable letter of
credit and such other instrument as the Bank of Jamaica
may from time to time determine.

(2) For the purposes of this Act, the following per-
sons shall be treated as being connected with a given licensee
("L") and the licensee with them, and shall be so treated
notwithstanding that at the relevant time any of the persons in
question (not being individuals) had not yet come into existence
or had ceased to exist-

(a) a holding company or subsidiary of L;
(b) a subsidiary of a holding company of L;

(c) a holding company of a subsidiary of L;
(6) any company of which L has control;
(e) any company of which L and the persons con-

nected with L together have control; 0
V) any company which together with L constitute a

group;
(g) an individual who is a director, manager Qr a person

who has control of L or any partner or any
immediate relative of such director, manager or
person as aforesaid;

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FINANCIAL INSTITUTIONS

(h ) ar,y company of which any of the persons referred
to in paragraph (g) is a director, manager or has
control.

(3) For the purposes of this Act-

"group" in relation to a company, means that company
and-

(a) any other company which is its holding company or
subsidiary;

(b) any other company which is a subsidiary of the
holding company;

(c) any company which directly or indirectly controls or is
controlled by any company referred to in paragraph
(a> or (b);

(d) any company which is controlled by a person who
directly or indirectly controls a company referred to in
paragraph (a), (b) or (c).

(3A) For the purposes of this Act a company is the 2711997
holding company of any company that is its immediate, S. 2 (b).

intermediate or ultimate subsidiary whether the holding 1012002
company holds that other company's shares on trust or is the S.2(b).
beneficial owner of such shares.

(4) In determining the paid-up capital of a licensee-

(a) unless the Bank of Jamaica otherwise determines and,
subject to paragraph (b), there shall be disregarded any
portion of capital subscribed to and paid up by a
connected person who had within the three years
immediately preceding the payment, received from
that licensee of a loan (other than a loan referred to in
subsection (5)) deposit or advance of an amount equal
to or greater than the amount of that portion of capital;

(b) the amount disregarded pursuant to paragraph (b)
consequent on any loan, deposit or advance shall be
limited to the amount remaining unpaid on the loan,
deposit or advance.

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FINANCIAL INSTITUTIONS

(5) Subsection (4) shall not apply to any secured
loan used to purchase shares in a licensee where those shares
are not used as security for that loan.

(6) Nothing in this Act shall be construed as per-
mitting a licensee to reduce the amount held in the retained
earnings reserve without the prior approval in writing of the (3
Bank of Jamaica.

PART 11. Licensing

3.-(1) A person other than a company duly licensed under
carrying on
the business of this Act shall not in Jamaica-
accepting
deposits. (a) car1.y on the business of accepting deposits; or

(b) issue or cause to be issued advertisements for deposits,

and any person who contravenes this subsection shall be guilty
of an offence.

(2) Where a Justice of the Peace is satisfied by
information given by an authorized officer that there are
reasonable grounds for suspecting that an offence under
subsection (1) has been or is being committed by any person and
that evidence of the commission of the offence is to be found on
any premises specified in the information, he may grant a search
warrant to the authorized oficer in accordance with subsection
(3).

(3) The warrant referred to in subsection (2) shall permit
the authorized officer- 0

(a) to enter (with or without a constable) the premises
named in the warrant for the purpose of inspecting and
making copies of such books, accounts, records and
other documents, cheques and securities (in this
subsection referred to as relevant documents) and such
cash as may be found on those premises;

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FINANCIAL INSTlTUTIONS

(b ) to seize and detain the relevant documents for a
period not exceeding thirty days.

(4) Any person who hinders or obstructs an
authorized officer or any person acting in aid of such officer
in the performance of his duties under subsection (3) is
guilty of an offence.

4 . 4 1 ) An application for a licence under this Act shall "cenCm.
be made to the Minister in such form and manner and shall
contain such particulars as may be prescribed, and the
Minister may. in his discretion. grant or refuse such applica-
tion.

(2) Where the Minister thinks necessary he may
require an applicant for a licence to furnish additional in-
formation and where the application is refused the Min-
ister shall notify the applicant in writing of such refusal
and shall afford to that applicant an opportunity to be heard.

(3) A licence shall not be granted to any company
unless the Bank of Jamaica makes a recommendation to the
Minister stating thal every person who is a director of the
company or who is to perform corporate management func-
tions in the company or who is a shareholder holding
(whether in his own right or when counted with the holding
of a connected person) 20% or more of the voting shares of
the company, is a fit and proper person for that purpose,
that is to say, he is a person-

(a) who has not been convicted of an offence involving
dishonesty;

(b) who is not an undischarged bankrupt;

(c) whose employment record does not give the Bank
of Jamaica reasonable cause to believe that the
person carried out any act involving dishonesty or

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FINANCIAL INSTITUTIONS

any act involving impropriety in the handling of
banking business;

271 1997
s. 3 13). (d) who, in the opinion of the Bank of Jamaica, is a

person of sound probity, is able to exercise mm-
petence, diligence and sound judgment in fulfilling
his responsibilities in relation to the licensee and
whose relationship with the licensee will not
threaten the interests of depositors; and for the
purposes of this paragraph, the Bank shall have
regard to any evidence that he has-

(i) engaged in any business practices appearing
to the Bank to be deceitful or oppressive or
otherwise improper which reflect discredit to
his method of conducting business;

(ii) contravened any provision of any enactment
designed for the protection of the public
against financial loss due to dishonestv, - - .
incompetence or malpractice by persons
concerned in the provisions of banking,
insurance, investmint or other financial
services, or in the management of com-
panies or due to bankruptcy.

(4) It shall be a condition of every such licence that
the company to which i t is granted shall-

(a) forthwith upon the grant of the licence and there-
after while the licence continues in force, annually
on or before each anniversary of such grant, pay
the prescribed licence fee to the Accountant-
General;

(b) complv with such terms and conditions as may be
specified in the licence;

[The inclusion of this page is authorized by L.N. 146/19991

(c) forthwith upon any change in the persons referred
to in subsection (3), notify the Minister in writing
of that change.

(5) If, upon receipt of a notice referred to in para-
graph (c) of subsection (4), the Minister is not satisfied
that the persons named therein are fit and proper persons
as described in subsection (3): the Minister may require the
licensee concerned to take such steps as the Minister may
consider necessary to ensure compliance with subsection (3).

(6) The Minister shall by notice in the Gazette, pub-
lish-

(a) the name of each company to which a licence is
granted under this section; and

Ib) any terms and conditions applicable to such licence.

5.-(1) A licensee shall not make any alteration in its ~ltmtion
of memo-

memorandum or articles of association unless it has notified randurnand
the Minister in writing that it proposes to make that altera- az2i&
tion and the Minister either-

(a) has in writing approved the proposed alteration;
or

(b) has not, within thirty days of receipt of the notifi-
cation, indicated in writing to the licensee any
disapproval of the proposed alteration.

(2) The Minister shall not disapprove of a proposed
alteration in the memorandum or articles of a licensee

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16 FlNANCIAL INSTITUTIONS

unless such proposed alteration is. or is likely to result in, a
breach of-

(a) the terms and conditions of the licensee's licence;
or

(b) the provisions of this Act or any regulations made
hereunder.

(3) Any alteration made to the memorandum or
articles of association of a licensee in contravention of sub-
section (1) shall be null and void.

(4) Every licensee shall within fourteen days of the
date on which any alteration is made to its memorandum
or articles of association, notify the Minister of such altera-
tion.

PART 111. Capital and Reserves
Minimum 6 . 4 1 ) A licence shall not be granted to a company
capital
aquim unless capital to an amount not less than twenty-five million
m a . dollars has been subscribed.

(2) A licensee shall not commence business unless
not less than twenty million dollars of the subscribed capital
has been paid up in cash.

(3) The Minister may; by order subject to affirmative
resolution. vary the minimum amounts prescribed in sub-
section (1) so, however, that where the amounts are in-
creased by that order, the company shall be allowed a
reasonable period of time specified in the order, being not
less than twelve months, within which to comply.

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FINANCIAL INSTIT(IT1ONS 16.01

7. Except with the written approval of the Minister, a :se
foreign government or agency of such government shall *sn
not, directly or indirectly, in relation to a licensee-- w-t holding3 le

l i m o u .

(a) hold more than 5% of the issued share capital of
that licensee;

(b) exercise any voting power in excess of that percent-
age of such shares as aforesaid.

8.-(1) Every licensee shall maintain a reserve fund to fd-
which at the end of each financial year of the licensee there
shall be transferm-

(4 15% of the net profits of the licensee in that year
until the amount at the credit of the reserve fund
is equal to 50% of the paid-up capital of the
licensee; and

(b) thereafter 10% of the net profits of the licensee in
that year until the amount at the credit of the
reserve fund is equal to the paid-up capital of the
licensee.

(2) Nothing in subsection (1) shall prevent a
licensee-

(a) from transferring more than the prescribed per-
centage of the net profits in any year to its reserve
fund; or

(b) from maintaining a reserve fund in an amount in
excess of its paid-up capital.

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F I N A N C I A L INSTII'UZ'ZONS

(3) For the purposes of this section, "net profits"
means profits after deduction of income tax but does not
include any surplus arising from-

(a) a revaluation of the licensee's assets other than
foreign currency; or

(6) unless the Bank of Jamaica in writing otherwise
permits-

(i) a sale of the licensee's assets to a connected
person, where such sale is not for cash or
is funded by a loan from the licensee;

(ii) any resale, other than for cash, by the licen-
see of assets purchased from a connected
person.

(a) the amount of the credit of the reserve fund of a
licensee exceeds its unimpaired capital; and

(b ) the licensee intends to reduce its reserve fund,

the licensee shall in writing notify the Bank of Jamaica
accordingly and apply in writing to the Bank of Jamaica for
permission to reduce its reserve fund and thereupon the
Bank of Jamaica may permit the licensee to reduce its
reserve fund in accordance with subsection (5) by an amount
not exceeding the amount of the excess as aforesaid.

(5) The reduction referred to in subsection (4) may
be effected by the issue by the licensee of bonus shares or by
the redemption of preference shares or both.

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FINANCIAL INSTITUTIONS

PART IV. Restrictions on Deposit Taking Business
9.-(1) Subject to subsection ,(2), a licensee shall not incur MaxiTrn

deposit desposit liabilities and other indebtedness for borrowed li;l+,i~itien.
money which, together with all interest accrued thereon, gydlz;
exceed in the aggregate, twenty times the amount of its
capital base.

(2) The Minister may by order subject to affirmative
resolution, vary the multiple prescribed in subsection (1) in
such manner as he thinks fit, so, however, that, where by
virtue of such order the multiple for the time being
applicable under this subsection is decreased, any licensee
affected thereby shall be permitted a reasonable period of
time specified in the order, being not less than twelve
months, within which to comply.

( 2 ~ ) A licensee shall maintain at all times an adequate ~~~~~,
capital base determined in such manner and by such methods
as may be prescribed from time to time.

(3) Any licensee which contravenes subsection (1)
shall be guilty of an offence.

10.-(1) The fixed assets of a licensee shall not, without kxyzfP
the approval in writing of the Minister, and subject to such of liwnsks.
conditions as the Minister may specify, exceed an amount
equivalent to its capital base.

(2) For the purposes of this section-

(a) "fixed assets" means the following assets (whether
freehold or leasehold) owned by a licensee and
used by the licensee in the conduct of its business,
that is to say-

-
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k-INANCIAL INSTITUTIONS

(i) furniture or fixtures;
(ii) premises and other real estate;

(iii) machinery and equipment, including motor
vehicles, but does not include any such
machinery, equipment or vehicles from
which the licensee derives income in its
capacity as lessor;

( b ) the historical cost method shall be applied in the
valuation of fixed assets.

Persons
debarred

11.-(1) A person to whom this subsection applies shall
f rm , not, without the express authorization in writing of the
agemen' licensees. Of Minister, act or continue to act as a director of, or be

directly or indirectly concerned in the management of any
licensee.

(2) Subsection (1) applies to any person w h v
(a) is not a fit and proper person as described in sub-

section (3) of section 4;
( b ) whether in Jamaica or elsewhere has been a direc-

tor of or directly concerned in the management

First of a bank, licensee or other financial institution
Schedule. referred to in the First Schedule.

(3) Any person who contravenes the provisions of
subsection (1) shall be guilty of an offence.

(4) It shall be the duty of every licensee to ensure
that, in relation to the licensee, persons do not act or con-
tinue to act in contravention of subsection (1); and, subject
to subsection (5), any licensee which contravenes this sub-
section shall be guilty of an offence.

15) It shall be a defence to a licensee charged pursu-
ant to subsection (4) for the licensee to prove that it took
all reasonable steps in the circumstances to prevent a con-
travention of subsection ( I ) .

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FINANCZAL INSTITUTIONS 19

1 2 4 1 ) A licensee shall not- Restriction
on ~er iod of
deposits.

(a) accept a deposit upon terms that it is repayable on
demand or in less than fourteen days by cheque,
draR or order drawn on the licensee, or in any
other manner and shall so inform the depositor at
the time when the deposit is made;

(b) without the written permission of the Bank of
Jamaica, repay any deposit within less than four-
teen days from the date on which the deposit was
received by the licensee:

Provided that this subsection shall not apply to-

(a) deposits taken from banks or other licensees; or

(b) deposits taken prior to the 3 1 st December, 1992.

(2) A licensee which contravenes subsection (1) shall
be guilty of an offence.

13.-(1) A licensee shall not-

(a) engage in any trade save in so far as may be neces-
sary in the ordinary course of its operations and
services, including the satisfaction of debts due to
it, and the due performance of its functions as a
trustee, executor or administrator or as attorney
for any person;

(b) acquire land save in so far as may be necessary-

(i) so to do for the purpose of conducting its
business or housing its oflicers or employees;

I or

(ii) in the ordinary course of its operations and
services including the satisfaction of debts due
to it and the due performance of its functions
as a trustee, executor or administrator or as
attorney for any person;

Prohibited
business.

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FINANCIAL INSTITUTIONS

2711997
S. 5 (b).

(c) acquire, deal in or grant credit facilities on the
security of its own shares or the shares of a hold-
ing company or subsidiary of the licensee;

(d) grant unsecured cred.it facilities to-

(i) any connected person;
i

(ii) any of its officers or employees or any
immediate relative of such officer or em-
ployee in excess of an amount equivalent to
one year's salary of such officer or employee;

(e) except in relation to specified credit facilities, grant
unsecured credit facilities to-

(i) any firm or corporation which holds 20% or
more of the licensee's capital or in which the
licensee or a connected person has an interest
as a partner, or, as the case may be, a
shareholder holding or controlling 20% or
more of the voting shares;

(ii) any person who holds or controls 20% or
more of the licensee's shares;

(iii) any person if the credit facilities are guar-
anteed by a connected person who holds or
controls 20 % or more of the licensee's capital;
or

(iv) any firm or corporation if the credit facilities j
are guaranteed by a connected person who, in
relation to that firm or corporation, has an
interest as a partner, or, as the case may be,
holds or controls 20% or more of the voting
shares;

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FINANCIAL INSTITUTIONS

( f l except in relation to specified credit facilities and
subject to subsection (5) grant credit facilities-

(i) to any one person (not being another licen-
see) if the credit facilities granted exceed in
the aggregate 20% of the licensee's
capital base but where any portion of such
credit facilities is unsecured, that portion

2711997 shall not exceed 5 % of the licensee's s. rcWi,,
capital base;

lii) to any group if the credit facilities exceed
in the aggregate 4056 of the licensee's capital
base but where any portion of such credit
facilities is unsecured that portion shall not
exceed IOyA of the licensee's capital base; t'\lz$il,

(g) pay any dividend on its shares-
(i) until all its capitalized expenditure not re-

presented by tangible assets and all prior
losses have been completely written off, so,
however, that the Minister may by order
provide that, subject to such terms: condi-
tions, exceptions and restrictions (if any) as
he may specify therein. such expenditure
shall be deemed not to include expenditure
for the purchase of goodwill;

(ii) if the paid-up capital or cumu!lative balance
in the reserve fund has been impaired, until
such impairment has been corrected;

(iii) if, having regard to the licensee's liabilities,
it would be imprudent to do so;

(iv) until the requirements of this Act relating
to reserves have been met;

(v) until all sums due and payable to the Bank
of Jamaica by the licensee have been paid;

[The inclusion of this page is authorized by L.N. 146:1599]

FlNA NCIA L INSTITUTIONS

(h) directly or indirectly acquire or hold in the aggre-
gate any part of the share capital of any com-
pany or undertaking in excess of 50 % of its capital
base, so, however, that-

ti) such shareholding shall not, in respect of
any one such company or undertaking as
aforesaid, exceed 1 of the licensee's
capital base; and

(ii) the restrictions imposed by the paragraph
shall not apply where such shareholding is
acquired in the administration of the estate
of a deceased person or pursuant to an
underwriting arrangement or in the course
of the satisfaction of debts due to the licen-
see but such shareholding shall be disposed
of at the earliest suitable time;

i except where the Bank of Jamaica otherwise deter-
mines, grant credit facilities to and acquire or hold
investments-

(i) in any one connected person, exceeding in
the aggregate of the licensee's capital
base; or

(ii) in all connected persons, exceeding in the
aggregate 20yA of the licensee's capital base.

(2) The Minister may from time to time, by order,
subject to affirmative resolution of the House of Representa-
tives, vary any percentage specified in paragraph ( f ) of sub-
section ( I ) .

(3) A licensee shall not beneficially hold in fee simple
for any period exceeding three years from the date of acqui-
sition, land acquired in the course of the satisfaction of debts
due to i t , hut shall forthwith after the expiry of that period
sell or otherwise dispose of the land absolutely so that it no
longer has. directly or indirectly, any interest or control in
respect thereof except by way of security.

~-~ ~ -

[The inclusion of this page is authorized by L.N. 146/1W]

FINANCIAL INSTITUTIONS

(4) The Minister may in writing direct that the time
specified in subsection (3) for sale or disposal of land be
extended for a further period or periods.

(5) The Minister may, by order, make provision
whereby credit faciltiies may be granted by a licensee on
such basis (being less restrictive than that imposed by para-
graph (fl of subsection (I), as may be prescribed in the order
if he is satisfied. on application of the licensee and after
consultation with the Bank of Jamaica, that the licensee has
made arrangements whereby the repayment of amounts
made available as credit facilities will be assured by such
cash resources of the borrower or such other resources of
the borrower approved by the Bank of Jamaica or guaran-
teed by such persons in such circumstances and subject to
such terms and conditions as will adequately protect the
interests of shareholders and depositors in the licensee.

(6) For the purposes of this section "specified credit
facilities" means-

(a) credit facilities made to or guaranteed by the Gov-
ernment of Jamaica; or

(b) credit facilities made to a local government
authority; or

(c) credit facilities made t o -
(i) a statutory body; or

(ii) a company owned or controlled by the
Government or an agency of the Govern-
ment,

which is designated by the Minister for the purposes
of this provision;

(6) credit facilities derived solely from funds provided
by an institution, under a scheme approved by the
Minister. to a licensee for the purposes of the
granting of credit facilities by that licensee; or

[The inclusion of this page is a~~thorized by L.N. 146!1999]

FINANCIAL INSTITUTIONS

(e) credit facilities in respect of which cash is given
as full collateral.

(7) For the purposes of subsection ( I t
(a) any reference to "capitalized expenditure not repre-

sented by tangible assets" shall be construed as
including a reference to preliminary expenses,
organization expenses, share selling commission
and brokerage;

(b) "control" in relation to shares, means the power
of a person to secure that the voting rights in res-
pect of those shares are exercised in accordance
with that person's wishes.

18) Notwithstanding anything to the contrary,
where a transaction is entered into by a licensee, whether
before or after the 31st December, 1992, in contravention
of any provision of this section, nothing in this section
shall prevent the licensee from enforcing the transaction
against any person or party thereto.

(9) Any licensee which contravenes subsection (1)
or 13) shall be guilty of an offence.

PART V. Cash Reserves and Liquid Assets
Cash 14 .41) Subject to section 28 of the Bank of Jamaica
I C ~ T Y C . Act, every licensee shall maintain in the form of a deposit

with the Bank of Jamaica a cash reserve not less on the
average than 5% of its prescribed liabilities.

(2) Subject to subsection (3). for the purpose of
determining the amount of the cash reserve required to be
maintained by a licensee during any week-

(a) the amount of its deposit with the Bank of Jamaica
shall be the average amount of such deposits as
at the close of business on each business day in
the week;

[The inclusion of this page is authorized by L.N. 146119991

FINANCIAL INSTITUTIONS

(b) the amount of its prescribed liabilities shall be the
average amount of such liabilities at the close of
business on Wednesdays in each of the four con-
secutive weeks ending with the last Wednesday
but one of the preceding month.

(3) The Bank of Jamaica may, by notice, from time
to time vary the method to be used in calculating the average
of the cash reserve required to be maintained under this
section.

(4) Where a licensee during any week fails to main-
tain with the Bank of Jamaica the authorized deposit, that
licensee shall pay to the Bank of Jamaica in respect of the
business days of that week aforesaid interest calculated on
the amount of the deficiency at such rate as the Bank of
Jamaica may from time lo time, by notice, approve.

(5 ) In subsection (4)-
"authorized deposit" in relation to any licensee means

the amount required to be deposited by that
licensee with the Bank of Jamaica pursuant to
subsection (1) or pursuant to any notice published
in the Gazette in accordance with section 28 of the
Bank of Jamaica Act;

"deficiency" means the amount by which the sum (if
any) actually deposited by a licensee falls short of
the authorized deposit.

15 .41) Subject to section 29 of the Bank of Jamaica Act, muid
every licensee shall so conduct its business as to ensure that .aala.
its liquid assets are on the average not less than 15% of its
prescribed liabilities.

(2) For the purposes of this section "liquid assets"
means-

fa) cash reserves on deposit with the Bank of Jamaica
in accordance with section 14;

me kluaioa of this page is authorized by L.N. 96/1998]

FINANCIAL INSTITUTIONS

(b ) cash balances with the Bank of Jamaica in excess
of such required amount;

(c) notes and coins which are legal tender in Jamaica;
(d) money at call or short notice not being money

taken into account in determining the liquid assets
of the licensee or other institution with which it
is deposited;

(el Treasury Bills of the Government of Jamaica;
(fl local registered stocks the maturity date of which

will occur within a period not exceeding nine
months;

(g) amounts deposited with the Bank of Jamaica for
such period as the Bank of Jamaica may from
time to time determine;

*(h) such other assets as the Minister may determine
after consultation with the Governor of the Bank
of Jamaica;

(9 balances held with banks and other licensees less
amounts held for those banks or licensees:

Provided that so much only of the items mentioned at
paragraph (d) shall be taken into account as do not exceed
such percentage of prescribed liabilities as the Minister may
from time to time, by order, prescribe.

(3) Where a licensee during any month fails to main-
tain as liquid assets the amount which it is required to main-
tain under this section, that licensee shall pay to the Bank
of Jamaica in respect of the entire month aforesaid interest
calculated at such rate as the Bank of Jamaica may from
time to time, by notice, approve on the sum by which the
amount of the liquid assets (if any) maintained by that
licensee falls short of the amount of the liquid assets which
it is required to maintain.

''L.9. 3M/%

me inclusim of this page is a u t h d by L.N. 96119981

FINANCIAL INSTITUTIONS

(4) Subject to subsection ( 5 ) , for the purpose of
determining the amount of the liquid assets required to be
maintained by a licensee during any month-

(a) the amount of its liquid assets shall be the average
amount of such assets at the close of business on
each business day of the month; and

(b) the amount of its prescribed liabilities sha'll be the
average amount of such liabilities at the close of
business on Wednesdays in each of the four con-
secutive weeks ending with the last Wednesday
but one of the preceding month.

(5) The Bank of Jamaica may by notice from time
to time vary the method to be used in calculating the
average of the liquid assets required to be maintained under
this section.

PART VI. Returns and Accounts

16.-(1) Subject to subsection (2), every licensee shall in a,tum,
relation to its operations in Jamaica or elsewhere deliver to
the Bank of Jamaica in such form as the Minister may from
time to time approve-

(a) not later than seven working days after the last
day of each month a monthly statement of assets
and liabilities;

(b) not later than seven working days after the last
day of each month a monthly return providing an
analysis of customers' liabilities to the licensee in
respect of bills discounted, loans and advances;

(c) not later than sixty days after the end of each year,
an annual return made up as at the end of that
year, of-

(i) the licensee's current operating earnings
and expenses during the year;

me inclusion of this page is authorized by L.N. 42!19951

(ii) all debts payable by the licensee in Jamaica
or elsewhere in respect of which during a
period of seven or more years no transac-
tion has taken place and no statement of
account has been requested or acknow-
ledged by the creditor;

(iii) drafts or bills of exchange drawn, certified
or accepted by the licensee and payable in
Jamaica or elsewhere, and outstanding for
seven or more years from the date of such
drawing, certification or acceptance, as the
case may be;

iiv) all dividends remaining unpaid for a period
exceeding five years;

(v) land acquired in the course of the satisfac-
tion of debts due to the licensee and bene-
ficially held in fee simple by the licensee;

(d ) not later than seven working days after the month
to which it relates a monthly return showing parti-
culars of loans in respect of which no interest which
is due and payable has been paid for a period of
three months or more;

(e) not later than seven working days after the month
to which it relates a monthly return showing parti-
culars of the licensee's contingent and prospective
liabilities;

if) such other returns, statements or information as
the Minister may require.

(2) No statement or return shall be required under
paragraph (a), (b), (dl, (e) or ( f ) or sub-paragraph (i) of
paragraph (c) of subsection (1) in respect of the affairs of any
particular customer of a licensee.
-

[The ieclusion of this page is aurhorized by LN. 421 19951

FINANCL4L INSTlT UTIONS

(3) The Minister may, if he thinks necessary in any
particular case, extend the time prescribed for the sending of a
statement or return under subsection (1) .

(4) Every licensee which fails to make any return or
f in i sh any information in accordance with the requirements of
this Act or the Bank of Jamaica Act, shall be guilty of an
offence.

(5) If any return required to be made, or any
information required to be hrnished, under or pursuant to this
Act or the Bank of Jamaica Act, is transmitted by post, the date
appearing by the stamp or mark of the post of ice in Jamaica
upon the envelope or wrapper enclosing the return or
information received by the Minister or the Bank of Jamaica, as
the case may be, as the date of deposit in the post office shall be
taken prima facie for the purposes of this section to be the day
upon which the return was made or the information was
fbmished.

(6) The Bank of Jamaica may publish in a daily . .
newspaper printed and circulated in Jamaica information in such
form as may be approved by the Minister on the liabilities and
assets of each licensee furnished under paragraph (a) of
subsection (I ) :

Provided that no information in respect of the affairs of a
particular customer of a licensee shall be published.

(7) In this section "working day" means any day on
which a licensee is normally opened for business.

17.-41) Where, in respect of any credit facility granted by a
licensee, no payment of principal or interest which is due and faciiities.
payable has been made for a period of three months- ::rib),

2711 997
S. 6 (a).

(a) the licensee shall establish an appropriate reserve
(hereinafter referred to as loss reserves on credit 1012002
facilities) in respect of all such credit facilities in such
amount and on such basis as the Minister may ~ . 6 ( b ) .
prescribe in regulations made under section 38; and F:::

(The i~~clusloci of'this page IS aothonzed by L N . 88120031

FINANCIAL INSTITUTIONS

1012002
S 3 (b).

10/2002
S. 3 (b).

10/2002
s. 3 (b).

1012002
S. 3 (b).

1012002
S. 3 (b).

Presentation
and public-
cation of
balance sheet
and profit and
loss account

(b) interest in respect of such credit facilities shall not
continue to be taken to the profit and loss account after
the expiration of that period.

(2) There shall be shown on the audited balance sheet of
each licensee the aggregate amount of the loss reserves on credit
facilities and the portion thereof which has been written off
against the profit and loss account.

(3) Where the terms of any loan referred to in subsection
(1) have been altered pursuant to a renegotiation-

(a) if the credit facility is of an amount equivalent to 10%
or more of the licensee's capital base, the licensee
shall within several days after the date of such
negotiation notify the Bank of Jamaica in writing
giving full particulars thereof

(b) if the credit facility is not one referred to in paragraph
(a) but is of an amount in excess of 1% of the
licensee's capital base, the licensee shall within seven
days after the expiration of the month in which the
alteration occurred, make a return to the Bank of
Jamaica setting out the total amount of the credit
facilities so altered during that month.

18.---(1) Every licensee shall-
(a) not later than ninety days after the end of each

financial year, submit the prescribed documents to the
Bank of Jamaica;

(b) not later than fourteen days after the date on which the
prescribed documents are submitted pursuant to
paragraph (a), cause a copy thereof to be published in
a daily newspaper printed and circulated in Jamaica;

(c) exhibit throughout each year a copy of the latest
prescribed document in a conspicuous position in each
place of business of the licensee in Jamaica.

[The inclusion of this page is authorized by L.N. 8812003J

FINANCIAL INSTITUTIONS

(2) For the purposes of this section "prescribed
documents" means-

(a) an audited balance sheet and profit and loss account
in respect of all business transacted by the licensee
in its last financial year and signed by not less than
two of the licensee's directors; and

(h) the auditor's report.

( 2 ~ ) Except as otherwise directed in writing by the ;",!w7
Supervisor the audited balance sheet and profit and loss
account shall be prepared in accordance with generally
accepted accounting principles as set out in the Handbook
of the Institute of Chartered Accountants of Jamaica.

(3) Any licensee which contravenes this section shall
be guilty of an offence.

1 9 . 4 1 ) Where a licensee has a subsidiary or subsidiaries, finsoli-
dated the prescribed documents required for the purposes of ,,t,

section 18 shall include a Consolidated Balance Sheet and l:iizpeeS
Consolidated Profit and Loss Account relating to the licensee listed

companies.
and its subsidiaries.

(2) Where a licensee-

(a) is a subsidiary or parent of; or

( h ) shares a common parent with a company which is
the holding company of,

any other company, each of the aforesaid companies shall
submit to the Bank of Jamaica an audited balance sheet and
profit and loss account in respect of all business transacted
by it in its last financial year and signed by not less than
two of its directors.

--
[The inclusion of this pageis authorized by L.N. 146j19991

FINANCIAL INSTITUTIONS

(3) If in the opinion of the Bank of Jamaica the
information contained in the consolidated accounts fur-
nished by a licensee or individual accounts furnished by a
licensee's subsidiary, parent or holding company, as the case
may be, indicate the likelihood of insolvency, on the part of
the licensee, its parent or holding company or any of its sub-
sidiaries, the Bank of Jamaica may, after consultation with
the licensee, issue to the licensee such directions as the Bank
of Jamaica thinks fit and, without prejudice to the generality
of the foregoing, the directions may require-

(a) the increase of the paid-up capital of the licensee
or, as the case may be, the paid-up capital of the
subsidiary;

( b ) the sale, transfer or other disposition of the subsi-
diary or of part of its business;

(c) the winding up of the subsidiary.

(4) Where a subsidiary of a licensee is registered
under the Industrial and Provident Societies Act-

(a) the accounts of the subsidiary shall be consoli-
dated with those of the licensee to the intent that-

(i) deposits taken by the subsidiary shall be
deemed to be deposits of the licensee for the
purposes of section 9 (maximum deposit lia-
bilities) sections 14 and 15 (cash reserve and
liquid assets); and

lii) loans or credit facilities granted by the sub-
sidiary shall be deemed to be loans of the
licensee for the purposes of section 13 (pro-
hibited business);

[The inclusion of thin pa&= is authorized by L.N. 146119991

FINANCIAL INSTITUTIONS 32.01

(b) any transfer of funds to the subsidiary by the licensee
shall be deemed to be a loan or the granting of credit
facilities for the purposes of section l3(l)(e);

(c) the licensee shall make returns under section 16 in
relation to the operations in Jamaica of the subsidiary
as if the subsidiary were a licensee;

(6) the licensee shall make a return of all loans transferred
to the subsidiary whether for consideration or for
purposes of collection.

(5) Any licensee or company which-

(a) contravenes subsection (2); or

(b) fails to comply with directions issued under subsection
(31,

shall be guilty of an offence.

19A.-41) It is the duty of the auditors of a licensee to report
in writing to the chief executive officer of the licensee, each
director of the licensee and the Supervisor, any material
transactions or conditions that have come to the auditors'
attention in the ordinary course of the audit, which, in the
auditors' opinion meet one or more of the following criteria-

(a) any change in accounting policy or any presentation of
or any failure to present, facts or figures which, in the
opinion of the auditors, has the effect of
misrepresenting the financial position of the licensee;

(b) transactions or conditions giving rise to significant
risks or exposures that have the potential to jeopardize
the licensee's financial viability;

(c) transactions or conditions indicating that the licensee
has significant weaknesses in internal control
which render it vulnerable to significant risks

Duty of
auditors to
report to
Supervisor
on trans-
actions, etc.,
affecting
licensee's
financial
viability.
2711997
S. 12.

[The inclusion of this page is authorized by L.N. 1 1 1120051

FINANCIAL INSTITUTIONS

or exposures that have the potential to jeopardize the
licensee's financial viability;

(6) transactions of an irregular nature that have a
significant or material impact on the licensee's fin-
ancial position;

(e) transactions or conditions that contravene the pro-
0

visions of this Act or any regulations made
thereunder relating to capital adequacy or liquidity
requirements, or any other provisions of this Act;

V) any other transactions or conditions which in the
opinion of the auditors, should be included in a
report under this section.

(2) An auditor who refuses to comply with the pro-
visions of this section shall be guilty of an offence.

(3) Where a report is made under subsection (I), it shall
be presented at the first meeting of the licensee's directors
following the date of its receipt by the licensee's chief executiv
officer and shall be incorporated in the minutes of the meeting.

'7

(4) The report required under subsection (1) shall
be made within thirty days after the date on which the
relevant trans'action or coiiditions came to the attention of
the auditors.

(5) The auditors of a licensee shall not be regarded
as being in breach of their duty of confidentiality to the
licensee in consequence of any report made to the Super-
visor in compliance with subsection (1).

- - -

[The inclusion of this page is authorized by L.N. 1 1 1/2005]

FINANCIAL INSTITUTIONS 32.03

19B.-(1) The Supervisor may, in writing. require the :;gnded
auditor of a licensee to-- 2711997

S. 12.
(u) report in writing to the Supervisor on the extenft

of the auditor's procedures in auditing the balance
sheet and profit and loss account of the licensee
and, as the case may require, its subsidiaries; or

( b ) enlarge the scope of that audit or perform such
other audit procedures as the Supervisor may
specify in any particular case and report thereon
in writing to the Supervisor.

(2) The expenses, as approved by the Supervisor,
of any audit or examination carried out pursuant to sub-
section (1) shall be paid by the licensee concerned.

(3) An auditor who refuses to comply with a
requirement by the Supervisor under subseotion (1) shall be
guilty of an offence.

(4) An auditor of a licensee shall not be regarded
as being in breach of his duty of confidentiality to the licensee
in consequence of any report made to the Supervisor in
compliance with subsection (1).

PART VII. Regulation and Control of Licensees

20.41) Where any person enters into an agreement to Regdnlian
acquire shares in a licensee by virtue of which he would, if ",f,,$,"r;,
the agreement is carried out, obtain effective control of that licensees.
licensee, the agreement shall be subject to the approval of
the Minister and shall contain or be deemed to contain a
clause to that effect.

--
p h e inclnsion of [his page is authorized by L.N. 1461 19991

32.04 FINANCIAL INSTITUTIONS

(2) Where an application for approval required
under subsection (1) is made, the Minister may give his
approval subject to such terms and conditions as he con-
siders necessary and the Minister shall, subject to subsection
(3), give his decision within sixty days of the receipt of the
application and in determining whether or not to approve
the transaction, the Minister shall take into account such
matters as he considers relevant to the application, including,
without limiting the generality of the foregoing, the follow-
ing matters-

(a) the nature and sufficiency of the financial resources
of the applicant as a source of continuing financial
support for the licensee;

(b) the soundness and feasibililty of the applicant's
plans for the future conduct and development of
the licensee's business;

(c) the business record and experience of the applicant;

(dl whether the licence will be operated by persons
who are fit and proper persons as described in
subsection (3) of seotion 4;

(e) where the applicant or any of the applicant's
affiliates is a deposit-taking financial institution.
the size of-

(i) the licensee;

(ii) any deposit-taking financial institution affil-
iated with the applicant,

--
fThe inclurionof t h i ~ page i s authorized by- L.N. l46i19991

FINANCIAL INSTITUTIONS

calculated on such basis as the Minister considers
appropriate;

( f l the best interests of the financial system in Jamaica.

( 2 ~ ) If the Minister refuses to give approval of an ;/;;97
application made under subsection (2), he shall notily the
applicant forthwith and shall give him an opportunity to
make written representations.

(3) For the purpose of making a decision under sub-
section (21, the Minister may require the applicant to furnish
him with such additional information concerning the agree-
ment as the Minister may specify.

(4) For the purposes of this section-

(a) a person shall be regarded as entering into an agree-
ment by virtue of which he would obtain effective
control of a licensee if the person alone or acting
together with any connected person would be in
a position to control 20% or more of the voting
power in the licensee or would hold interests in
2056 or more of the issued shares of the licensee;

( b ) a reference to an agreement by which a person
would obtain effective control of a licensee includes
a reference to an agreement by which the person
would acquire any interest in shares in the licensee
where, upon the acquisition of that interest and of
any other interest in other shares of the licensee
that he has offered to acquire, he would have effec-
tive control of the licensee;

(c) a reference to a person offering to acquire interests
in shares includes-

-
[The ioclunion of this page i 3 authorized by L.N. 116) 19991

FINANCIAL INSTITUTIONS

(i) a reference to a person making or publishing
a statement, however expressed, that ex-
pressly or impliedly invites a holder of
interests in shares to offer to dispose of
those interests; and

(ii) a reference to a person taking part or pro-
posing to take part in negotiations with a
view to the acquisition of shares by that
person;

(6) a person holds an interest in a share if he has any
legal or equitable interest in that share;

( e ) a reference to the voting power of a licensee is a
reference to the total number of votes that may be
cast in the general meeting of the licensee.

Rqulation 21.-(1) Where any person enters into any arrangement
of can-
t o . in relation to any licensee by virtue of which he would, if the " arrangement is carried out, obtain control of the licensee, licen5ecs.

the arrangement shall be subject to the approval of the
Minister.

271 1 9 7 (2) Where an application for approval required
S. 10. under subsection (1) is made, the Minister may give his

approval subject to such terms and conditions as he con-
siders necessary and the Minister shall, subject to subsection
(3), give his decision within sixty days of the receipt of the
application and in determining whether or not to approve
the transaction, the Minister shall take into account such
matters as he considers relevant to the application, including,
without limiting the generality of the foregoing, the following
matters-

(a) the nature and sufficiency of the financial resources
of the applicant as a source of continuing financial
support for the licensee;

mhe inclusion of this page is authorized by L.N 146 119991

FINANCIAL INSTITUTIONS

(6) the soundness and feasibility of the applicant's
plans for the future conduct and development of
the licensee's business;

(c) the business record and experience of the applicant;

(d) whether the licence will be operated by persons
who are fit and proper pcrsons as described in
subsection (3) of section 4;

(e) where the applicant or any of the applicant's
affiliates is a deposit-taking financial institution,
the size of-

(i) the licensee;
(ii) any deposit-taking financial institution affil-

iated with the applicant,
calculated on such basis as the Minister considers
appropriate;

(f) the best interests of the financial system in Jamaica;

( 2 ~ ) If the Minister refuses to give approval of an 2711997
application made under subsection (2), he shall notify the

S 10.

applicant forthwith and shall give him an opportunity to
make a written representation.

(3) For the purpose of making a decision under sub-
jection (2), the Minister may require the applicant to furnish
him with such additional information concerning the
arrangement as the Minister may specify.

(4) For the purposes of this section-
(a) a person shall be regarded as entering into an

arrangement by virtue of which he would obtain

me inclunion of this page is authorized by L.N. l i6 ! 19991

FINANCIAL INSTITUTIONS

control of a licensee if he alone or acting together
with a connected person would be in a position to
determine the policy of the licensee;

(h) the reference tu entering into any arrangement is a
reference to any formal or informal scheme,
arrangement or understanding, whether expressly
or impliedly and, without limiting the generality
of the foregoing, includes a reference to-

(i) creating a trust whether expressly or im-
pliedly; and

(ii) entering into a transaction or agreement,
and references to an arrangement shall be con-
strued accordingly

power to 22.-(1) The Minister may by notice in writing require
obhain ~n-
formatlon any shareholder of a licensee to transmit to the Minister
re share- inlormat~on- haldmg.

(a) as to whether that shareholder holds any voting
shares in thc licensee as beneficial owner or as
trustee; and

( b ) if he holds them as trustee, the person for whom
he holds them (either by name or by other parti-
culars sufficient to enable thosc persons to be
identified and the nature of their interest,

and the shareholder shall comply with that direction within
such time as may be specified in the notice.

(2) Any person who-
(a) fails to comply with a requirement under subsection

(1); or

(6) in response to such requirement, knowingly or wil-
fully supplies false information to the Minister,

shall be guilty of an offence.
~ ~...

rfihe inclusion of this page is authorized by L.N. 1461 19991

FINANCIAL INSTITUTIONS 3 7

23.-(1) Where the Minister is satisfied that any person has Powerto
acquired shares in a licensee in contravention of section 20 or z';it'?n
21, he may by notice in writing served on that person, direct that specified
the shares so acquired (hereinafter referred to as "specified shares.
shares") shall be disposed of within such period as the Minister
may specify or that the specified shares be subject to one or
more of the following restrictions that is to say-

(a) any transfer of, or agreement to transfer, those shares
or, in the case of unissued shares, any transfer of or
agreement to transfer the right to be issued with them
shall be void;

(b) no voting rights shall be exercisable in respect of the
shares;

(c) no further shares shall be issued in right of them or in
pursuance of any offer made to their holder.

(2) A copy of the notice served on the person concerned
under subsection (1) shall be served on the licensee to which the
specified shares relate and, if the notice relates to such shares
held by a connected person, on that connected person.

(3) A Judge of the Supreme Court may, on the
application of a licensee or the Minister, order the sale of any
specified shares and, if they are for the time being subject to any
restrictions under subsection (I), order that they shall cease to be
subject to those restrictions, and the Judge may make such
further order relating to the sale or transfer of the shares as he
thinks fit.

(4) Where specified shares are sold in pursuance of an
order under this section the proceeds of sale, less the costs of the
sale, shall be paid into such fund as the Court may specify for
the benefit of the persons beneficially interested in them, and
any such person may apply to the Court for the whole or part of
the proceeds to be paid to him.

[The inclusion of this page is authorized by L.N. 1 1 1/2005]

1 38 FINANCIAL INSTITUTIONS

restriction
notice.
2711997
S. 12.

Actual or
apprehended
insolvency.
Second
Schedule.
2711997
S. 12.
3812004
S. 4(a)(i).

3812004
S. 4(a)(ii).

Appealagainst 24. Any person who is aggrieved by a notice of refusal
pursuant to section 20 (2A) or any notice served pursuant to
section 21 (2A) or any terms and conditions stipulated by the
Minister in granting approval pursuant to those sections
or any notice served pursuant to section 23 (1) or (2) may
within twenty-one days after receipt of such notice appeal
to the Court of Appeal against the Minister's decision and 0
that Court may make such order as it thinks fit.

PART VIII. Regulation against Unsafe Practices

25.-(1) Where the Supervisor believes that any of the
conditions specified in paragraph 1, 2, 3 or 4 of Part A of the
Second Schedule exists in relation to a licensee, the Supervisor
may-

(a) require the licensee to give an undertaking signed
by the majority of the members of the licensee's
Board to take such corrective action as may be
agreed between the licensee and the Supervisor;

(b) give directions to the licensee under this section;
or

(c) issue a cease and desist order in accordance with Part
C of the Second Schedule.

(2) Directions under this section shall be such as
appear to the Supervisor to be desirable in the interest of
the licensee's depositors and potential depositors, whether
for the purposes of safeguarding its assets or otherwise, and 0
may, in particular-

(a) require the licensee to take certain steps or to
refrain from adopting or pursuing a particular
course of action or to restrict the scope of its busi-
ness in a particular way;

[The inclusion of this page is authorized by L.N. ' 11 1120051

FINANCIAL INSTITUTIONS 38.01

impose limitations on the acceptance of deposits,
the granting of credit or the making of investments;
prohibit the licensee from soliciting deposits either
generally or from persons who are not already
depositors;
prohibit the licensee from entering into any other
transaction or class of transactions;
require the removal of any director or manager.

(3) Where a licensee ceases to be liable for deposits
which were or could have been the subject matter of the
Supervisor's powers under this section-

(a) no direction shall be given by the Supervisor to that
licensee pursuant to this section; and

(b) any direction of the Supervisor which was given to
that licensee shall cease to have effect.

(4) A licensee which fails to comply with any
requirement or contravenes any prohibition imposed by any
direction or cease and desist order under this section shall be
guilty of an offence.

(5) A contravention of any direction or prohibition
imposed under this section shall not invalidate any transaction.

(6) Where the Minister, after consultation with the
Supervisor, believes that a licensee is or appears likely
to become unable to meet its obligations or that
any of the conditions specified in paragraph 5, 6, 7, 8, 9, 1 1 or 3812004
12 of Part A of the Second Schedule exists, the Minister i2@';
may- Schedule.

(a) [Deleted by Act 10 of 2002.1
(b) suspend or revoke the licensee's licence in accordance

with Part E of that Schedule; 1012002
S. 5 (b)(ii).

(c) present to the Court a petition for the winding up of
the licensee or an application regarding reconstruction
of the licensee.

[The inclusion of this page is authorized by L.N. 11 1/2005]

38.02

10/2002
s. 5 (c).

Second
Schedule.

1012002
s. 5 (c).

1 0/2002
s. 5 (c).

FINANCIAL INSTITUTIONS

(6A) Where the Supervisor believes that a licensee is or
appears likely to become unable to meet its obligations or that
any of the conditions specified in paragraph 5, 6, 7, 8, 9, 10, 1 1
or 12 of Part A of the Second Schedule exists the Supervisor
may assume temporary management of the licensee in
accordance with Part D of that Schedule.

(6B) The Minister may, after consultation with the
Supervisor, give to the Supervisor directions of a general
character as to the policy to be followed by the Supervisor in the
performance of his functions under subsection (6A), in relation
to matters appearing to the Minister to concern the public
interest.

(6C) The Supervisor shall inform the Minister in writipg
of any action that he intends to take under subsections (1) (b)
and (c) and (6A).

(7) Where action is taken under paragraph (b) or (c) of
subsection (6) the licensee concerned shall not, without the
consent of the Court-

(a) accept deposits from any person; or

(b) make any payment directly or indirectly to or for the
benefit of any person w h o -

(i) is or was an officer of the licensee at the date
on which the petition was presented, or, as the
case may be, the licence was suspended or
revoked;

(ii) is the immediate relative of such officer; or
(iii) in relation to the licensee, is a connected (3

person.

(8) The provisions of the Companies Act relating to the
mode of winding up by the Court and to arrangements for
reconstructions shall, with such modifications and adaptations as
may be necessary, apply to a petition or application made by
virtue of paragraph (c) of subsection (6).

[The inclusion of this page is authorized by L.N. 11 1/2005]

FINANCIAL INSTITUTIONS 3 9

25A.--(I) Where the Minister, after consultation with the Licensee
ceasing to

Supervisor, is of the opinion that- be viable.
271 1997

(a) a licensee has ceased to be viable; s. 13.

(6) the viability of the licensee cannot be restored by the
exercise of powers under section 25; and

(c) it is in the best interests of the licensee's depositors
that there be a reconstruction of the licensee or a
disposition of its assets in accordance with section
25D on an expeditious basis,

the Minister shall notify the licensee in writing accordingly and
provide the licensee with an opportunity to make representations
within ten days of the receipt of the notice by the licensee.

(2) For the purposes of subsection (1) the Minister
may take into account all matters the Minister considers relevant
and in all cases, whether-

(a) to sustain its operations, the licensee is dependent on
loans, advances, guarantees or other financial
assistance from government agencies or undertakings;

(b) the licensee's capital base is less than the amount
required by this' Act or any regulations made there-
under;

(c) the licensee has failed to pay any liability that has
become due and payable or will not be able to pay its
liabilities as they become due and payable.

(3) The powers conferred by this section and by
sections 25B to 25F may be exercised by the Minister in relation
to any licensee in respect of which the Supervisor has assumed ion002
temporary management pursuant to subsection (6A) of s.6(*m
section 25.

[The inclusion of this page is authorized by L.N. 88/2003]

40 FINANCIAL INSTITUTIONS

Vesting or 25B.41) Where, after due consideration of any repre-
licensee's
shares. etc., in sentations made by the licensee under section 25A (I) , the
Minister. Minister is of the opinion that the matters specified in para-
27'1997 s. 3. graphs (a) and (b) of section 25A (1) are applicable to that

licensee, the Minister may, by order (hereinafter referred to
as a vesting order) vest the shares and subordinated debt
of the licensee in the Minister, subject to the approval of
the Cabinet on the recommendation of a committee of
advisors comprising the Supervisor, the Deputy Supervisor,
the Financial Secretary and such other person as the Min-
ister may appoint.

(2) An order made under subsection (1 )--

(a) vests the shares and subordinated debt of the licensee
in the Minister as from the date of the order, free from
any encumbrance attaching thereto, notwithstanding
that the Minister knows of the encumbrance;

(b) does not extinguish any adverse claim in relation to
such shares and subordinated debt to the extent that it
is a personal claim against a person other than the
Minister or a person claiming under him; and

(c) does not prevent a secured creditor or assignee or
successor in title of the person who was the holder of
the shares or subordinated debt immediately before the
making of the order, from being entitled to receive
compensation under section 25F.

E ~ T C ~ or 25C.41) Where a vesting order is made in respect of a
vesting order.
2,,, licen-

(a) the powers, duties, functions, rights and privileges of
the directors of the licensee and those of its
officers responsible for its management are
suspended fiom the date of the order and the Minister

[The ~ n c l u s ~ o ~ ~ of this page 1s authorized by L N . 88120031

FINANCIAL INSTITUTIONS

may exercise or perform those powers, duties,
functions: rights or privileges;

( b ) the Minister may anpoint one or more persons to
assist in the management of the licensee and may
assign to such person or persons any of the powers,
duties, functions, rights or privileges of the directors
and officers of the licensee;

(c) the Minister may, if he considers it to be in the best
interests of the licensee's depositors, apply to a
Judge of the Supreme Court for an order staying-

(i) the commencement or continuance of any
proceedings by or against the licensee for
such period as the Judge thinks fit;

(ii) any execution against the property of the
licensee;

(d) no creditor of the licensee shall enforce any
remedy against the licensee or its property without
the leave of a Judge of the Supreme Court;

{e) no person may terminate or amend any agreement
with the licensee or claim an accelerated payment
under any agreement by reason only of-

(i) the insolvency of the licensee;

(ii) a default, before the vesting order was made,
by the licensee in the performance of its
obligations under the agreement; or

(iii) the making of the vesting order.

(2) Any stipulation in an agreement referred to
in paragraph (e) of subsection (1) shall be of no force or
effect if it-

[The inclusion of this page is zuIhorizcd by L.N. 146j 19991

FlNANClAL INSTITUTIONS

(a) has the effect of providing for or permitting, any-
thing that is contrary to that paragraph; or

Ib) provides in substance that on-
i the licensee's insolvency;
(ii) default by the licensee in the performance

of an obligation; or
(iii) the making of the vesting order,

the licensee ceases to have the rights to use or deal
with property that the licensee would otherwise
have.

13) Subject to subsection (4), paragraph (el of sub-
section (1) shall not apply in respect of an agreement with
the licensee which was made no later than six months prior
to the date of the vesting order.

(4) Subsection (3) shall not apply in respect of an
agreement between the licensee and a connected person.

15) Where an order is granted pursuant to para-
graph (c) (i) of subsection (1) in respect of any proceedings
time shall not continue to run against the person bringing
those proceedings during the period determined by the Judge
under that paragraph.

~estructur- 25D.-(1) Where a vesting order has been made in
ing tram-
, respect of a licensee the Minister may, in addition to his
27/1997 other rights and powers. carry out, or cause the licensee to S 13.

carry out-
(a) a transaction or a series of transactions that involves

the sale of all or part of the shares or subordinated
debt of the licensee to one or more buyers;

(b) a transaction that involves the amalgamation of
the licensee;

Whe inclusion of this; is authorized by L.N 146) 19991

FINANCZAL INSTITUTIONS 40.03

(c) a transaction or a series of transactions that involves
the sale or other disposition of all or part of the assets
of the licensee or the assumption of all or part of its
liabilities; or

(4 any other transaction or series of transactions the
purpose of which is to restructure all or a substantial
part of the business of the licensee.

(2) Where the Minister considers that a transaction
or a series of transactions referred to in subsection (1) has
been substantiapy completed, he shall cause a notice to that
effect to be published in the Gazette, specifying the date of
such completion.

(3) No restriction on the right of a licensee in
respect of which a vesting order has been made, to sell any
of its assets or to provide for the assumption of any of its
liabilities, other than a restriction provided for in an Act,
shall apply so as to prevent the Minister, the licensee or any
other person, from carrying out a transaction referred to
in subsection (1).

25E.-(1) The Minister shall apply to the Court for a winding winding up
up order or propose an arrangement for reconstruction under the :Ecee
provisions of this Act in respect of a licensee if, in the opinion of ment.

27/1997 the Minister, a transaction or a series of transactions referred to ,, ,,.
in section 25D (I) is not substantially completed on or before a
date that is-

(a) one hundred and eighty days after the making of
the vesting order; or

(b) the expiration of any extension of that period.

(2) The Minister, in relation to all costs, expenses and
liabilities incurred on account of actions taken by him in
relation to a licensee in respect of which a vesting order

[The lncluslon of this page is authorized by L.N. 180N20061

40.04 FINANCIAL INSTITUTIONS

has been made, shall, in a winding up of such licensee, be a
creditor of that licensee and all such costs, expenses and
liabilities shall be deemed to be impositions by the Government
under section 3 11 (1) of the Companies Act and accordingly
shall be paid in priority to all other debts.

(3) Where it is found necessary to extend the period
specified in subsection (1) (a)-

(a) the Minister shall apply to the Court for such
extension;

(b) the Court may grant the extension for such period
as the Court thinks fit, having regard to all the
circumstances.

Notice re
compensa-

25F. The Minister shall, within forty-five days after the date
tion. specified in the notice referred to in subsection (2) of section
2711997 25D, give to each person who, immediately before the making
S. 13.

of the vesting order was the holder of shares or subordinated
debt in the licensee to which the vesting order relates or the
assignee or successor in title of that person-

(a) a notice containing an offer of compensation in an
amount to which that person would be entitled,
determined in accordance with section 25H; or

(b) a notice stating that no offer of compensation is being
made because the amount of compensation so
determined is nil.

Applicationof 256. The provisions of sections 25A to 25F inclusive shall
sertions 25A
to SF. apply without prejudice to any other provision of this Act.
271 1997
S. 13.

Determination 25H.-41) The amount of compensation payable to a
of compen-
sation. person affected by the making of a vesting order in respect
2711997 of a licensee shall be calculated on the net amount accruing
S. 13.

[The Inelunion of thls page Is authorized by L.N. 180A/Z006]

FINANCIAL INSTITUTIONS

upon completion of any of the transactions referred to in
subsection (1) of section 25D, after payment of all outstanding
liabilities of the licensee and all other costs incurred in relation
to such transactions.

(2) Where the amount of the licensee's assets does
not exceed its liabilities and any financial assistance and
costs referred to. in subsection (I) , the amount of compen-
sation shall be nil.

(3) The Minister shall make regulations prescribing
the principles and procedures applicable to the calculation
and payment of compensation payable under this section
and matters incidental thereto and regulations so made shall
be subject to affirmative resolution of the House of Repre-
sentatives.

251. A licensee in respect of which a vesting order has been Application
to court. made or any person claiming an interest or right over any

property to which that order relates may make an application to s. 13.
the court for the purpose of-

(a) establishing such right or interest (if any);

(b) determining the amount of compensation (if any)
to which he is entitled;

(c) enforcing his right to any such compensation.

25J.-(1) Where- Revcstmg of
shares and C' subordl- (a) a vesting order has been made under section 25B (1) nateddebt.

in respect of a licensee; and 27!1997
S 13.

(b) before any action is taken by the Minister pursuant to
section 25D (I),

[The inclualon uf this page ia authorized by L.N. 180A120061

FINANCIAL INSTI T UTIClNS

the Minister is satisfied that the matters specified in section
25A (1) and (2) are no longer applicable in respect of
that licensee, the Minister may act in accordance with subsection
(2).

(2) The Minister may, with the approval of the
Cabinet on the recommendation of the committee of
advisors referred to in section 25B (I), by order, revest the
shares and subordinated debt of the licensee in-

(a) the persons who, immediately before the making
of the vesting order, were the holders of those
shares and subordinated debt; or

(b) the assignors and successors in title of those
persons.

(3) An order made under this section shall be sub-
ject to such terms and conditions as may be specified therein.

Windingup 26.-(1) The provisions of this section shall apply in the case
of foreign
licensee. of the winding up under Part IX of the Companies Act of a

foreign licensee to which section 362 of that Act applies whether
that licensee is registered under Part X of the Companies Act or
not.

(2) Notwithstanding anything to the contrary in any
other law, the realizable assets of a licensee referred to in
subsection (1) which relate to the licensee's Jamaican opera-
tions shall be deemed to be the assets of the branch of that
licensee operating in Jamaica (hereinafter referred to as the
Jamaican branch) as if that branch were a company as
defined in this Act and shall be available for distribution in
accordance with the priorities set out in subsections (3), (4)
and (5).

(3) In lieu of the provisions of section 311 (1) of the
Companies Act, the following claims shall have priority-

[The inclualon of thla page is authorized by L.N. 180A120061

FINANCIAL INSTITUTIONS

(a) firstly, all rates, charges, taxes, assessments or
impositions, whether imposed or made by the
Government or by any public authority under the
provisions of any law, and having become due and
payable within twelve months next before the date of
the winding up order (in this section referred to as "the
relevant date");

(b) secondly, the wages and salaries of the officers and
employees of the Jamaican branch that accrued during
the six months immediately preceding the relevant
date;

(c) thirdly, money received by the Jamaican branch
from the public on deposit account or other
similar account;

(6) fourthly, all amounts due in respect of any com-
pensation or liability for compensation under the
Workmen's Compensation Act accrued before the
relevant date;

(e) fifthly, all amounts by way of contributions for
which the Jamaicatt branch is liable pursuant to
sections 4, 5 and 6 of the National Insurance Act
and which have become due and payable before
the relevant date;

0) sixthly, redundancy payments payable under the
Employment (Termination and Redundancy Pay-
ments) Act;

(g) seventhly, all amounts by way of contributions for
which the Jamaican branch is liable pursuant to the
National Housing Trust Act or the Human
Employment and Resource caining Act and which
have become due and payable before the relevant date;

[The inclusion of this page Is authorized by L.N. 180.4/20061

FINANCIAL, INSTITUTIONS

Obligation of
manager to
supply
information.
1012002
S. 7.

(h) eighthly, all amounts owed to general creditors of the
Jamaican branch.

(4) The provisions of subsections (2), (?), (4) and (5) of
section 3 1 1 of the Companies Act shall mutatis mutandis apply
for the purposes of subsection (3) of this section.

(5) ARer payment of the priority claims against the
Jamaican branch, all remaining claims against that branch may
then be paid.

(6) In this section "foreign licensee" means a licensee
which is not incorporated in Jamaica.

27.-41) Without prejudice to the provisions of section 16,
the Supervisor may, by instrument in writing, require the
manager of any licensee to supply, within such time as may be
specified in the instrument, such information relating to the
financial position of the licensee including that of its branches
and subsidiaries as may be so specified; and any person who
fails to comply with the requirements of such an instrument or
who in response to such instrument knowingly or wilfully
supplies false information to the Supervisor shall be guilty of an
offence.

(2) The Manager of a licensee which is or is likely to
become unable to meet its obligations shall, without prejudice to
any obligation imposed under subsection (1) forthwith inform

lo12002 the Supervisor in writing of the financial position of the
s. 7. licensee.

Resignation, 28.-(1) Where an auditor appointed by a licensee-
etc., of
auditor.

(a) intends to resign at any time during the currency of
such appointment; or

[The inclusion of this page Is authorhd by L.N. 180N20061

FINANCIAL INSTITUTIONS

(b) has given notice in writing to the licensee of his
unwillingness to be considered for reappointment at
the expiration of the period for which he is appointed,

that auditor shall give written notice to the Bank of Jamaica
accordingly, and shall in such notice state the reasons for his
intention to resign or his unwillingness to be considered for
reappointment.

(2) Where-

(a) a licensee intends to terminate the appointment of its
auditor; or

(6) a resolution has been passed at any general meeting of
the licensee, providing that the auditor shall not be
reappointed,

the licensee concerned shall notify the Bank of Jamaica
accordingly, and shall in such notification state the reason for
such intention to terminate or for the passage of such resolution.

PART IX. Supervision and Ewmination of licensees

29.-31) The Bank of Jamaica is responsible for the ~ulrti-of
supervision of licensees. supervisory mmtlmt

&this (2) For the purposes of subsection (I), the Bank of ,
Jamaica shall-

(a) compile such statistics relating to the practice of
licensees in Jamaica as the Minister may require; and
maintain a general review of such practice in Jamaica;

(b) examine and report to the Minister on the several
returns delivered to him pursuant to section 16;

[The inclusion of this page is authorized by L.N. 8812003]

(c ) at least once in each year examine in such manner as it
thinks necessary the affairs or business of every
licensee carrying on business in Jamaica for the
purpose of being satisfied that, the provisions of this
Act are being complied with and that the licensee is in
a sound financial position, and report to the Minister
the results of every such examination;

(4 examine and make recommendations to the Minister
with respect to applications for licences;

(e) subject to such provisions as may be prescribed, be
entitled to summon the auditor or any former auditor
of a licensee for the purpose of making enquiries into
the operations 'and financial position of that licensee;

V) submit to the Minister-

(i) an annual report relating generally to the
execution of its duties; and

(ii) at any time, a report relating to the condition
of any licensee examined by it,

and any such report may contain such recommendations as the
Bank of Jamaica considers necessary or desirable to correct any
malpractices or deficiencies discovered in the execution of its
duties.

(3) Where an auditor is summoned under paragraph (e)
of subsection (2), the Bank of Jamaica shall in writing notify the
licensee concerned which shall have the right to attend any
meeting held by the bank with that auditor.

[The ~ncluslon of this page I S author~zed by L N 88120031

FINANCIAL INSTlTUTlONS 44.01

29A.--(1) Where in any particular case, the Supervisor has z2
reasonable cause for believing that a special audit of a licensee examination
should be conducted by an auditor other than the licensee's ;:t;;er.
auditor, the Supervisor may appoint an auditor or a firm of s. 14.
auditors for that purpose.

(2) Where an auditor or a firm of auditors is appointed
pursuant to subsection (I), the Supervisor shall require that
auditor or firm of auditors to carry out and report in writing to
the Supervisor on-

(0

(ii)

such examination of the licensee's procedures
as the Supervisor may specify in order to
determine whether or not those procedures are
adequate for the protection of the licensee's
depositors and shareholders;

such other examination of the licensee as, in the
opinion of the Supervisor, is necessary in the public
interest.

(3) The expenses, as approved by the Supervisor, of
any audit or examination carried out pursuant to subsection (1)
shall be paid by the Supervisor and the amount so paid-

(a) shall be repaid to the Supervisor by the licensee
concerned; and

(b) may be recovered by or on behalf of the Supervisor
summarily in a Resident Magistrate's Court without
limit of amount, as a civil debt.

[ I hc ~ ~ i c h ~ r ~ t i n of hs page 1s nuthonzed bv L N 88/2003]

FINANCIAL INSTITUTIONS

Supen i so~
Department to
have access to
books. etc., o f
holding com-
pany.
271 1997
S. 14.

Supervisor
may require
information.
10/2002
S. 8.

(4) An auditor or firm of auditors, appointed under
subsection (I), of a licensee shall not be regarded as being in
breach of a duty of confidentiality to the licensee in consequence
of any report made to the Supervisor in compliance with
subsection (1).
29B.-41) Where a licensee is a subsidiary of a holding

company, the Supervisory Department shall be entitled at all
reasonable times to examine the books, records, statements and
other relevant documents of that holding company.

(2) The Supervisory Department may in writing
require the manager of the holding company to hrnish the
Department with such information concerning the operations of
the holding company as the Department shall specify.

(3) A person who fails to comply with a request of the
Supervisory Department under subsection (2) shall be guilty of
an offence.
29C.-31) The Supervisor may require any company which is

a member of a group of which a licensee is a member, or as the
case may require, all companies within that group, to submit to
the Supervisor such information relating to the operations of that
company or those companies, as the Supervisor considers
necessary for the effective supervision of the licensee
concerned.

(2) The information referred to in subsection (1) may
be required for the purpose of determining-

the effect of that company's operations on the
licensee;
whether a member of the group is obtaining financing
or other benefit, whether directly or indirectly fiom the
licensee;
the general risks relating to the operations of the
members of the group;
the risk management capabilities of the group as a
whole;

[The ~nclusion of this page is authorized by L.N. 8812003]

(e) whether the internal audit facilities within the group
have the capability to scrutinize transactions
undertaken or proposed to be undertaken by the
management of the group or a company within the
group so as to determine whether there are associated
risks.

(3) For the purposes of this section the Supervisor
may-

(a) require the information in the form of documents
(including audited and consolidated accounts); or

(b) summon any officers, directors or substantial
shareholders of the company or companies concerned
for the purpose of obtaining the information.

(4) A company which refuses to hmish information
required under subsection (1) or any person who rehses to obey
a summons issued to that person under subsection (3) (b), shall
be guilty of an offence.

29D.-41) Where a licensee is a member of a group and at -
ing of least one member of that group is not a licensee or other wp

regulated or supervised financial institution, the Supervisor may, &I-.
in &ting, direct the licensee to undertake- l o r n S. 8.

(a) a restructuring such that ownership of the licensee is
directly held by a financial holding company which
does not own the other companies within the group
unless those other companies are regulated or
supervised financial institutions; or

(b) such other measures as may be necessary to properly
identifi., assess and manage-

(i) the relationship between the companies in the
group;

(ii) the risks among members of the group; and

(iii) any other risks posed by external factors.
[The inclusion of this page is authorized by L.N. 88/2003]

FINANCIAL INSTITUTIONS

(2) The restructuring under subsection (1) shall be
carried out within twelve months of the date of the direction, so,
however, that the Supervisor may extend the period by notice in
writing to the licensee.

(3) A licensee which wilhlly refuses to comply with a
direction under subsection (1) shall be guilty of an offence.

(4) Without prejudice to the operation of subsection (3),
the Minister may revoke the licence of the licensee referred to in
that subsection.

(5) Where a group is restructured, the Supervisor may-

examine and inspect the books of the licensee's
financial holding company and any other company
which is a subsidiary of the financial holding company
and any subsidiary of that other comp~i-.y;

require the manager of any member of the group to
provide information concerning its operations, so as to
ascertain the likely effects of such operations on the
licensee;

review changes in the ownership, directors and
managerial personnel of the financial holding
company and make recommendations to the Minister
as regards those persons who do not meet the fit and
proper criteria.

(6) Where a licensee is a member of a group and the
licensee or any other member within the group has a relationship
with a company that is not a member of the group, which poses
a risk to the licensee and other members of the group, the
Supervisor may-

(a) treat the non-member as a member of the group; or
(b) require the licensee or other member of the group to

terminate the relationship.

[The inclusion of this page is authorized by L.N. 88/2003]

HNA NCIA L ZNSTZT UTIONS 44.05

(7) A financial holding company referred to in
subsection (1) may be the ultimate holding company of the
group or the immediate subsidiary of the ultimate holding
company.

(8) The provisions of section 4 (3) shall apply with
necessary modifications to every director and manager of an
ultimate holding company or a financial holding company and
its subsidiaries.

(9) The Supervisor may exempt fiom any provision of
this section and section 29C, any foreign financial holding
company or foreign ultimate holding company where he is
satisfied as to the matters specified in subsection (10).

(10) The Supervisor may take the action under
subsection (9) where he is satisfie&

(a) as to the stringency of the fit and proper criteria
applied by the competent authority in the country of
incorporation of the foreign financial holding
company or foreign ultimate holding company;

(b) by the competent authority in the country of
incorporation of the foreign financial holding
company that-

(i) the foreign financial holding company is
supervised on a consolidated basis; and

(ii) there are no impediments to the
Supervisor's receipt of information as
regards that foreign financial holding
company fiom the head office thereof or the
competent authority.

29E.-41) Subject to subsection (2), a licensee may only own Ownership
a subsidiary which is a regulated or supervised financial zbsi&&e,
institution. by licensee.

10/2002

(2) The Supervisor may approve the ownership of a S.8.
company by a licensee or its financial holding company, if the

[The incluston of this page is authorized by L.N. 8812003]

FINANCIAL INSTITUTIONS

Supavira
may issue
directions re
risk.
1012002
S.8.

Management
or investment
of client's
fun&
10/2002
S. 8.

Powers of
inspeclion.

business of that company is the provision of necessary support
services to companies held by the financial holding company
and its subsidiaries.

29F.-41) The Supervisor may issue directions to a licensee,
or its financial holding company, regarding the control of risks
throughout the group.

(2) The directions referred to in subsection (1) may
i nc lude

(a) capital requirements including market risks on a
groupwide basis;

(b) limits on-
(i) large exposures

(ii) intra group transactions;

(iii) holdings in any regulated or supervised
financial institution.

(3) A licensee or financial holding company which
fails to comply with directions under this section shall be guilty
of an offence.

296.-41) A licensee shall not manage or invest hnds on
behalf of its clients unless such investment is carried out under
a trust subject to regulations made under the Bank of Jamaica
Act or the Standards of Best Practice issued from time to time
by the Bank of Jamaica.

(2) A licensee that engages in proprietary trading in
securities for its own account shall conform with the Standards
of Best Practice referred to in subsection (1).

30.--(1) In the performance of his duties under this Part an
authorized officer shall be entitled at all reasonable times--

(a) to have access to all books, records and documents in
the possession or control of any director, manager,
officer or employee of any licensee;

(b) to require any director, manager, officer, auditor,
former auditor or employee of any licensee to

[The i~~cli~sion of this page is authorized by L.N. 8812003]

FINANCIAL INSTITUTIONS

furnish such information or t o produce such books,
records or documents as are in his possession or
control,

that relate to the operations of the licensee and may be
reasonably required for the performance of those duties.

(2) Any person who-
(a) fails to attend in response to a sununons pursuant

lo section 29 (2) (el; or
(b ) fails to comply with a requirement made pursuant

to subsection (1) (b) of this section; or
(c! wilfully attempts to mislead or makes any false

statement with intent to mislead or attempts to
mislead any person in the execution of his duties,
under this Part; or

(d ) without lawful justification or excuse, obstructs or
hinders any person in the execution of such duties,

shall be guilty of an offence

31. An auditor or former auditor of a licensee shall not p r o t d o n
of auditor.

be regarded as being in breach of his duty of confidentiality 21,1991
to a licensee in consequence of any disclosure to an S IS.

authorized officer pursuant to section 29 or 30.

PART X. Winding U p of Licensees

32.-(1) Where a licensee passes a resolution for volun- :;zi;-n
tary winding-up, it shall forthwith notify the Bank of Jamaica taw wind-
in writing and shall furnish to the Bank of Jamaica- inp w.

(a) a statement of its financial position:
(b) an up-to-date profit and loss account:
(c) the balance sheet as at tht date to which the profit

and loss account is made up;
(d) the auditor's report in relation to such account and

balance sheet.
-. -
[The inclusion of thin page i s authorize3 L.N. 146: 19991

46 FINANCIAL INSTITUTIONS

(2) A resolution for voluntary winding up of a
licensee shall not be effective unless the Bank of Jamaica
certifies that its realizable assets are such as to enable it to
satisfy the clailns of its creditors.

(3) Where a licensee passes a resolution for volun-
tary winding up, it shall-

(0) cause a copy of the resolution to be published in
the Gnzette and in a daily newspaper printed and
circulated in Jamaica;

ih) give notice of the resolution to its customers, in
such form and containing such information as the
Minisler may approve,

and such licensee shall. within thirty days after the date of
publication of s copy of the resolution pursuant to para-
graph (u). ceasz to carry on the business of taking deposits
in Jamaica.

(4) .4 licensee which contravenes the provisions of
subjection (I) shall be guilty of an offence.

PART XI. A rnulgumation and Transfers

halgama- 33.-(1) A licensee may, with the approval of the Minis-
tioo and
,,,f., ter enter into an agreement or arrangement-

fa) to amalgamate its property and business (whether
in whole or in part) with the property and business
of any other licensee or: as the case may be. a
bank;

fbj lo transfer its business (in whole or in part) to
another licensee or, as the case may be, a bank.

12) Application to the Minister for approval pur-
sunnt to sitbsection (1) shall be presented in the form of
a .wheme and shall be regulated in accordance with such
provisions as may be prescribed.

[Thc inclusion of this p g e in authorized by L.N. 1461 19991

FINANCIAL INSTITUTIONS 47

3 4 . 4 1 ) Where an amalgamation or transfer referred to statements
+ - relating to in xxtio;i 22 t aka place, the licensee or bank, as the case an~almma-

may be, as amalgamated or to which business is transferred ?&foc: hs
shall, within thirty days from the date of completion of the $Fporited
amalgamation or transfer or such longer period as the Min- Minister.
ister may allow. deposit with the Minister-

(a) certified copies of statements of the assets and lia-
bilities of the licei~sees or, as the case may be, the
licensee and bank concerned in the amalgamation
or transfer, together with a statement of the nature
and terms of the amalgamation or transfer;

( h ) a certified copy of the agreement or deed under
which the amalgamation or transfer is effected;

(el a declaration signed by the secretary or manager,
if any, and by at least two directors of the licensee,
or bank, as the case may be, that to the best of
their belief every payment made or to be made
to any person on account of the amalgamation or
transfer is therein fully set out, and that no pay-
ments other than those set out have been made or
are to be made by or with the knowledge of any
parties to the amalgamation or transfer.

(2) A person who in any statement, agreement, deed
or declaration referred to in subsection (I) causes or permits
the inclusion of any information which he knows to be false
in a material particular or recklessly includes any informa-
tion which is false in a material particular, shall be guilty
of an offence.

35. Where a licensee sells the whole or any part of its vesting
assets to any other licensee or, as the case may be, a bank, zitsoP"
if the purchasing licensee or the purchasing bank requires licensn.
that assets included in the agreement for sale and purchase
be vested in it pursuant to this section, it may make written
application to the Minister accordingly specifying which of

[The inclusion of this page is authorized by L:N. 42/1995]

FINANCIAL INSTITUTIONS

the assets included as aforesaid it requires to be so vested
and thereupon the Minister may, if he thinks fit, make an
order vesting, subject to the agreement for sale and pur-
chase, the assets so specified in the purchasing licensee or
purchasing bank, as the case may be, and thereupon-

(a) the assets shall so vest without further conveyance,
assignment and assurance; and

(b ) without prejudice to paragraph (a), the selling
licensee shall, if requested by the purchasing
licensee or purchasing bank, as the case may be,
execute such formal and separate conveyances,
assignments and assurances as are resonably
required by the purchasing licensee or purchasing
bank, as the case may be, in conformity with tne
agreement for sale and purchase.

Trmafcr
of t N S t

36.41) Where an agreement has been entered into for
b u s j , ~ . the acquisition by a licensee or a bank, as the case may be,

(hereinafter referred to as the "transferee licensee" or the
"transferee bank) of the trust business of another licensee
(hereinafter referred to as "the transferor licensee") the
transferee licensee of the transferee bank may, for the pur-
pose of effecting the transfer to, and the vesting in, the trans-
feree licensee or the transferee bank of that trust business,
make a written application to the Minister accordingly, and
thereupon the Minister may, if he thinks fit, make an order
transferring to and vesting in the transferee licensee or the
transferee bank, subject to the relevant agreement, the trust
business specified in the order, and thereupon-

(a) the trust business so specified shall be transferred
and shall vest without further conveyance, assign-
ment and assurance; and

(b ) without prejudice to paragraph (a), the transferor
licensee shall, if requested by the transferee licensee
or the transferee bank. execute such formal and

- me inclusion of this page is authorized by LN. 42 119951

FINANCIAL INSTITUTIONS

separate conveyances, assignments and assurances
as are reasonably required by the transferee licen-
see or the transferee bank in conformity with the
relevant agreement.

( 2 ) No transfer or vesting effected by an order under
subsection (1) shall-

(a) operate as a breach of covenant or condition
against alienation;

( b ) give rise to any forfeiture; or
ic) invalidate or discharge any contract or security.

(3) The transfer to and vesting in the transferee
licensee or transferee bank of any trust business pursuant
to this section shall not be subject to the provisions of the
Stamp Duty Act or the Transfer Tax Act.

37.-(1) Any trust business transferred to and vested in E M of
transfer and

a transferee licensee or transferee bank by virtue of an restmg
order made pursuant to section 36, which immediately order.
before the coming into force of that order was held by the
transferor licensee, whether alone or jointly with any other
person-

(a) as trustee or custodian trustee of any trust, deed,
settlement, covenant, agreement or will, and
whether originally so appointed or not, and
whether appointed under hand or seal or by order
of any court;

(b ) as executor of the will of a deceased person;
(c) as administrator of the estate of a deceased person;
(d) as judicial trustee appointed by order of any court;

or
(e) in any other fiduciary capacity whatsoever,

shall from the coming into force of the relevant order made
pursuant to section 36, be held by the transferee licensee, --

p e inclusion of th is page is authorized by L.N. 42 j 19%

FINANCIAL INSl'ITUTIONS

or the transferee bank whether alone or jointly with such
person, in the same capacity upon the trusts, and with and
subject to the powers, provisions, liabilities and obligations,
applicable therelo respectively.

( 2 ) Any existing instrument or order of any wurt
under or by virtue of which any trust business became
vested in the transferor licensee in any such fiduciary capa-
city (including in the case of a will any grant of probate
thereof), and any provision therein or any existing contract
or arrangement fur the payment to, or retention by the
transferor licensee of remuneration for its services in any
such fiduciary capacity shall, on and from the coming into
operation of the relevant order be construed and have effect,
so far as the context permits, as if for reference therein to
the transferor licensee there were substituted a reference to
the transferee licensee or the transferee bank.

(3) All existing contracts, agreements, conveyances,
deeds: leases, licences. undertakings and other instruments,
whether analogous to the foregoing or not, entered into by,
made with, or addressed to a transferor licensee (whether
alone or with any other person) shall be binding and of
full force and effect in every respect against or in favour
of a transferee license or the transferee bank as fully and
effectively as if, instead of the transferor licensee the trans-
feree licensee or the transferee bank had been a party there-
to, bound thereby or entitled to the benefit thereof.

(4) Any will, whether made before, on or after the
coming into force of an order made pursuant to section 36,
by a person dying before, on or after such coming into force,
which appoints or purports to appoint the transferor licen-
,see to be executor or trustee thereof shall be construed and
have effect as if for any reference therein to the transferor
licensee as such executor or trustee or otherwise in connec-
tion with such appointment there were substituted a refer-

[The inclusion of this pagc i s a u t h o r i d by L.N. 42119951

FINANCIAL INSTITUTIONS

ence to the transferee licensee or the transferee bank and, in a
case where the transferee licensee or the transferee bank did not
exist at the date of the will, as if it had then existed.

(5) No testamentary gift shall be adeemed by reason
only of the operation of the provisions of section 36 and
this section.

(6) In this section-

"existing" means, in relation to an order made pursuant to
subsection (1) of section 36, existing at the date of the
coming into operation of that order;

"will" includes a codicil or any other testamentary writing.

PART XII. General

38.-(1) The Minister may make regulations for the purpose Regulations
of giving effect to the provisions of this Act and, without
prejudice to the generality of the foregoing, regulations may
make provision in relation to-

(a) [Deleted vide Act 10 of 2004.1

(b) the establishment of branches and representative
offices-

(i) in Jamaica by licensees; or
(ii) otherwise than in Jamaica by a licensee

incorporated in Jamaica;

(c) the qualification required by auditors of licensees
and the frequency and scope of audits;

(4 the minimum security precautions and standard
security devices to be adopted by licensees;

(e) the obligation of licensees to provide for doubtful
loans and other asset-based risks;

V) the criteria to be taken into account in determin-
ing assets and liabilities of licensees and the

[The inclusion of this page is authorized by L.N. 180A120061

FINANCIAL INSTITUTIONS

formulae to be applied fqr the purpose of determining
the value of such assets 4nd liabilities;

(g) the criteria as regards the minimum solvency stan-
dards to be maintained by licensees and as regards the
measurement of the capital bases of licensees;

(h) the firnishing of information by an auditor of a
licensee as respects the operations and other parti-
culars relating to a licensee audited by him;

(1 ) the form and contents of advertisements to be issued
by licensees;

(j) the form of any notice required or authorized to be
delivered or given under this Act;

(k) the criteria as regards the payment of dividends by
licensees and the transfer of profits by licensees to
their capital bases;

( I ) any other matter required by this Act to be prescribed.

(2) The power conferred gn the Minister by paragraphs
2711997
S. 16(h)

(e), V) and (h) of subsection ( 1 ) shall be exercised after
consultation with organizations recognized by the Minister as
representing licensees.

Restrictions 39. The Minister may, after consultation with the Supervisor
on loam on
the security of and the organization referred to in section 38 (2), by order
land. require every licensee in lending money on the security of land

to comply with such conditions as may be specified in the
order:

Provided that no such order shall apply to or affect any
transaction entered into by the licensee prior to the making of
the order.

Unclaimed 40.-41) Where by any such annual return as is required
moneys. by section 16 it appears that any moneys have remained

unclaimed in the possession or under the control of a
licensee for a period of fifteen or more years the Minister shall

[The lnclualon of this page la authorized by L.N. 180A120061

FINANCIAL INSTITUTIONS

cause a notice to be published in the Gazette and in one or more
than one newspaper published in Jamaicit-

(a) giving full particulars of the moneys so remaining as
aforesaid;

(b) stating the period during which they have so remained;
and

(c) stating that unless within one year from the date of the
first publication of the notice in the Gazette a claim to
those moneys is established to the satisfaction of the
licensee concerned or, failing that, to the satisfaction
of a court of competent jurisdiction, the moneys will
be dealt with in accordance with subsection (Z),

which notice shall during the said year be published four times
or more often if the Minister thinks fit.

(2) Subject to subsection (3), upon the expiration of the
said year any of such moneys to which no claim has been
established as aforesaid shall lapse to and become part of the
revenues of Jamaica and the Accountant-General shall keep a
record of all such moneys.

(a) a claim has been duly made but not determined during
the said year; or

(b) before the expiration of that year the claimant lodges
with the Accountant-General a certificate to that effect
signed by the Judge or Resident Magistrate, as the
case may be,

subsection (2) shall not have effect in relation to the moneys in
question until the claim is settled.

(4) Any sum as respects which subsection (2) takes
effect shall be recoverable Erom the licensee as a debt due to the
Government .

[The inclusion of this page is authorized by L.N. 8812003]

FINANCIAL INSTITUTIONS

(5) Where subsection (2) takes effect as respects any
sum, then not later than fifteen years after the year referred to in
that subsection, the Accountant-General shall pay that sum to
any person who establishes a claim thereto to the satisfaction of
the Accountant-General.

Fraudulent
inducement to

41. Any person who, by any statement, promise or forecast
invest. which he knows to be misleading, false or deceptive, or by any

dishonest concealment of material facts, or by the reckless
making (dishonestly or otherwise) of any statement, promise,
forecast or projection which is misleading, false or deceptive,
induces or attempts to induce another persow-

(a) to invest money on deposit with him or with any other
person;

(b) to enter into or offer to enter into any agreement for
that purpose,

shall be guilty of an offence.

mrencesand 42.-31) The offences specified in the first column of the
penalties.
Third Third Schedule shall incur the penalties specified in relation
Schedule. thereto in the second column of that Schedule.

(2) Every offence under and every contravention of this
Act may be tried summarily before a Resident Magistrate.

(3) Where any person commits an offence against this
Act or any regulations hereunder for which no penalty is

10/2002 expressly provided he shall be liable to a fine not exceeding five
S. 9 (a). hundred thousand dollars or to imprisonment for a term not

exceeding six months.

(4) A person upon whom a fine is imposed under this
Act may be sentenced in default of payment thereof to
imprisonment with or without hard labour in the case of a fine-

[The inclusion of this page is authorized by L.N. 88120031

(a) not exceeding two hundred thousand dollars, for a 10~2002
period not exceeding three months; S . 9 (b).

(b) exceeding two hundred thousand dollars but not 1012002
exceeding one million dollars, for a period not s. 9 (b).
exceeding six months;

(c) exceeding one million dollars, for a period not 10,2002
exceeding twelve months. s. 9 (b).

(5) Where an offence under this Act committed by a
body corporate is proved-

(a) to have been committed with the consent or
connivance of any director, manager, secretary or
other similar offisers of the body corporate or any
person who was purporting to act in that capacity; or

(6) to be attributable to the failure of any such director,
manager, secretary or other officer or person to
exercise all such reasonable diligence as he ought in
the circumstances to have exercised to prevent the
offence, having regard to the nature of his functions
and all the circumstances,

such director, manager, secretary or other officer or person as
aforesaid,as well as the body corporate shall be guilty of that
offence and shall be liable to be proceeded against and punished
accordingly.

(6) For the purposes of this section, a person shall be
deemed to be a director of a body corporate if he occupies in
relation thereto the position of a director, by whatever name
called, or is a person in accordance with whose directions or
instructions (not being 'directions or instructions in a
professional capacity only) the directors and the body corporate
or any of them act.

42A.--(I) This section shall apply to an offence specified in P d i e s .
the FiQl Schedule. 10/2002 S. 10.

Fitth
Schetfule

[The inclusion of this page is authorized by L.N. %812003]

FINANCIAL INSTITUTIONS

(2) The Supervisor may give to any person which he
has reason to believe has committed an offence to which this
section applies, a notice in writing in the prescribed form
offering that person the opportunity to discharge any liability to
conviction of that offence by payment of a fixed penalty under
this section.

(3) No person shall be liable to be convicted of the
offence if the fixed penalty is paid in accordance with this
section and the requirement in respect of which the offence was
committed is complied with before the expiration of the fifteen
days following the date of the notice referred to in subsection (2)
or such longer period (if any) as may be specified in that notice
or before the date on which proceedings are begun, whichever
event last occurs.

(4) Where a person is given notice under this section in
respect of an offence, proceedings shall not be taken against the
person for that offence until the end of the fifteen days following
the date of the notice or such longer period (if any) as may have
been specified therein.

(5) In subsections (3) and (4) "proceedings" means any
criminal proceedings in respect of the act or omission
constituting the offence specified in the notice under subsection
(2) and "convicted shall be construed in like manner.

(6) Payment of a fixed penalty under this section shall
be made to the Collector of Taxes specified pursuant to
subsection (7); and in any proceedings a certificate that payment
of a fixed penalty was or was not made to the Collector of Taxes
by a date specified in the certificate shall, if the certificate
purports to be signed by the Collector of Taxes, be admissible as
evidence of the facts stated therein.

(7) A notice under subsection (2) shall-
(a) specify the offence alleged;
(b) give such particulars of the offence as are necessary

for giving reasonable information of the allegation,

(c) s t a t e

[The i ~ i c l ~ ~ s ~ o ~ ~ of this page is authorized by L.N. 88/2003]

FINANCIAL INSTITUTIONS

(i) the period (whether fifteen days or a longer
period) during which, by virtue of
subsection (4), proceedings will not be
taken for the offence; and

(ii) the amount of the fixed penalty and the
Collector of Taxes to whom and the address
at which it may be paid.

(8) The fixed penalty for the offences specified in the
Fifth Schedule shall be the penalty specified therein in relation Fifth
to such offences. Schedule.

(9) In any proceedings for an offence to which this
section applies, no reference shall be made after the conviction
of the accused to the giving of any notice under this section or to
the payment or non-payment of a fixed penalty thereunder
unless in the course of the proceedings or in some document
which is before the court in connection with the proceedings,
reference has been made by or on behalf of the accused to the
giving of such a notice, or, as the case may be, to such payment.

(10) The Minister may, by order, make provision as to
any matter incidental to the operation of this section, and in
particular, any such order may-

(a) prescribe
(i) the form of notice under subsection (Z), and

the Collector of Taxes to whom a fixed
penalty is payable;

(ii) the nature of the information to be
fbrnished to the Collector of Taxes along
with any payment;

(iii) the arrangements for the Collector of Taxes
to fbmish to the Supervisor, information
with regard to any payment pursuant to a
notice under this section;

(6) amend the Fifth Schedule.

(1 1) An order made under subsection (10) (b) shall be
subject to affirmative resolution.

[The ~nclusmn of this page i s authorized by L.N 88120031

38 FINANCL4L INSTITUTIONS

Publication of
orders.

Secreq of
licensee
officials.

Fourth
Schedule.

Transitional.

43. Every order made by the Minister under this Act shall be
published in the Gazette.

44.-41) Subject to subsection (2), no official of any licensee
and no person who by reason of his capacity or office has by any
means access to the records of the licensee, or any registers,
correspondence or material with regard to the account of any
customer of that licensee shall, while his employment in or, as
the case may be, his professional relationship with the licensee
continues or after the termination thereof, give, divulge or reveal
any information regarding the money or other relevant
particulars of the account of that customer.

(2) Subsection (1) shall not apply in any of the
circumstances specified in the Fourth Schedule.

(3) Any person who contravenes subsection (1) shall
be guilty of an offence.

45.-41) In this section "the repealed Act" means the
Protection of Depositors Act in force immediately prior to the
3 1 st December, 1992.

(2) Any company which, immediately prior to the 3 1 st
December, 1992, was licensed as a licensee under the repealed
Act (hereinafter referred to as an existing licensee) shall, subject
to the provisions of this Act, be deemed to be licensed under
section 4 of this Act, as if that section were in force at the date
on which any such licence was granted.

(3) Any existing licensee which, before the 3 1st
December, 1992, has entered into any transaction incompatible
with the provisions of section 13 (prohibited business) shall,
within four weeks after the date of commencement, submit to
the Bank of Jamaica, a statement giving particulars of all such
transactions as are still in operation at that date and shall submit
a programme to the Bank of Jamaica for the operation of each
such transaction after the date or, as the case may be, for the
liquidation of each such transaction within such period as may
be agreed between the licensee and the Bank of Jamaica, or, in

[The inclusion of this pap is authorized by L.N. 88/2003]

FINANCIAL INSTITUTIONS

default of agreement, as may be determined by the Bank of
Jamaica.

(4) The provisions of section 6 (minimum capital
requirements) shall apply to an existing licensee subject to the
modification that the licensee shall increase its capital
requirements to the amount specified on the basis of a scheme
approved by the Bank of Jamaica, the period of which shall
expire not later than three years after the 3 1st December, 1992.

(5) Where prior to the 3 1 st December, 1992, a licensee
had issued subordinated debentures with the approval of the
Minister and was permitted to treat such debentures as capital in
the calculation of its permissible total of deposit liabilities such
licensee shall not be precluded from continuing to so treat the
said debentures until the date of maturity of such debentures.

(6) For the purposes of paragraph (b) of the definition 27,1997
of "capital base" in section 2 (I), the subordinated debentures S.17.
which may be included in the calculation of a licensee's capital,
are those outstanding as at the 29th October, 1997.

[The inclusion of this page is authorized by L.N. 1 1 1/2005]

FINANCIAL, INSTITUTIONS

FIRST SCHEDULE (Section 11 (2) )
Banks, Licensees or other Financial Institutions to which

section 11 of the Act applies

Any bank, licensee or other financial institution whether in Jamaica or
elsewhere-

(a) which has been wound up by a court; or
(b) the licence of which has been revoked, unless such revocation was

consequent upon-

(i) the amalgamation of that bank, licensee or other financial
institution with any other bank, licensee or financial
institution: or

(ii) a voluntary winding-up of the bank, licensee or other
financial institution in compliance with section 32 of the
Act:

(c) which has been placed in receivership;

(4 which has entered into a composition with its creditors;
(e) whose business has been conducted imprudently or fraudulently;
V) which has failed to meet the solvency requirements prescribed by

law.

SECOND SCHEDULE (Section 25)
2711997 PART A
S. 18 (a). Conditions Subject to Remedial Action under section 25 (1) and (6)

1. The licensee has breached the provisions of its memorandum or articles
of association.

2. The licensee, a director or any person employed (either as agent or
otherwise) in the conduct of the business of the licensee-

(a) is engaging or is about to engage in an unsafe or unsound practice
in conducting the business of the licensee; or

1012002
S. 11 (a) (i).

(b) is contravening a Standard of Best Practice or has contravened-

(i) any provisions of this Act or any regulations made
hereunder;

(ii) any condition of the licence granted under section 4 in
respect of that licensee;

(iii) any provision of the Bank of Jamaica Act or any
regulations made under that Act; or

3812004 (iv) any provision of the Money Laundering Act or
S. 5 (a) (iii). regulations made thereunder or any other Act which

imposes obligations on a licensee.

[The inclusion of this page is authorized by L.N. 1 1 1120051

FINANCIAL INSTIT W N S

3. The licensee's capital base is less than the amount required by this Act
or any regulations made hereunder.

3. A dmctor or manager has ceased to be a fit and proper person in
accordance with section 3 (3) and the licensee has r e W or neglected to
take appropriate action.

5. A final judgment has been obtained agams* the licensee and has
remained unsatisfied for at least one month.

6. The licensee-
(0) has given false or misleadmg lnfonnation in its application for a

licence: or

(6) has continued to take deposits in violation of a direchon: or

(c) has p e n false statements concerning the affairs of the licensee;
or

(4 refuses or neglects to make returns or to produce books,
records or documents to an authorized officer; or

(e) refuses to pennit i n s w o n of the licensee by an authorized
officer.

7. The licensee has failed to commence the business of accepting deposits
within six months of the date of the granting of a licence or the coming into
effect of the Financial Institutions (Amendment) Act. 1997.

8. The licensee is contravening or has contravened any cease and desist
order or any directions issued by the Supervisor pursuant to this Act.

9. The value of the licensee's assets is substantially less than the amormt of
its liabilities.

10. The licensee has notified the Supenisor that it proposes to sumnder
its licence.

I I. The licensee has ceased to carry on the business of taking Qposts.

12. A receiver has been appointed in respect of the licensee.

PART B [Deleted bvrlct 27 of l997j

PART C
Cease and Desist Orders

1. Before issuing a cease and desist order the Minister shall cause to be
s e n d on the licensee concerned a notice-

(a) containing a statement of the facts constituting the alleged unsafe
or unsound practice or the alleged contravention ad. where
appropriate. the name of the person against whom the akgathm is
made: and

(h) specifying a date (not being earlier than thirty nor later than
sixty days after the date of service of the notice) and a place
at which a hearing will be held to determine whether a cease
and desist order should be made.

2. If. at any time prior to the date of the hearing specified in the
notice under paragraph 1, the licensee concerned consents to the making
of a cease and desist order and the terms of the order, the hearing $hall be
waived and the order shall be made accordingly.

3. If at the hcaring-
(a) the licensee concerned is not represented, the licensee shall be

deemed to have accepted the allegations stated in the notice
referred to in paragraph 1 and to have consented to the making
of a cease and desist order and the Minister shall make a
cease and desist order in respect of that licensee; or

(h) the allegations specified in such notice are established in
relation to the licensee, the Minister shall make a cease and
desist order in respect of that licensee,

and a copy of the order shall be served on the licensee and where
appropriate, on the person named in the notice pursuant to paragraph 1 (a).

4. A cease and desist order shall-

(a) require the licensee concerned or the person concerned, as the
case may be, to cease and desist from the actions giving rise
to the order;

( h ) if made under paragraph 2, take effect as from such date
as may be specified therein;

(c) if made under paragraph 3, take effect from the date of senice
of the order or from such later date as may be specified therein.

5. Where in relation to any licensee-
(a) a notice has been served pursuant to paragraph 1; and
( 6 ) at any time prior to the holding of a hearing in accordance

with that paragraph the Minister is satisfied that the situation
giving rise to the notice is likely to endanger the f inand
position of the licensee or the interests of its customers,

the Minister may forthwith serve on that licensee and on any person
named in such notice, a temporary cease and desist order which shall
take effect as from the date of such service.

6. Where a temporary cease and desist order is served under para-
graph 5, the licensee or, as the case may be, the person on whom it is
served may, within ten days after the date of such service, apply to a
Judge of the Supreme Court in accordance with rules of court to set
aside, limit, or suspend the operation or enforcement of such order.

[The ~nclus~on f t h ~ s page 1s autliortzed by L N 8812003]

FINANCIAL INSTITUTIONS

PART D
Temporary Management of a Licensee

1 . 4 1 ) For the purposes of section 25 (6A), the Supervisor shall serve on 1012002
the licensee concerned a notice, announcing his intention of temporarily S. 11 (b)(i),
managing the licensee from such date and time as may be specified in the
notice.

(2) The Supervisor may appoint any person to manage on his behalf 10~2002
any licensee specified in the notice under sub-paragraph (1); s. I ~ ( b ) .

(3) A copy of the notice referred to in sub-pwdgraph (1) shall be sent
to the Registrar of the Supreme Court and shall be posted in a conspicuous
position at each place of business of the licensee and shall be published in a
newspaper printed and circulated in Jamaica.

(4) Upon the date and time specified in the notice referred to in sub-
paragraph (I), there shall vest in the Supervisor full and exclusive powers of lo/2oo2
management and control of the licensee, including, without prejudice to the s. 11
genemlity of the foregoing, power to-

(a) continue or discontinue its operations;
(h) stop or limit the payment of its obligations;
(c) employ any necessary officers or employees;
(4 execute any instrument in the name of the licensee; and
(e) initiate, defend and conduct in the name of the licensee, any action

or proceedings to which the licensee may be a party..

(5) Subject to sub-paragraph @A), not later than sixty days after the 10,2002
Supervisor has assumed temporary management of the licensee he shall apply s. 11 (b)(i)(ii),
to the Court (furnishing full particulars of the assets and liabilities of the
licensee) for an order confirming the vesting in the Supervisor of full
exclusive powers of management of the licensee as described ,in sub-
paragraph (4).

(5A) An application under sub-paragraph (5) shall be made by the 10i2002
Attorney General. s.11 (b)(iii),

(6) All expenses of and incidental to the temporary management of a
licensee shall be paid by such licensee in such manner as the Supervisor may , 2ooz
determine. s. 11 @)(I).

2.-(1) A licensee whch is served with a notice under paragraph 1 may.
within ten days after the date of such service. appeal to the Court of Appeal
and that Court may make such order as it thinks fit.

[The inclusion of this page is authorized by L.N. 180A120061

F'INANCIAL INSTITUTIONS

(2) The Court of Appeal may, on sufficient cause being shown, extend
the period referred to in sub-paragraph (1).

1012002 (3) The Supervisor may, if he considers it to be in the best interests of

s. 11 (bxi). the depositors of a licensee which is being temporarily managed by him,
apply to the Court for an order staying-

(a) the commencement or continuance of any proceedings by or
against the licensee, for such period as the Court thinks fit; or

(b) any execution against the property of the licensee.

10/2302 3. Where the Supervisor has served notice on a licensee under paragraph
s. I 1 (bxi). 1, he shall within sixty days from the date specified in such notice or within

such longer period as a Judge of the Supreme Court may allow-

(a) restore the licensee to its board of directors or owners as the case
may be; or

(b) present a petition to the Court under the Companies Act for the
windmg up of the licensee; or

(c) propose a compromise or arrangement between the licensee and its
creditors under section 206 of the Companies Act or a
reconstruction under section 208 of that Act.

PART E
Suspension or Revocation of Licence

1. Before suspending or revoking a licence the Minister shall consult with
the Bank of Jamaica and give the licensee concerned notice in writing of his
intention so to do, specifying the reasons therefor and indicating a period (not
less than thuty days) within which the licensee may submit to him a written
statement of objections or may make representations by oral submissions
(with or without the assistance of counsel).

2. As soon as convenient after the receipt by the Minister of the written
statement or oral submissions aforesaid or after the expiration of the period
specified in the notice, whichever first occurs, the Minister shall advise the
licensee of his decision by instrument in writing.

3. Where a licensee has been notified of the suspension or revocation of
its licence it may, within ten days after the date of such notification, appeal to
the Court of Appeal and that Court may make such order as it thinks fit.

[The lncluslon of thia page Is authorized by L.N. 180A12006)

FINANCIAL INSTITUTIONS

THIRD SCHEDULE (Section 42)
Offences and Penalties

First Column Second Column

Brief Description of Relevant
offences Section -

Carrying on deposit taking 3 (1)
business without licence.

Obstructing or hindering an 3 (4)
authorized officer in the
performance of his duties.

Incurring deposit liabilities in 9 (3)
excess of prescribed amount.

Acting in a managerial 11 (3)
capacity in a licensee while
debarred.

Permitting persons debarred 11 (4)
from management of licensee
to be involved with the
management of licensee.

Accepting or repaying 12 (2)
demand or short term deposit.

Penalty -
On conviction, a fine not exceeding
$2,000,000.00 and in the case of a
continuing offence, a further
penalty not exceeding $200,000.00
for each day during which the
offence continues after conviction.

On conviction, a fine not exceeding
$500,000.00 and in the case of a
continuing offence, a further
penalty not exceeding $50,000.00
for each day during which the
offence continues after conviction.

On conviction, a fine not exceeding
$1,000,000.00 and in the case of a
continuing offence, a further
penalty not exceeding $100,000.00
for each day during which the
offence continues after conviction.

On conviction, a fine not exceeding
$500,000.00.

On conviction, a fine not exceeding
$1,000,000.00 and in the case of a
continuing offence, a further
penalty not exceeding $100,000.00
for each day during which the
offence continues after conviction.

On conviction, a fine not exceeding
$200,000.00 and in the case of a
continuing offence, a further
penalty not exceeding $100,000.00
for each day during which the
offence continues after conviction.

[The inclusion of this page is authorized by L.N. 11112005]

FINANCIAL INSTITUTIONS

THlRD SCHEDULE, contd.

First Column Second Column

2711997
S. 19 (a).

2711997
S. 19 (a).

Brief Description of Relevant
Offences Section Penalty

- -
Engaging in prohibited 13 (9) On conviction, a fine not exceeding
business. $1,000,000.00 and in the case of a

continuing offence, a further
penalty not exceeding $250,000.00
for each day during which the
offence continues after conviction.

Failure to make returns or 16 (4) On conviction, a fine not exceeding
furnish information. $250,000.00 for each day during

which the failure continues after the
expiry of the time prescribed for
making the return or furnishing the
information.

Failure to submit or exhibit 18 (3) On conviction, a fine not exceeding
or publish last audited $250,000.00.
balance sheet and profit and
loss account.

Failure to provide con- 19 (5) On conviction, a fine not exceeding
solidated balance sheet and $250,000.00.
profit and loss acwunt.

Failure to make report to 19A (2) On conviction, a fine not exceeding
Supervisor. $2,000,000.00 or to imprisonment

for a term not exceeding six months
or to both such fine and
imprisonment.

Failure to comply with 19B (3) On conviction, a fine not exceeding
requirement of Supervisor for $2,000,000.00 or to imprisonment
audit or examination. for a term not exceeding six months

or to both such fine and
imprisonment.

Failure of shareholder to 22 (2) On conviction, a fine not exceeding
provide information to $1,000,000.00 or to imprisonment
Minister. for a term not exceeding two years

or to both such fine and
imprisonment.

[The inclusion of this page is authorized by L.N. 111/2005]

FINANCIAL INSTITUTIONS

THIRD SCHEDULE, contd.

First Column Second Column

Brief Description of Relevant
Offences Section

Failure to comply with a
direction or cease and desist
order.

Being manager of a licensee
failing to provide information
on the financial position of
the licensee or its branches or
subsidiaries.

Failure to comply with
request of Supervisory
Department for information.

Refusal to furnish in-
formation or obey summons.

Failure to comply with
direction.

Failure to comply with
summons of Bank of Jamaica
or with requirements of
authorized officers or
obstructing or misleading
them.

Failure to notify the Bank of
Jamaica of a resolution for
voluntary winding-up.

Penalty -

25 (4) On conviction, a fine not exceeding 3812004
$200,000.00 and, in the case of a S. 6(c).
continuing offence, a further
penalty not exceeding $20,000.00
for each day during which the
offence continues after conviction.

27 (1) On conviction, a fine not exceeding
$1,000,000.00 or to imprisonment 2711997
for a term not exceeding six months S. l9 (b)(x).
or to both such fine and
imprisonment.

29B (3) On conviction, a fine not exceeding 2711997
$2,000,000.00 or to imprisonment S. 19 (a).
for a term not exceeding six months
or to both such fine and
imprisonment.

29C (4) On conviction, to a fine not 1012002
exceeding $250,000.00. S. 12.

29D (3)
29F (3) On conviction, to a fine not 1012002

exceeding $2,000,000.00. S. 12.

30 (2) On conviction, a fine not exceeding
$1,000,000.00 or to imprisonment 2711997
for a term not exceeding six months S. 19(b)(xi).
or to both such fine and
imprisonment.

32 (4) On conviction, a fine not exceeding
$1,000,000.00. 2711997

S. 19(b)(xii).

[The inclusion of this page is authorized by L.N. 1 1 1/2005]

FINANCIAL INSTITUTIONS

THIRD SCHEDULE, contd.

First Column

Brief Description of
Offences

Furnishing false informa-
tion in any statement,
agreement, deed or decla-
ration in relation to amal-
gamation or transfer of
licensee.

Fraudulently inducing per-
sons to invest.

Being an official of a
licensee, making unautho-
rized disclosure.

Relevant
Section

Second Column

Penalty -
34 (2) On conviction-

(a) on indictment in a Cir-
cuit Court, to a fine or
imprisonment of a term
not exceeding two years
or to both such fine and
imprisonment;

(b) on summary conviction
before a Resident
Magistrate, to imprison-
ment for a term not
exceeding twelve months
or to a fine not
exceeding $1,000,000.00
or to both such fine and
imprisonment.

41 On conviction on indictment in a
Circuit Court, to imprisonment for a
term not exceeding two years or to
a fine or to both such fine and im-
prisonment.

44 (3) On conviction, a fine not exceeding
$2,000,000.00 or to ,imprisonment
for a term not exceeding two years
or to both such fine and impri-
sonment.

FOURTH SCHEDULE (Section 44 (2) )

Circumstances in which information on customers'
accounts may be disclosed

Section 44 (1) shall not apply in any case where-

(a) the information is disclosed by an official or a person referred to.in
that subsection to another official or person so referred to;

[The inclusion of this page is authorized by L.N. 11 112005]

FINANCIAL INSTITUTIONS

FOURTH SCHEDULE, contd.

the customer or his personal representative gives written permission
for disclosure of the information;

the customer is an undischarged bankrupt or, if the customer is a
company, it is being wound up;

the information is disclosed in connection with civil proceeding*

(i) arising between the licensee and the customer
relating to the customer's transaction with the
licensee; or

(ii) brought by the licensee by way of interpleader in
connection with competing claims by two or more
parties to money in the customer's account;

the information is disclosed to an authorized officer;

the disclosure is made on the written direction of the Minister to the
police or to a public officer who is duly authorized under the
provisions of any law for the time being in force which requires
such disclosure for the purpose of the investigation or prosecution of
a criminal offence;

the licensee has been served with a court order attaching money in
the account of the customer;

the information disclosed is required by the head office overseas of
a licensee and pertains only to credit granted by the Jamaican
operations of that licensee;

the Minister in writing directs such disclosure to a foreign
government or agency of such government where there exists
between Jamaica and such foreign government an agreement for the
mutual exchange of information of such kind and the Minister
considers it in the public interest that such disclosure be made;

on the recommendation of the Supervisor, the Minister in writing 1012002
directs such disclosure in the public interest; s. 13 (b).

the circumstances are such that it is in the interests of the licensee 1012002
that the information be disclosed; s. 13 (b).

disclosure is reauired under another enactment: 1012002
S. 13 (b).

disclosure is required by virtue of an order of the court, other than 1012002
an order under paragraph (g). S. 13 (b).

- -

[The inclusion of this page is authorized by L.N. 1 1112005]

70 FINANCIAL INSTITUTIONS

FIFTH SCHEDULE (Section 42A)

1012002 Oflences in respect of which liability to conviction may be discharged by
s. 14. payment of ajixedpenalty

Nature of Offence Section -
Incurring deposit in excess 9 (3)
of statutory limit.

Penalty -

Acting or continuing to act 11 (3) $300,000.00
as director or concerned in
management without ex-
press authorization.

3812004 Failure to make returns.
S. 7 (a).

16 (4)

Failure to submit, exhibit, 18 (3)
publish last audited balance
sheet and profit and loss
account.

Failure to provide con- 19 (5)
solidated balance sheet and
profit and loss account for

3812004 licensee and subsidiaries.
S. 7 (b).

Breach of duty of auditor 19B (3)
to carry out expanded audit
as directed by Supervisor.

Failure of shareholder to 22 (2)
comply with notice issued
by Minister.

$150,000.00 for
each day of default

[The inclusion of this page is authorized by L.N. 11 1/2005]