Chapter

Bahamas

Author(s):
International Monetary Fund
Published Date:
June 1985
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Downtown Nassau from water tower

Courtesy Bahamas Tourist Office

Financial System of the Bahamas

Introduction

The Bahamas emerged as an international financial center during the 1960s, as foreign financial institutions established branches and subsidiaries in Nassau to handle transactions in the growing Eurodollar market. A number of factors have contributed to the success of the Bahamas in this field. These include (1) its tax-haven status (no income, capital gains, succession taxes, or associated withholding); (2) the commitment to secrecy which has been effectively enforced by the financial institutions and the Bahamian authorities; (3) preservation of an open economy and financial and political stability; (4) a well-developed communications system; and (5) the Bahamas’ location in the same time zone as New York.

The evolution of the financial system has, to a large extent, been paralleled by legislation designed to give the authorities a greater degree of control over money and credit developments affecting the Bahamas. This is particularly evident in the three major legislative changes culminating in the 1974 law establishing the Central Bank of the Bahamas.

The Currency Board

As in many former British colonies, the issuance of notes and coins was made the sole prerogative of a currency board, established under the Currency Board Act of 1919. The main principle underlying the operations of such boards was the requirement that the local currency be exchanged on demand for sterling in London, and vice versa, at a fixed rate of exchange between the two currencies that was embodied in the enabling legislation.

The Bahamas Currency Board began its operations in 1921, issuing and redeeming notes against sterling. To ensure convertibility on demand, the Board maintained a sterling asset cover for the note issue in a Currency Note Fund consisting of about one third in gold and silver coins and two thirds in sterling-denominated obligations of the United Kingdom and other sterling area countries, principally those in Africa. The Currency Note Fund could not fall below 100 per cent of the note issue, as any depreciation in the value of its assets, which could not include local assets, had by law to be met from the General Revenue of the Bahamas. The expenses of the Board were met from the Currency Note Income Account, while any surplus in this Account at the end of the year was transferred to the General Revenue, subject to the decision of the U.K. Secretary of State for Foreign and Commonwealth Affairs.

The Currency Board Act of 1919 was superseded by the Currency Board Act of 1965, which maintained all the essential features of currency boards. However, a significant new clause that had important monetary implications provided that the external backing of the local currency issue could be reduced from 100 per cent to 50 per cent. The remaining 50 per cent could be held in securities issued by the Government of the Bahamas. This provision for a fiduciary issue, coming as it did in 1965, was several years behind the analogous development in some other British colonies.

The Currency Board Act of 1965 provided for the decimalization of the Bahamian currency as well as for a change in its designation from the Bahamian pound to the Bahamian dollar. The currency retained its statutory link to sterling at a parity of 1 Bahamian dollar to 7 shillings sterling. Inasmuch as the par values of sterling and the U.S. dollar were based on gold under the Articles of Agreement of the International Monetary Fund, the Bahamian dollar also had a fixed relationship with the dollar (as well as with the currencies of other members of the Fund that maintained a par value). Exchange rates fluctuated within permissible margins.

Because of the statutory link to sterling, the Bahamian dollar was devalued automatically and to the same extent when the pound sterling was devalued on November 18, 1967. However, the Bahamian Government decided on November 25, by the Currency (Amendment) Act of 1967, to express the par value of the Bahamian dollar directly in terms of gold and to restore the former relationship between the Bahamian dollar and the U.S. dollar with retroactive effect from the moment of the devaluation of the pound sterling. In December 1971, when it was agreed that the U.S. dollar would be devalued by 7.89 per cent in relation to gold under the Smithsonian Agreement, the Bahamian dollar was devalued by a lesser percentage so that B$0.97 was equivalent to US$1. Experience with a premium of about 3 per cent of the Bahamian dollar against the U.S. dollar indicated that such a differential had many commercial and psychological disadvantages. When, therefore, the U.S. dollar was again devalued by 10 per cent in relation to gold in 1973, the Bahamian Government re-established the former relationship of B$1.00 = US$1.00.

At present the Bahamian dollar is pegged to the U.S. dollar, the intervention currency, at B$1 per US$1.00. The official buying and selling rates for the U.S. dollar are B$ 1.0025 and B$ 1.004, respectively, per US$1.00. Buying and selling rates for the pound sterling are also officially quoted, with the buying rate for the pound sterling based on the New York market mid-rate, and the selling rate 0.5 per cent above the buying rate. A stamp tax of 7 cents is applied to all outward remittances where the amount is B$30 or under. A further tax of 7 cents is levied on every additional B$30 or fraction thereof.

There is also a market in which “investment currency” may be negotiated between residents through the intermediacy of an investment currency dealer at freely determined rates, usually attracting a premium over the official market rate.

Bahamas Monetary Authority

The realization that sterling and the dollar were not inextricably linked came at a time when somewhat more than 50 per cent of the Bahamian dollar deposit liabilities were covered by assets held abroad, mostly in sterling. This proved a costly way to emphasize the need for additional Bahamian dollar assets and, as far as the banks were concerned, the development of additional local assets was perhaps the most practical contribution that a monetary authority could make. Although the Currency Act of 1965 provided for a fiduciary issue, little use was made of that authority. It became increasingly evident that closer control over the financial system was essential. Accordingly, the Bahamas Monetary Authority was established under the Monetary Authority Act of 1968 and started operations in November of that year.

In addition to the issue and redemption of currency, the Monetary Authority was empowered to supervise banks and trust companies operating within the country and to administer exchange controls on behalf of the Government. The Authority was also enjoined to foster close relations between the banks themselves and between the banks and the Government, to advise the Government on banking and monetary matters and, in general, to perform such activities as might be necessary to fulfill these objectives. The Authority was fully owned by the Government with general administration and the formulation of policy the responsibility of a Board of Directors.

In both timing and objectives, the Monetary Authority was a way station between the Currency Board and a central bank. The traditional central bank’s tools of monetary policy were outside its scope. However, its powers in respect of transactions in treasury bills removed it from a purely passive status.

The Monetary Authority was empowered to sell and rediscount domestic treasury bills, foreign bills of exchange, and treasury bills. It could also grant loans and advances to banks for fixed periods not exceeding six months on the security of specified assets. Nevertheless, the volume of its rediscounting remained small and no loans against treasury bills were ever made.

Although the Monetary Authority was not authorized to impose reserve requirements, it was able to enter into an agreement with the commercial banks on June 1, 1971 under which they undertook to maintain on average in the form of till cash or balances with the Authority the equivalent of not less than 5½ per cent of their Bahamian dollar deposit liabilities. At least 1 percentage point of this was to be held as deposit balances with the Authority. This pool of balances formed the basis of the new clearing system.

Central Bank of the Bahamas

The third stage of monetary development began with the establishment of the Central Bank of the Bahamas. The enabling legislation, the Central Bank of the Bahamas Act, was passed on February 6, 1974, approved by the Senate on February 15, and agreed by the Governor-General on April 2, 1974. On June 1, 1974 the Central Bank commenced operation.

The Central Bank of the Bahamas Act, 1974 benefited not only from the experiences of older central banks but also from that of the Bahamas Monetary Authority which it superseded. The Act itself contains the usual provisions regarding the establishment and functions of the Bank, capital and reserves, the issuance and redemption of currency, and foreign exchange and external reserves. The major policy tools available to the Central Bank, covered in secs. 19–22 and secs. 24–27, are summarized below.

Reserve requirements

As has already been noted, the commercial banks were not initially required to maintain any given ratio of cash or balances with the Monetary Authority, but, starting in June 1971, the seven clearing banks agreed to maintain on average in the form of cash or in balances with the Monetary Authority the equivalent of at least 5½ per cent of their total Bahamian dollar deposits and, within this percentage, to hold the equivalent of at least 1 per cent of total Bahamian dollar deposits in their accounts with the Authority.

By way of comparison, the Central Bank is empowered to fix and alter the percentage of deposit liabilities in Bahamian dollars that commercial banks must hold in cash or deposits (statutory reserve requirement) and in specified liquid assets (liquid asset reserve requirement). The Bank is authorized to vary the statutory reserve ratio between 5 per cent and 20 per cent, and to vary the liquid asset ratio between 10 per cent and 30 per cent; increases in these ratios may not exceed 5 percentage points in any period of 30 days. There is no express provision for marginal reserve requirements. The Central Bank also has the authority to establish the ratio of liquid assets held by commercial banks to their deposit liability in Bahamian dollars. This ratio may be varied within a range of 10 to 30 per cent. As in the case of the cash reserve ratio, any increase may not exceed 5 percentage points in any 30-day period. Liquid assets are defined to include, inter alia, money at call and demand balances held domestically, or abroad if in freely convertible currency. The provision is drafted to prevent the circumvention of the liquid asset requirements through the maintenance of reciprocal balances in the Bahamas. The penalty for a cash reserve deficiency is a fine not exceeding 1/10 of 1 per cent of the amount of the deficiency for each day of noncompliance. Moreover, any commercial bank that does not keep with the Central Bank the required proportion of the statutory reserve or that fails to comply with the liquid reserve requirement is liable to a fine not exceeding B$ 1,500 for every day of noncompliance.

As of July 1, 1974 commercial banks were also instructed to maintain a liquid assets ratio of 20 per cent against demand deposits and 15 per cent against time and savings deposits. Liquid assets were defined as Bahamian notes and coins, balances with the Central Bank, net call and demand balances with other financial institutions in the Bahamas, treasury bills and other government securities, and net foreign assets (including foreign currency). The sum of these liquid assets held by the banks on March 31, 1974 was about 15 per cent above the ratio prescribed subsequent to that date.

The Bank issued a directive establishing as of July 1, 1974 a statutory reserve ratio of 5 per cent and limiting the amount of cash in till that may serve to fulfill the statutory reserve requirement to the equivalent of 1 per cent of deposit liabilities.

Credit control

While the Monetary Authority had no powers in the area of credit control, the Central Bank may prescribe the maximum amounts of loans or advances that commercial banks may have outstanding, their purpose and maturity, and the security on which they are granted. The coverage of these requirements may be general or applicable to individual banks or specific types of loans and advances. However, the regulations in question may not go into effect earlier than 30 days after the date of their public announcement. The Bank has not yet issued any directives to the commercial banks in this respect.

Rediscounts, loans, and advances

The Monetary Authority indicated its readiness from April 1971 to sell treasury bills from its portfolio, to rediscount bills for banks before maturity, and to lend for a minimum of several days against the collateral of treasury bills. Rediscounting operations took place at a rate ½ percentage point higher than the discount rate on the treasury bill issue of the particular month, except when the resulting rediscount rate was lower than the interbank lending rate. However, as previously noted, the volume of rediscounting was generally small and no loans were made against treasury bills. The Central Bank is authorized to sell and rediscount treasury bills and bills of exchange, promissory notes, or other credit instruments maturing within 180 days from the date of their acquisition by the Bank. It may also make loans and advances to any commercial bank with a maturity not to exceed 93 days on the security of a wide variety of documents.

Transactions with Government

The Central Bank, unlike the Monetary Authority may make temporary advances to the Government. However, the total outstanding amount of advances may not exceed 10 per cent of either an historic annual average of ordinary revenue of the Government or that percentage of the ordinary revenue laid before Parliament in the estimates for the current fiscal year, whichever of the two is lower. For this purpose the historic annual average applies to the last 3 fiscal years for which the Government’s accounts have been published, and ordinary revenue means all receipts other than loan proceeds, capital grants, and other receipts on capital account. The Central Bank may also purchase, hold, and sell treasury bills and publicly issued government and government-guaranteed securities maturing within 20 years from the date of their acquisition. However, the total amount of these longer-term securities (including those held as security for any loans and advances) should not exceed the equivalent of 20 per cent of the demand liabilities of the Bank.

Financial Intermediaries

The rapid expansion in the number of commercial banks and trust companies during the early 1960s prompted the Bahamian Government to enact the Banks and Trust Companies Regulation Act in 1965. Prior to that law, commercial banks were required to obtain licenses under the Banks Act of 1909, while there were no license requirements for trust companies.

Under the Banks and Trust Companies Regulation Act, 1965, all commercial banks and trust companies must be licensed. Prescribed information and references must be submitted with applications for a license to the Minister of Finance. As a revenue measure, the law was amended in 1969 (Banks and Trust Companies (Amendment) Regulation) to provide for a licensing fee, the amount of which varies with the nature of the license. Provision is made for the issuance of several types of licenses.

There are no express statutory capital requirements. It is understood that in considering an application for a license the external affiliation of the applicant, to a large extent, determines the capitalization deemed necessary by the authorities.

The number of banks and trust companies licensed in the Bahamas rose from 37 in 1963 to 323 in 1973, and subsequently increased to 331 by December 1981. A majority of the financial institutions are licensed to deal with the general public although they must abide by special limitations concerning transactions with residents of the Bahamas. Some institutions are licensed to carry out activities limited to certain parties or are restricted to specific types of transactions. Others, registered as non-active, are in liquidation or serve to prevent the use of a trade name by competitors. Of the 331 institutions licensed under the Banks and Trust Companies Regulation Act of 1965, 94 are nonactive or restricted to transactions with persons specified in the license.

Included among the 237 institutions licensed to deal with the general public are 124 branches of foreign banks operating as accounting centers for Euromarket operations initiated by their head offices or other branches. All these branches are nonresident for the purpose of exchange control. They are believed to account for a substantial amount of the offshore financial transactions channeled through the Bahamas. In this connection, it should be noted that while a substantial volume of transactions is recorded as occurring in the Bahamas, many of the offshore banks and trust companies have a very limited staff. Some even share a manager—whose responsibility is often limited to bookkeeping. Tax and other advantages are said to provide the main incentive for booking transactions through the Bahamas.

The remaining 113 banks and trust companies are incorporated in the Bahamas. Only 11 of these are allowed to operate in both domestic and foreign currencies. As authorized dealers in gold and foreign exchange, their transactions with residents are still subject to the limitations established by the exchange control regulations. Of the 11 authorized dealers, 7 are clearing banks. There are also 7 trust companies licensed as authorized agents that can act as custodians and dealers in foreign securities. In addition to providing regular domestic banking services, the authorized dealers and agents (which are all branches or subsidiaries of foreign banks) also operate in the Euromarket.

Of the 95 institutions that are not authorized dealers, 66 are subsidiaries of banks based outside the Bahamas and the rest are Bahamian-based banks and trust companies. Many of these institutions also operate in the Euromarket, but the volume of their operations is not known.

The Banks and Trust Companies Regulation Act, 1965 provides for an inspector (formerly the Permanent Secretary in the Ministry of Finance but, since 1974, the Central Bank) to carry out inspections of banks and trust companies when deemed expedient. The extent to which such inspections can be effected is circumscribed by a secrecy provision that has been regarded as one of the important contributory factors in the status of the Bahamas as an international financial center.

In recent years there have been a number of bank failures in the Bahamas. These failures fortunately have been limited to relatively small banks. Consideration has been given to tightening the requirements for licensing and to increasing the rigor of inspection. The dilemma which the authorities face, however, is that steps along these lines may be regarded as infringements upon the freedom of activities and the well-publicized attendant secrecy of transactions that have led to the successful proliferation of banking business in the Bahamas.

The Central Bank of the Bahamas Act, 1974 1

An Act to provide for the establishment of a Central Bank; to repeal The Bahamas Monetary Authority Act, 1968; and for connected purposes.

[Assented to 2nd April, 1974]

Be it enacted by The Queen’s Most Excellent Majesty, by and with the advice and consent of the Senate and the House of Assembly of the Commonwealth of The Bahamas, and by the authority of the same, as follows:—

Part I. Preliminary

Short title and commencement.

1.—(1) This Act may be cited as The Central Bank of The Bahamas Act, 1974, and, subject to subsection (2), the provisions thereof shall come into operation on such date or dates as the Governor-General may by notice published in the Gazette appoint for those provisions or any of them, and different dates may be so appointed for different purposes of those provisions.

(2) This section, section 2 and section 41 shall come into operation on the pass of this Act.

Interpretation.

2.—(1) In this Act unless the context otherwise requires—

  • “Authority” means the Bahamas Monetary Authority established by The Bahamas Monetary Authority Act, 1968;
  • “Bank” means the Central Bank of The Bahamas established by section 3:
  • “bank” means a financial institution lawfully carrying on banking business including the accepting of deposits of money withdrawable by cheque;
  • “banking business” means the business of accepting deposits of money which may be withdrawn or repaid on demand or after a fixed period or after notice, and employing those deposits in whole or in part by lending or otherwise investing them for the account and at the risk of the person accepting them; and “banker” shall be construed accordingly;
  • “Board” means the Board of Directors of the Bank provided for by subsection (4) of section 3;
  • “coins” means coins of the currency of The Bahamas; “commercial bank” means a bank licensed to carry on business in The Bahamas;
  • “company” means a company incorporated under any law in force whether in The Bahamas or elsewhere;
  • “director” means a member of the Board;
  • “financial institution” means an institution carrying on banking business;
  • “Financial Secretary” means the Financial Secretary of The Bahamas;
  • “Government” means the Government of The Bahamas;
  • “Minister” means the Minister of Finance;
  • “notes” means notes of the currency of The Bahamas;
  • “public corporation” means a body corporate established directly by statute for public purposes;
  • “securities” means shares, stocks, bonds, debentures or debenture stock;
  • “trust business” means the business of acting as trustee or executor and administrator;
  • “trust company” means a company carrying on trust business;
  • “year” means financial year of the Bank.

(2) Unless the contrary intention appears, references in this Act to a section are references to a section of this Act, and references in a section to a subsection are references to a subsection of that section.

Part II. Establishment and Functions of the Bank

The Central Bank of The Bahamas

3.—(1) There shall be a bank, to be called “the Central Bank of The Bahamas” (in this Act referred to as “the Bank”), having the functions assigned to it by the following provisions of this Act.

(2) The Bank shall be a body corporate having perpetual succession and a common seal and, subject to the provisions of this Act, with power to acquire, hold and dispose of movable and immovable property of whatever kind and to enter into contracts and to do all things necessary for the purpose of its functions.

(3) The Bank may sue and be sued in its corporate name and may for all purposes be described by that name.

(4) There shall be a Board of Directors of the Bank, who, subject to the provisions of this Act, shall be responsible for the policy of the Bank and shall manage its affairs and business.

First schedule.

(5) The provisions of the First Schedule shall have effect as to the Board of Directors and otherwise in relation to the Bank.

Places of business, etc.

4. The Bank shall have its principal place of business in the City of Nassau, and may in The Bahamas or elsewhere—

  • (a) establish and maintain such branch offices; and
  • (b) appoint such agents and correspondents, as the Bank thinks fit.

The Bank’s functions.

5.—(1) It shall be the duty of the Bank, subject to the provisions of this Act—

  • (a) to promote and maintain monetary stability and credit and balance of payments conditions conducive to the orderly development of the economy;
  • (b) in collaboration with the financial institutions, to promote and maintain adequate banking services and high standards of conduct and management therein;
  • (c) to advise the Minister on any matter of a financial or monetary nature referred by him to the Bank for its advice.

(2) The Bank shall, subject as aforesaid, have power to do anything, whether in The Bahamas or elsewhere, which is calculated to facilitate, or is incidental or conducive to, the discharge of its duty under subsection (1).

Part III. Capital and Reserves

Capital of the Bank.

6.—(1) The authorised capital of the Bank shall be three million dollars.

(2) Upon the establishment of the Bank there shall be transferred to the Bank from the Authority, in accordance with subsection (1) of section 40, the capital of the Authority as part of the capital of the Bank.

(3) Any capital required to make up the authorised capital of the Bank after taking into account the transfer provided for by subsection (2) shall be paid from the Consolidated Fund at such times and in such amounts as the Board, with the approval of the Minister, may determine.

General Reserve.

7.—(1) The Bank shall establish and maintain a General Reserve, to which, subject to the provisions of this section, at the end of each year the net profit of the Bank shall be credited (after the making of such deductions and allowances for other reserves and contingencies as the Bank may think fit) or the net loss incurred by the Bank debited, as the case may require.

(2) Whenever at the end of any year the amount in the General Reserve exceeds—

  • (a) twice the authorised capital of the Bank; or
  • (b) fifteen per centum of the demand liabilities of the Bank,

whichever is greater, then the amount of any such excess shall be paid over to the Consolidated Fund, unless the Minister otherwise determines.

Part IV. Currency

8.—(1) The currency of The Bahamas shall be the notes and coins issued by the Bank under the provisions of this Act.

Currency of The Bahamas.

(2) The unit of the said currency shall be the dollar, which shall be divided into one hundred cents.

Parity of the dollar.

9. The parity of the dollar shall be equivalent to 0.736662 grams of fine gold, so, however, that the Minister may, after consultation with the Bank, by order alter the said parity whether in terms of gold or any other standard.

Contracts, etc., deemed to be in bahamian currency.

10. Every contract, sale, payment, bill, note or security for money and every transaction, dealing, proceeding, matter or thing whatever relating to money or involving the payment of, or the liability to pay, money shall be deemed to be made, executed or entered into in or in relation to the currency of The Bahamas unless it is expressly made, executed or entered into in or in relation to the currency of some other country.

Sole right of Bank to issue notes and coins.

11.—(1) The Bank shall have the sole right and authority to issue notes and coins throughout The Bahamas.

(2) No person other than the Bank shall issue in The Bahamas notes or coins or any documents or tokens having the appearance of notes or coins.

(3) Any person who contravenes the provisions of subsection (2) shall be guilty of an offence against this Act and shall be liable on conviction thereof to a fine not exceeding one thousand dollars or to imprisonment for a term not exceeding twelve months.

Issue, etc., of notes and coins.

12. The Bank shall from time to time as circumstances may require—

  • (a) arrange for the printing of notes and the minting of coins; and
  • (b) issue, re-issue and redeem notes and coins.

Denominations and form of notes and coins.

13. The Minister may, after consultation with the Bank, by order prescribe—

  • (a) the denominations (being multiples or fractions of a dollar), forms and designs of the notes and coins; and
  • (b) the standard weight and composition of such coins, and the amount of tolerance and the variation which shall be allowed therein.

Legal tender.

14.—(1) Subject to the provisions of this section—

  • (a) notes issued by the Bank shall be legal tender in The Bahamas at their face value for the payment of any amount;
  • (b) coins issued by the Bank shall be legal tender in The Bahamas at their face value up to an amount not exceeding one hundred dollars in the case of coins of a denomination of not less than one dollar, and up to an amount not exceeding five dollars in the case of coins of a lesser denomination.

(2) All notes and coins lawfully in circulation immediately before the commencement of this section shall be deemed for all purposes to be notes and coins issued by the Bank under this Act and to be legal tender until withdrawn from circulation under the provisions of subsection (3).

(3) The Bank may, on giving not less than one month’s notice in the Gazette, call in any notes or coins on payment of the face value thereof, and any such notes or coins shall, on the expiration of the notice, cease to be legal tender but, subject to the provisions of section 15, shall be redeemable by the Bank on demand.

(4) A coin which has been impaired, diminished in size or lightened otherwise than by fair wear and tear, or which has been defaced by stamping, engraving or piercing shall not be legal tender.

Damaged currency, etc.

15. No person shall be entitled as of right to recover from the Bank the value of any lost, stolen, mutilated or imperfect note or coin; but the Bank may in its discretion as an act of grace refund to any person the value of any mutilated or imperfect note or coin.

Exemption from stamp duty.

16. Notes and coins issued by the Bank shall be exempt from the payment of stamp duty.

Part V. Gold, Foreign Exchange, External Reserve, etc.

Power of bank in relation to foreign exchange, etc.

17. Subject to the provisions of this Act, the Bank may—

  • (a) buy and sell gold, foreign exchange, foreign bills of exchange and securities of foreign governments;
  • (b) maintain deposits in any foreign financial institution and utilize any such deposit in such manner as the Bank may think expedient for the due performance of the functions of the Bank;
  • (c) make arrangements with any foreign financial institution to borrow, on such terms and conditions as the Bank may think fit, any foreign currency.

External reserve.

18.—(1) The Bank shall at all times maintain a reserve of external assets consisting of all or any of the following—

  • (a) gold (whether coins or bullion);
  • (b) notes and coins (other than gold coins);
  • (c) balances payable on demand held with financial institutions or agents;
  • (d) money at call;
  • (e) bills in the nature of Treasury Bills maturing within one hundred and eighty-four days issued by any foreign government;
  • (f) marketable securities issued or guaranteed by any foreign government;
  • (g) any reserve asset deemed by the Board to be an internationally recognised reserve asset:

Provided that at no time shall any securities held by the Bank pursuant to paragraph (f) of this subsection which mature beyond five years constitute more than thirty per centum in value of the whole of the assets in the reserve of external assets.

(2) The value of the said reserve shall not at any time be less than fifty per centum of the value of the aggregate of the notes and coins in circulation and the demand liabilities of the Bank.

Part VI. Relations with the Commercial Banks

Statutory Reserve.

19.—(1) Subject to the provisions of this section, every commercial bank shall establish and maintain a reserve to be called “the Statutory Reserve” of not less than that percentage of the amount of its deposit liabilities in Bahamian dollars that is at any time fixed by the Bank under this section.

(2) The Bank may by order fix and from time to time vary the percentage required by subsection (1):

Provided that—

  • (a) the percentage fixed as aforesaid shall not at any time be less than five nor more than twenty per centum;
  • (b) different percentages may be so fixed for different classes of commercial banks;
  • (c) any such order may require a proportion of the said reserve (which shall be specified in the order) to be lodged with the Bank; and
  • (d) no such order shall be made increasing any percentage at the time in force by more than five per centum in any period of thirty days.

(3) If any commercial bank contravenes or fails to comply with any provision of an order made under this section it shall be guilty of an offence against this Act and liable—

  • (a) in the case of a contravention of, or failure to comply with, a requirement under paragraph (c) of the proviso to subsection (2), to a fine not exceeding one thousand five hundred dollars; and
  • (b) in the case of a deficiency in the reserve, to a fine not exceeding one tenth of one per centum of the amount of the deficiency,

for each day during which the contravention or failure to comply, or, as the case may be, the deficiency, occurred or continued.

Liquid assets.

20.—(1) Every commercial bank shall so conduct its business as to ensure, taking one month with another, that its liquid assets are on average not less than that percentage of the amount of its deposit liabilities in Bahamian dollars that is at any time fixed by the Bank under this section.

(2) The Bank may by order fix and from time to time vary the percentage required by subsection (1):

Provided that—

  • (a) the percentage fixed as aforesaid shall not at any time be less than ten nor more than thirty per centum; and
  • (b) different percentages may be so fixed for different classes of commercial banks; and
  • (c) no such order shall be made increasing any percentage at the time in force by more than five per centum in any period of thirty days.

(3) In this section “liquid assets” means-

  • (a) notes and coins;
  • (b) any cash balance held at the Bank;
  • (c) money at call and demand balances at any financial institution carrying on business in The Bahamas;
  • (d) Treasury Bills;
  • (e) stock of the Government;
  • (f) any instrument or security of a kind referred to in subparagraph (ii) of paragraph (f) of section 27;
  • (g) any freely convertible foreign currency;
  • (h) money at call and demand balances at any financial institution abroad being money at call or demand balances held in freely convertible foreign currency;
  • (i) any other asset designated for the purposes of this subsection by the Bank.

(4) In subsection (3)—

“freely convertible foreign currency” means any foreign currency which at the time in question is in the opinion of the Bank a currency that is freely negotiable and transferable in international exchange markets at exchange rate margins consistent with the Articles of Agreement of the International Monetary Fund; 2

“money at call and demand balances at any financial institution” means money at call and demand balances held by any commercial bank at any financial institution less money at call and demand balances held at that bank by any financial institution.”

(5) If any commercial bank contravenes or fails to comply with any provision of an order made under this section it shall be guilty of an offence against this Act and shall be liable on conviction thereof to a fine not exceeding one thousand five hundred dollars for every day during which the offence continues.

21.—(1) Subject to subsection (2), the Bank may by regulations prescribe—

Credit controls.

  • (a) the maximum amounts of loans or advances which commercial banks may have outstanding at any time or during such period or periods as may be specified in the regulations; and
  • (b) the purposes for which, the maturities for which and the security on which loans or advances may or may not be made by commercial banks.

(2) Any such regulations—

  • (a) may be made applicable to all the loans and advances of any specified commercial bank or to any specified class or classes of loans or advances of any specified class or classes of such banks;
  • (b) shall not have effect so as to impose in respect of any loan or advance any limit or restriction that is more rigorous than applies to that loan or advance at the date of the coming into force of the regulations;
  • (c) shall fix a date for the coming into force of the regulations, which shall not be earlier than thirty days after the date of their publication in the Gazette.

Bank as banker to commercial banks.

22. The Bank may act as banker to any commercial bank in The Bahamas and as banker, agent or correspondent to any bank abroad.

Clearing house.

23. The Bank may promote the establishment of a bank clearing system and provide facilities therefor.

Part VII. Relations with the Government

Bank as banker to Government, etc.

24. The Bank may act as banker to the Government or any public corporation.

Bank as agent for the government.

25. The Bank may act generally as agent for the Government on such terms and conditions as may be agreed between the Government and the Bank where the Bank can so act consistently with its functions under this Act and, in particular, the Bank may act as the agent of the Government in the management of the public debt.

Advances to the Government.

26.—(1) Subject to the provisions of this section, the Bank may make temporary advances to the Government on such terms and conditions as may be agreed between the Minister and the Bank.

(2) Every such advance made by the Bank to the Government shall be repaid by the Government as soon as possible.

(3) The amount of any such advances by the Bank to the Government which may be outstanding at any one time shall not exceed ten per centum of the average ordinary revenue of the Government or ten per centum of the estimated ordinary revenue of the Government, whichever is the less.

(4) In subsection (3)—

“ordinary revenue” means all income or contributions to Government revenue not being loans, capital grants or other receipts of a capital nature;

“average ordinary revenue” means the annual average of the ordinary revenue of the Government over the three years (for which accounts have been laid before Parliament) next before the year in which any question under the subsection is raised;

“estimated ordinary revenue” means the ordinary revenue, as estimated in the estimates of the Government as laid before Parliament, for that year.

Part VIII. General Powers of the Bank

Powers of the Bank.

27. Subject to the provisions of this Act, the Bank may, in the discharge of its functions—

  • (a) open accounts for, accept deposits from, and collect money for or on account of, the Government or any commercial bank or any public corporation;
  • (b) buy, hold, sell, discount or re-discount—
    • (i) bills of exchange, promissory notes or other credit instruments maturing within one hundred and eighty days from the date of their acquisition by the Bank;
    • (ii) Treasury Bills;
  • (c) buy, hold and sell securities issued or guaranteed by the Government, being securities issued to the public and maturing within twenty years from the date of their acquisition by the Bank but so that the total amount of any such securities at any time held by the Bank which mature beyond five years after their date of issue (including any such securities held by the Bank as security for any loans or advances) shall not exceed twenty per centum of the demand liabilities of the Bank;
  • (d) for the purpose of promoting the development of a securities market, buy, hold and sell fixed term and fixed interest securities of any company, but so that the total amount of any such securities at any time held by the Bank (including any such securities held by the Bank as security for any loans or advances) shall not exceed five per centum of the total liabilities of the Bank;
  • (e) with the approval of the Minister, buy, hold and sell securities of any public corporation or any company, being a public corporation or company established for the purpose of developing a securities market, or financing economic development, in The Bahamas;
  • (f) make to any commercial bank or any public corporation, on such terms and conditions as may be determined by the Bank, loans or advances on the security of any of the following, that is to say—
    • (i) gold coins or gold bullion;
    • (ii) bills of exchange, promissory notes, other credit instruments, Treasury Bills or securities, being bills of exchange, promissory notes, credit instruments, Treasury Bills or securities of any kind mentioned in paragraph (b) or (c) of this section;
    • (iii) warehouse warrants or other documents to goods duly insured and secured by a letter of hypothecation from the owner; or
    • (iv) securities of any kind mentioned in paragraph (d) or (e) of this section:
    Provided that where any loan or advance is made on the security of any instrument mentioned in subparagraph (ii) of this paragraph—
    • (aa) the loan or advance shall not extend beyond the maturity date of the instrument itself or ninety-three days, whichever is the longer; and
    • (bb) the amount of any such loan or advance shall not exceed eighty-five per centum of the market value of the instrument at the date of its acquisition by the Bank; or

(g) do any other banking business incidental to or consequential upon the functions of the Bank.

Prohibited activities.

28. Except as expressly authorised by this Act, the Bank shall not—

  • (a) engage in trade or otherwise have a direct interest in any business undertaking, except such as the Bank may acquire in the course of the satisfaction of debts due to the Bank, but so that it shall be the duty of the Bank to dispose as soon as may be of any such interest so acquired; or
  • (b) grant unsecured loans or advances to any person; or
  • (c) acquire any interest in real property except in so far as the Bank may consider necessary or expedient for the provision, or the future provision, of premises for the conduct of its business or for any purpose (including use of, or residence in, any such premises by directors, officers or servants of the Bank) incidental to the performance of its functions.

Part IX. Accountants and Statements and Audit

Financial year.

29. The financial year of the Bank shall end on the thirty-first day of December.

Publication of Accounts and report annually.

30.—(1) The Bank shall, within four months after the end of each financial year, cause to be made and transmit to the Minister—

  • (a) a report of the operations of the Bank during that year; and
  • (b) a statement of the accounts of the Bank in respect of that year certified by the auditors appointed under subsection (1) of section 32.

(2) The Bank—

  • (a) shall, in the preparation of the said accounts, exclude from its calculations any profit or loss arising from any revaluation of any assets or liabilities of the Bank occasioned by any change in the value of the currency of The Bahamas, or any foreign currency;
  • (b) shall credit or debit, as the case may require, any such profit or loss to an account (to be established and maintained by the Bank and called “the Exchange Equalisation Account”); and
  • (c) may from time to time transfer to the General Reserve provided for by section 7 any balance at any time in the said Account, or any part thereof, as the Bank thinks fit.

(3) The Minister shall as soon as possible after their receipt—

  • (a) cause a copy of the said report and statement of accounts to be laid before each House of Parliament; and
  • (b) cause a copy of the said statement of accounts to be published in the Gazette.

Publication of statements monthly.

31. The Bank shall on or before the end of every month prepare and transmit to the Minister and publish in the Gazette a statement of the assets and liabilities of the bank as at the last working day of the preceding month.

Audit.

32.—(1) The accounts of the Bank shall be audited annually by auditors appointed by the Board with the approval of the Minister.

(2) Without prejudice to the provisions of subsection (1), the Minister may at any time require the Auditor-General to examine and report on the accounts of the Bank as a whole or any aspect of the operations of the Bank, and the Bank shall provide the Auditor-General with all necessary and proper facilities for such an examination.

Part X. Miscellaneous

Information may be required from financial institutions.

33.—(1) The Bank may require any financial institution or trust company, or any director, officer or servant of such an institution or company, to supply to the Bank in such form and within such time as the Bank may determine such information as the Bank considers necessary to enable the Bank to carry out its functions under this Act:

Provided that information regarding any deposit made by any individual customer with any such institution or company may not be required by the Bank by virtue of the provisions of this section.

(2) Any person who fails to comply with any requirement lawfully made by the Bank under subsection (1) shall be guilty of an offence against this Act and shall be liable on conviction thereof to a fine not exceeding one thousand five hundred dollars for every day during which the offence continues.

Supplying false statement.

34. Any person who supplies or is concerned in supplying to the Minister or the Bank or any other person any statement, account, report or other information pursuant to this Act or any purpose for which any such statement, account, report or information is lawfully required thereunder, knowing the same to be false in a material particular, shall be guilty of an offence against this Act and shall be liable on conviction thereof to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding two years.

Secrecy.

35.—(1) Every director, officer or servant of the Bank shall preserve and aid in preserving secrecy with regard to any matter relating to the affairs of any financial institution or trust company, or of any customer of any such institution or company, coming to his knowledge in the course of the performance of his duties as such a director, officer or servant.

(2) No director, officer or servant of the Bank shall be required to produce in any court any book or document in his custody as such a director, officer or servant or to divulge or communicate to any court any matter mentioned in subsection (1) except on the direction of the court.

(3) Any director, officer, or servant of the Bank who divulges any such matter as aforesaid to any person other than a person to whom he is authorised by the Bank or a court to divulge it, or who allows access to any book or document relating to the affairs of any financial institution or trust company, or of any customer of any such institution or company, by any person not authorised by the Bank or a court for the purpose shall be guilty of an offence against this Act and shall be liable on conviction thereof to a fine not exceeding two thousand five hundred dollars or to imprisonment for a term not exceeding two years.

Offences.

36. Every offence against this Act shall be tried summarily.

Offences by corporations.

37. Where an offence under this Act which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, a director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity he, as well as the body corporate, shall be guilty of that offence and be liable to be proceeded against accordingly.

Exemption from real property tax.

38. The Bank shall be exempt from tax under The Real Property Tax Act, 1969.

Part XI. Repeal, Transitional, etc.

Repeal.

39. The Bahamas Monetary Authority Act, 1968, is hereby repealed, but so that the proviso to subsection (1) of section 38 of that Act shall continue to have effect on and after the commencement of this section as if that subsection had not been repealed. 3

Transitional and saving.

40.—(1) On the date of commencement of this section the property, rights and liabilities which immediately before that date were property, rights and liabilities of the Authority shall, by virtue of this section, vest in the Bank; and on or after that date any legal proceedings in respect of any such property rights or liabilities as aforesaid may be commenced or continued by or against the Bank as they could have been commenced or continued by or against the Authority if this Act had not been passed.

(2) The Minister may by order, made at any time within six months after the aforesaid date, make provision for any matter for which it appears to him requisite or expedient to do so in connexion with, or in consequence of, the vesting by virtue of this section of property, rights or liabilities falling within subsection (1).

Minister may take preliminary action for the Bank.

41. On and after the passing of this Act the Minister shall have power, if it appears to him necessary or expedient to do so in connexion with the establishment of the Bank, to do any act or thing, or incur any expense, which the Bank could have done or incurred by virtue of any provision of this Act if that provision (hereafter in this section referred to as “the relevant provision”) had then been in force; and any act or thing done by the Minister under this section shall on and after the commencement of the relevant provision have the same force and validity as if it had been done by the Bank and any expense so incurred shall be deemed to have been incurred by the Bank, notwithstanding that the relevant provision was not at the time in force.

Consequential amendments. Second Schedule.

42. The enactments specified in the first column of the Second Schedule 4 shall have effect subject to the amendments specified in the second column of that Schedule being amendments consequential upon the provisions of this Act.

First Schedule

(section 3(5))

The Bank

the board of directors

The Board of Directors.

1. The Board of Directors shall consist of—

  • (a) the following persons, to be appointed by the Governor-General, that is to say, a Governor, a Deputy Governor and four other directors, being persons appearing to the Governor-General to have wide experience in, and to have shown capacity in, financial or commercial matters, industry, law or administration; and
  • (b) the Financial Secretary ex officio,

and paragraphs 2 to 10 (inclusive) of this Schedule shall have effect in relation to the Board, but subject, in the case of the Financial Secretary, to the special provisions of paragraph 11 thereof.

Tenure of office.

2.—(1) Each director shall, subject to the provisions of this paragraph, hold and vacate his office in accordance with the terms of his appointment and shall, on ceasing to hold office, be eligible for reappointment.

(2) The Governor and the Deputy Governor shall not be appointed or reappointed for a period exceeding five years.

(3) A director other than the Governor or the Deputy Governor shall not be appointed or re-appointed for a period exceeding four years.

Disqualifications.

3.—(1) The Governor and the Deputy Governor shall not while holding office as such hold any other office or employment, whether remunerated or not, without the prior approval of the Governor-General.

(2) Subject to sub-paragraph (1) of this paragraph, a person may not be appointed or remain a director who—

  • (a) is a member of either House of Parliament; or
  • (b) is a public officer; or
  • (c) is a director, officer or servant of, or is a shareholder of, or has a controlling interest in, any financial institution.

Temporary appointments.

4. The Governor-General may appoint any person eligible to be appointed a director to act temporarily in the place of any director who is absent or unable to act.

Resignations.

5. Any director may at any time by notice in writing to the Governor-General resign his office.

Dismissal.

6. If the Governor-General is satisfied that a director—

  • (a) has been absent from meetings longer than three consecutive months without the permission of the Board; or
  • (b) has become bankrupt or made arrangements with his creditors; or
  • (c) is incapacitated by physical or mental illness; or
  • (d) is otherwise unable or unfit to discharge the functions of a director,

the Governor-General may declare his office as a director to be vacant and shall notify the fact in such manner as the Governor-General thinks fit, and thereupon that office shall become vacant.

Publication of membership.

7. The names of all the directors and every change therein shall be published in the Gazette.

Remuneration.

8. The Bank shall pay to the directors such remuneration (if any), whether by way of salary, honorarium or fees, as the Governor-General may determine and, if a person ceases to be a director and it appears to the Governor-General that there are special circumstances which make it right that that person should receive compensation, the Governor-General may require the Bank to pay to that person a sum of such amount as the Governor-General may determine.

Governor and Deputy Governor.

9.—(1) The Governor shall, subject to the powers of the Board as set forth in subsection (4) of section 3, be the chief executive of the Bank and have charge of the day-to-day management and operation of the Bank.

(2) The Deputy Governor shall perform such functions in relation to the Bank as are assigned to him by the Governor and, in the event of the inability to act of, or a vacancy in the office of, [the] 5 Governor, the Deputy Governor shall have and may exercise the functions of the Governor.

Procedure and meetings.

10.—(1) The Board shall meet as often as may be required for the due performance of its functions, and in any case at least once in every month.

(2) A meeting of the Board—

  • (a) may be convened by the Governor or, in his absence, the Deputy Governor;
  • (b) shall be convened on the written requisition of two directors or the Financial Secretary, specifying the reasons for which the meeting is required.

(3) Meetings of the Board shall be presided over by the Governor or, in the event of his inability to act, by the Deputy Governor.

(4) Three directors (of whom one shall be either the Governor or the Deputy Governor) shall form a quorum at any meeting.

(5) A decision shall be adopted by a simple majority of the directors present and in the case of an equality of votes the person presiding at the meeting shall have and exercise a casting vote.

(6) A director who is directly or indirectly interested otherwise than as a director or in common with other directors in a contract or other transaction made or proposed to be made by the Bank shall disclose the nature of his interest at the first meeting of the Board at which he is present after the relevant facts have come to his knowledge; and any such disclosure shall be recorded in the minutes of the Board and, after the disclosure, that director shall not take any part in any deliberation or decision of the Board with respect to that contract or transaction.

(7) Minutes of each meeting of the Board shall be kept in such form as the Board may determine.

(8) No act or proceeding of the Board shall be invalidated merely by reason of any vacancy in the Board or of any defect in the appointment of a director.

(9) No action, suit, prosecution or other proceeding shall be brought or instituted personally against any director in respect of any act done bona fide in pursuance or execution or intended execution of this Act.

(10) Where any director is exempt from liability by reason only of the provisions of sub-paragraph (9) of this paragraph the Bank shall be liable to the extent than 6 it would be if that member were an employee or agent of the Bank.

Special Provisions regarding the financial secretary.

11. The following provisions of this Schedule shall not apply to or in relation to the Financial Secretary, that is to say, sub-paragraphs (1) and (3) of paragraph 2; sub-paragraph 2(b) of paragraph 3; paragraph 4; paragraph 5; paragraph 6.

staff

Power to employ staff.

12.—(1) Subject to sub-paragraph (2) of this paragraph, the Bank may appoint and employ at such remuneration and on such terms and conditions as it thinks fit such officers, servants and agents as the Board considers necessary for the due discharge of the functions of the Bank.

(2) An annual salary exceeding twelve thousand dollars shall not be assigned to any post, nor shall an appointment be made to any post to which such a salary is assigned, without the Minister’s prior approval.

Pensions and gratuities for staff.

13. The Bank shall have power—

  • (a) to pay to or in respect of officers or servants of the Bank such pensions or gratuities; or
  • (b) to make such payments towards the provision for them of pensions or gratuities; or
  • (c) to maintain for them such pension schemes (whether contributory or not), as the Bank may determine.
authentication of documents

14.—(1) The seal of the Bank shall be kept under the control of the Governor or the Deputy Governor, and the affixing thereof shall be authenticated by the signature of the Governor or the Deputy Governor and one other director authorised by the Board to act in that behalf.

(2) Any document purporting to be a document duly executed under the seal of the Bank shall be received in evidence and shall, unless the contrary is proved, be deemed to be a document so executed.

(The Second Schedule is omitted from this volume.}

The Banks Act 1

An Act relating to Banks and Banking.

[23rd August, 1909]

1. This Act may be cited as The Banks Act.

Short Title.

2. In this Act, unless the context otherwise requires—

Interpretation.

“bank” means any person carrying on banking business; “banking business” means the business of receiving on current, savings, deposit or other similar account money which is repayable by cheque or order and which may be invested by way of advances to customers or otherwise.

“cashier” includes the cashier of any branch or agency of a bank;

“court” means the Supreme Court;

“manager” includes the manager of any branch or agency of a bank;

“Minister” means the Minister responsible for banks;

“Registrar” means the Registrar General;

“Registry” means the Registry of Records.

Application of Act.

3. The provisions of this Act shall apply to every bank in the Colony. 2

Certified copies of Acts, charters or certificates of incorporation to be recorded.

4.—(1) Every bank commencing to carry on business in the Colony after the coming into operation of this Act, shall, within three days after commencing to carry on such business, cause to be filed in the Registry a copy of the Act, charter or certificate of incorporation of such bank.

(2) Every such bank shall, in like manner, cause to be filed in the Registry copies of any further Act, charter or certificate of incorporation of such bank within three months from the date when such Act, charter or certificate of incorporation shall come into operation.

(3) The correctness of all copies filed under this section shall be authenticated in such manner as the Minister may from time to time direct, and every such copy so filed shall be open to the inspection of all persons desiring to peruse the same without payment of any fee.

Trusts.

5. A bank shall not be bound to see to the execution of any trust, whether expressed, implied or constructive, to which any share of its stock is subject.

Banks may hold real property.

6. A bank may acquire and hold real property within the Colony for its actual use and occupation and the management, transaction and carrying on of its business, and may sell or dispose of such real property and acquire other real property in its stead.

Dividends to be paid out of profits only.

7. All dividends of the shareholders of a bank shall be paid out of the profits and not out of the subscribed capital of the bank.

Yearly statements to be published.

8.—(1) Every bank shall, within four months of the end of its financial year, publish in the Gazette a true and full yearly statement of its accounts, and the auditor of the bank shall certify that such statement is properly drawn up so as to exhibit a true and correct view of the state of the bank’s affairs as shown by the books of the bank, and the auditor of the bank shall have the right of access at all times to the books, accounts and vouchers of the bank: provided that the Minister may, if he sees fit, exempt any bank from the provisions of this section.

(2) Such statement shall be signed by the cashier or manager or by such other person or officer of the bank as may from time to time be authorised by the bank to sign such statement on behalf of the bank; and the correctness thereof shall be declared to in such manner and by such persons as the Minister may direct.

(3) Such statements shall be in such form and contain such particulars as the Minister may from time to time direct so far as such directions shall not be contrary to the provisions of any law of the United Kingdom or any other country of the Commonwealth under the authority of which a bank is carrying on business within the Colony.

Minister may call for further information.

9. A bank shall from time to time, if required by the Minister, furnish to the Minister a special return and such further information as the Minister may reasonably see fit to call for.

Failure to comply with the requirements of sections 8 and 9.

10. If any bank or person fails to comply with the requirements of section 8 or 9 of this Act within a period of four months of the end of its financial year in the case of section 8 or for forty-two days after the date appointed by the Minister under section 9 for so doing, as the case may be, the bank or person so in default shall be liable to a penalty of twenty pounds for every day of such default:

Provided that the Minister may extend the time for sending such returns for such further period, not exceeding sixty days as he thinks expedient.

Injunction to restrain persons, companies, etc., acting contrary to this Act.

11. The Government of the Colony in the name of the Attorney General may, in addition to recovering any penalty or forfeiture in any action to recover the same, apply to the court for an injunction to restrain any company, corporation, society, partnership, person or bank, acting contrary to or in defiance of the provisions of this Act, from so acting.

Service of process.

12. A bank may sue and be sued and may proceed and be proceeded against in its corporate name and whenever it shall be necessary to serve any summons, writ, process, notice or other document on the bank, it shall be sufficient to deliver the same to the cashier or manager or other officer of the bank in the Colony, or to leave the same for him at the principal office of the bank in the Colony; and if service cannot be effected in the manner hereinbefore prescribed it shall be lawful to effect the same by delivering such summons, writ, process, notice or other document to the president or vice-president of the bank, or by leaving the same for him as aforesaid; and if service cannot be effected in either of the modes hereinbefore prescribed it shall be lawful to effect the same in such manner as the court in which the suit, action or proceeding is being prosecuted, or any judge thereof, shall prescribe.

Notices.

13. In all cases where it may be necessary for a bank to serve or give any summons, demand or notice of any kind whatsoever to any person such summons, demand or notice may be served or given in writing signed by the cashier, manager, attorney or solicitor for the time being of the bank within the Colony without it being required to be under the common seal of the bank.

Byelaws.

14. Such persons or body of persons as may be authorised by the Act, charter or certificate of incorporation of any bank or by this Act, or by any Imperial statute in force in the Colony, or by any statute of any other country of the Commonwealth controlling such bank, may from time to time elect or otherwise provide for the appointment of office-bearers and directors, and also make, ordain and prescribe byelaws, rules and orders for the government of the bank, and the regulation and management of its concerns, and such byelaws, rules and regulations from time to time alter and amend, as to them may seem expedient:

Provided that no such byelaw, rule or order shall be repugnant to the Act, charter or certificate of incorporation or of this Act, or of any Imperial statute in force in the Colony relating to a bank doing business in the Colony or of any statute of any other country of the Commonwealth controlling such bank and until otherwise prescribed by byelaws, rules, regulations and orders made under this section, the byelaws, rules, regulations and orders made by a bank and in force on the coming into operation of this Act, shall remain in full force and effect so far as the same are not repugnant as aforesaid.

Suspension of specie payments for 60 days.

15. In case of the suspension of specie payments on demand by a bank for the space of sixty days in any year, either consecutively or at intervals, or of the breach of any of the conditions upon which a bank is empowered to carry on a banking business, the privileges conferred on such bank within the Colony by the Act, charter or certificate of incorporation of such bank or by this Act shall cease and determine as if the period of time limited therefor by such Act, charter or certificate of incorporation had expired.

Recovery of penalties.

16. All penalties and forfeitures under this Act shall be sued for in the court, in the name of the Attorney General, and the proceeds thereof, when recovered, shall be paid into the Treasury in aid of the general revenue.

Deposits to credit of deceased persons, how dealt with.

17.—(1) Notwithstanding the provisions of any Act or law to the contrary, the manager or assistant manager of a bank may, without the production of probate or letters of administration, pay any sum not exceeding one hundred pounds 3 standing to the credit of a deceased person to any person (in this section referred to as the claimant) who upon producing satisfactory proof of the death of such deceased person and upon producing such evidence as may be required by the manager or assistant manager, appears to such manager or assistant manager to be entitled by law to the said sum standing to the credit of such deceased person:

Provided—

  • (a) before any payment is made to any person under this section the claimant shall make and deliver to the bank a declaration in the form prescribed by section 8 of The Oaths Act (in this section referred to as a statutory declaration) to the effect that the deceased person has no real estate and his total personal estate does not exceed one hundred pounds;
  • (b) the claimant shall deliver to the bank evidence that at least two months’ notice has been given by advertisement in three issues of the Gazette by the claimant calling on all persons having any claims to the estate of the deceased person to notify the bank in writing of such claims;
  • (c) that no other claims to the estate of the deceased person have been received by the bank; and
  • (d) the bank shall forward the statutory declaration and the evidence of the advertisement to the Registrar General.

(2) The bank shall not be liable in respect of any claim by any person in connection with a payment made in accordance with this section but any person may nevertheless recover any sum lawfully due to him from the person receiving any payment so made.

Offence of issuing false certificate etc.

18. Whoever, being an officer, clerk, or servant of any bank, with intent to cause or enable any person to be defrauded or deceived, or with intent to commit or to facilitate the commission by himself or by any other person of any offence, issues or publishes any certificate or statement purporting to relate to the affairs of the bank or to the account or to the affairs of any customer thereof which he knows to be false in any material particular shall be guilty of an indictable offence against this Act and shall be liable on conviction to a fine not exceeding two thousand pounds 4 or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

Preservation of secrecy.

19.—(1) Except for the purpose of the performance of his duties or the exercise of his functions under this Act or when lawfully required to do so by any court of competent jurisdiction within the Colony or under the provisions of any law, no person shall disclose any information relating to the affairs of a bank or of the customer of a bank which he has acquired in the performance of his duties or the exercise of his functions under this Act.

(2) Every person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding one thousand pounds 4 or to a term of imprisonment not exceeding one year or to both such fine and imprisonment.

The Banks and Trust Companies Regulation Act, 1965 1

An Act to regulate Banking Business and Trust Companies within the Colony 2 and other matters related thereto.

[Assented to 28th October, 1965]

[Commencement 28th October, 1965]

Be it enacted by the Governor and Commander-in-Chief in and over the Bahama Islands, by and with the advice and consent of the Senate and the House of Assembly of the said Islands, and by the authority of the same as follows:—

Short title.

1. This Act may be cited as The Banks and Trust Companies Regulation Act 1965.

Interpretation.

2. In this Act unless the context otherwise requires:—

“authorized agent” means a person designated by a bank or trust company under the provisions of section 4 of this Act;

“bank” means any person carrying on banking business;

“banking business” means the business of receiving on current, savings, deposit or other similar account money which is repayable by cheque or order or other instructions and which may be invested by way of advances to customers or otherwise;

“company” means a company incorporated either under the laws of the Colony or under the laws of any other country or place; “

licence” means a licence granted under section 4 of this Act or deemed to be so granted in accordance with that section;

“licensee” means any person holding a licence under the provisions of this Act;

“Minister” means the Minister for Finance;

“person” includes any body of persons corporate or unincorporate;

“prescribed” means prescribed by regulations made under this Act;

“trust business” means the business of acting as trustee, executor or administrator;

“trust company” means any company carrying on trust business.

Licence required to carry on banking business or to operate a trust company.

3.—(1) No banking business shall be carried on from within the Colony whether or not such business is carried on in the Colony except by a person who is in possession of a valid licence granted by the Minister authorizing him to carry on such business:

Provided that any bank in the Colony carrying on banking business at the commencement of this Act shall be deemed to have been granted a licence under section 4 of this Act for a period of six months from the commencement of this Act.

(2) No trust company shall carry on trust business from within the Colony whether or not such business is carried on in the Colony unless it is in possession of a valid licence granted by the Minister authorizing it to carry on such business:

Provided that any trust company in the Colony carrying on trust business at the commencement of this Act shall be deemed to have been granted a licence under section 4 of this Act for a period of six months from the commencement of this Act:

Provided further that anything lawfully done within the provisions of The Securities Act, 1971, by or on behalf of a company which within the meaning of that Act—

  • (a) is a corporation participating in a registered investment company scheme; or
  • (b) is the manager of a registered unit trust scheme,

shall be deemed, in so far as done in relation to such respective scheme, not to be in contravention of this subsection, notwithstanding that such company may not be in possession of a licence granted by the Minister as mentioned in this subsection.

(3) Every person who contravenes the provisions of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding one thousand pounds or to imprisonment for a term not exceeding one year or to both such fine and imprisonment and in the case of a continuing offence to a fine not exceeding one hundred pounds for each day during which the offence continues.

Application shall be made to the minister.

4.—(1) Any person desirous of carrying on banking business and any company desirous of carrying on trust business from within the Colony shall make application to the Minister for the grant of a licence. Every such application shall be in writing and shall contain such information and particulars and shall be accompanied by such references as may be prescribed and the Minister may, if satisfied that the carrying on of such business will not be against the public interest, grant a licence to such person or company subject to such terms and conditions, if any, as the Minister may deem necessary.

(2) Every bank and every trust company in the Colony at the commencement of this Act which proposes to carry on, or continue in, banking business or trust business, as the case may be, shall within six months of that date apply to the Minister for a licence in accordance with the provisions of subsection (1) of this section.

(3) Whenever he considers it to be in the public interest, the Minister may refuse to grant a licence.

(4) A licence shall not be granted to any bank or trust company having its head office or its registered office outside the Colony unless such bank or trust company designates and notifies to the Minister—

  • (a) a principal office in the Colony;
  • (b) by name one of its officers who is to be the bank’s or trust company’s authorized agent in the Colony; and
  • (c) by name another of its officers who in the absence or inability to act of the officer named under paragraph (b) of this subsection is to be the bank’s or trust company’s authorized agent in the Colony.

(5) It shall be a condition of every licence granted to a bank or trust company to which subsection (4) of this section applies, that the bank or trust company shall forthwith notify the Minister in writing of any change of—

  • (a) its principal office in the Colony; or
  • (b) either or both of the officers designated pursuant to paragraph (b) or (c) of subsection (4) of this section.

(6) The Minister may by Order revoke any licence—

  • (a) if the licensee has ceased to carry on banking business or trust business; or
  • (b) if the licensee becomes bankrupt or goes into liquidation or is wound up or otherwise dissolved; or
  • (c) in the circumstances and in the manner provided for in section 9 of this Act.

5. No shares in a company or certificates of deposit or any other securities of such company which is a licensee under this Act shall be issued and no issued shares shall be transferred or disposed of in any manner without the prior approval of the Minister:

Shares etc. not to be issued or transferred without approval of the Minister.

Provided that—

  • (a) this section shall not apply to the several banks and trust companies specified in the First Schedule 3 hereto; and
  • (b) the Minister may exempt any other licensee from the provisions of this section subject to such terms and conditions, if any, as the Minister may deem necessary.

Use of the word “bank” etc.

6.—(1) Except with the approval of the Minister no person, other than a licensee shall—

  • (a) use or continue to use the words “bank”, “trust”, “trust company”, “trust corporation”, “savings” or “savings and loan” or any of their derivatives either in English or in any other language, in the description or title under which such person is carrying on business from within the Colony whether or not such business is carried on in the Colony;
  • (b) make or continue to make any representation in any billhead, letter, letterhead, circular, paper, notice, advertisement or in any other manner whatsoever that such person is carrying on banking business or trust business or is authorised by the law of the Bahama Islands to carry on;
  • (c) in any manner whatsoever solicit or receive deposits from the public.

(2) Except with the approval of the Minister, no company shall be registered or continue to be registered, by a name which contains the words “bank”, “trust”, “trust company”, “trust corporation”, “savings” or “savings and loan” or any of their derivatives either in English or in any other language, in the description or title under which such company is carrying on business from within the Colony whether or not such business is carried on in the Colony:

Provided that any company in the Colony carrying on banking business or trust business at the date of commencement of this Act shall be deemed to have been granted the approval of the Minister for the continued use of any name used by such company immediately before that date for a period of six months from that date.

(3) Before giving his approval under subsection (1) or subsection (2) of this section the Minister may require of any person such references and such other information and particulars as may be prescribed.

(4) Whenever he considers it to be in the public interest the Minister may withdraw any approval given under subsection (1) of this section.

(5) The Minister may refuse to grant a licence to a bank or a trust company, or if such bank or trust company is already in possession of a licence, he may revoke such licence, if in his opinion such bank or trust company is carrying on or intending to carry on banking or trust business, as the case may be, under a name which—

  • (a) is identical with that of any company, firm or business house whether within the Colony or not or which so nearly resembles that name as to be calculated to deceive; or
  • (b) is calculated to suggest, falsely, the patronage of or connection with some person or authority whether within the Colony or not.

(6) Every person who contravenes the provisions of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding one thousand pounds or to a term of imprisonment not exceeding one year or to both such fine and imprisonment and in the case of a continuing offence to a fine not exceeding one hundred pounds for each day during which the offence continues.

The Minister may require financial statement etc. of licensee.

7. The Minister, in relation to a licensee which is or appears likely to become unable to meet its obligations or which in the opinion of the Minister is carrying on business in a manner detrimental to the public interest or to the interest of creditors or depositors of such licensee, may by instrument in writing require the manager or authorized agent of such licensee to supply within such reasonable time as may be specified in the instrument—

  • (a) the financial statement of that licensee as at a date within the previous fifteen months audited by an auditor who shall be a chartered accountant or a certified public accountant approved of by the Minister; and
  • (b) such other information relating to the licensee as may be so specified;

and any person who contravenes the requirements of such an instrument or who in response to such an instrument knowingly or wilfully supplies false information to the Minister shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding five hundred pounds or to a term of imprisonment not exceeding six months or to both such fine and imprisonment.

Powers and duties of the Inspector.

8.—(1) There is hereby established the office of Inspector of Banks and Trust Companies (in this Act referred to as “the Inspector”), and the functions of that office shall on and after the commencement of Part II of The Central Bank of The Bahamas Act, 1974, vest in the Central Bank of The Bahamas established by section 3 of that Act.

(2) It shall be the duty of the Inspector—

  • (a) to maintain a general review of banking practice in the Colony;
  • (b) whenever he thinks fit or when required by the Minister to examine in such manner as he thinks necessary the affairs or business of every licensee carrying on business from within the Colony for the purpose of satisfying himself that the provisions of this Act are being complied with and that the licensee is in a sound financial position, and to report to the Minister the results of every such examination;
  • (c) to examine and to report on the several returns delivered to the Minister pursuant to section 7 of this Act; and
  • (d) to examine and make recommendations to the Minister with respect to applications for licences.

(3) In the performance of his functions under this Act and subject to the provisions of section 10 hereof, the Inspector shall be entitled at all reasonable times—

  • (a) to have access to such books, records, vouchers, documents, cash and securities of any licensee;
  • (b) to call upon the manager or any officer designated by the manager of any licensee for such information or explanation,

as the Inspector may reasonably require for the purpose of enabling him to perform his functions under this Act:

Provided always that the Inspector shall only have access to the account of a depositor of a licensee or to any information, matter or thing relating to or concerning the affairs of any customer of a licensee under the authority of an order of a Judge of the Supreme Court made on the ground that there are no other means of obtaining the information required by him.

(4) The Inspector with the approval of the Minister may in writing authorize any other person to assist the Inspector in the performance of his functions under this Act.

(5) Any person who fails to comply with any requirement made pursuant to subsection (3) of this section by the Inspector or any person authorized under subsection (4) of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding five hundred pounds or to a term of imprisonment not exceeding six months or to both such fine and imprisonment.

Powers of the Minister.

9. If in the opinion of the Minister a licensee is carrying on its business in a manner detrimental to the public interest or to the interests of its depositors or other creditors or is either in the Colony or elsewhere contravening the provisions of this or any other Act or of any Order or Regulations made under this Act, the Minister may from time to time as may to him seem necessary, require that licensee forthwith to take such steps as he may consider necessary to rectify the matter or may make an order revoking the licence of such licensee and requiring its business in the Colony to be wound up.

Preservation of secrecy.

10.—(1) Except for the purpose of the performance of his duties or the exercise of his functions under this Act or when lawfully required to do so by any court of competent jurisdiction within the Colony or under the provisions of any law of the Colony, no person shall disclose any information relating to any application by any person under the provisions of this Act or to the affairs of a licensee or of any customer of a licensee which he has acquired in the performance of his duties or the exercise of his functions under this Act.

(2) Every person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding one thousand pounds or to a term of imprisonment not exceeding one year or to both such fine and imprisonment.

The Minister may suspend licence.

11.—(1) Whenever the Minister is of the opinion that any action under section 4(6), section 6 or section 9 of this Act should be taken against a licensee, he may forthwith suspend the licence of such licensee and before taking such action the Minister shall give that licensee notice in writing of his intention so to do setting out in such notice the grounds on which he proposes to act and shall afford the licensee within such time as may be specified therein not being less than seven days an opportunity of submitting to him a written statement of objections to such action, and thereafter the Minister shall advise the licensee of his decision.

(2) Whenever the Minister shall suspend a licence under subsection (1) of this section he may cause notice of such suspension to be published in the Gazette.

(3) Any suspension of a licence under subsection (1) of this section shall be for a period of ninety days, or until the Minister takes action under section 4(6), section 6 or section 9 of this Act or until the Minister notifies the licensee that the suspension is removed, whichever period is the shorter.

Power of search.

12.—(1) If a justice of the peace is satisfied by information on oath given by the Inspector or by a person authorized under section 8(4) of this Act to assist the Inspector either:—

  • (a) that a licence has been suspended; or
  • (b) that there is reasonable ground for suspecting that an offence against this Act or The Banks Act has been or is being committed and that evidence of the commission of the offence is to be found at any premises specified in the information, or in any vehicle, vessel or aircraft so specified; or
  • (c) that any books, records, vouchers, documents, cash or securities which ought to have been produced under section 8(3) of this Act and have not been produced are to be found at any such premises or in any such vehicle, vessel or aircraft,

he may grant a search warrant authorizing the Inspector or such person authorized under section 8(4) of this Act or any peace officer together with any other person named in the warrant and any other peace officers, to enter the premises specified in the information or, as the case may be, any premises upon which the vehicle, vessel or aircraft so specified may be, at any time within one month from the date of the warrant, and to search the premises or, as the case may be, the vehicle, vessel or aircraft.

(2) The person authorized by any such warrant as aforesaid to search any premises or any vehicle, vessel or aircraft may search every person who is found in or whom he has reasonable ground to believe to have recently left or to be about to enter those premises or that vehicle, vessel or aircraft, as the case may be, and may seize any books, records, vouchers, documents, cash or securities found in the premises or in the vehicle, vessel or aircraft which he has reasonable ground for believing to be evidence of the commission of any offence against this Act or The Banks Act or any such books, records, vouchers, documents, cash or securities found in the premises or in the vehicle, vessel or aircraft which he has reasonable ground for believing ought to have been produced under section 8(3) of this Act:

Provided that no female shall, in pursuance of any warrant issued under this subsection be searched except by a female.

(3) Where by virtue of this section a person has any power to enter any premises he may use such force as is reasonably necessary for the purpose of exercising that power.

(4) Every person who shall obstruct the Inspector or any other person in the exercise of any powers conferred on him by virtue of this section shall be guilty of an offence against this Act and shall be liable on summary conviction to a fine not exceeding one hundred pounds or to imprisonment for a term not exceeding three months or to both such fine and imprisonment.

Attorney General’s fiat.

13. No prosecution in respect of any offence committed under this Act shall be instituted except by or with the consent of the Attorney General.

Regulations.

14. The Minister may make regulations for all or any of the following purposes:—

  • (a) to prescribe the information, particulars and references which may be prescribed under section 4(1) and section 6(3) of this Act;
  • (b) generally for carrying the purposes or provisions of this Act into effect.

Saving.

15.—(1) The provisions of this Act shall have effect in addition to and not in derogation of any other provisions having the force of law in the Colony.

(2) This Act shall not apply to the Post Office Savings Bank.

16.—(1) An appeal shall lie to the Supreme Court from any decision of the Minister—

Appeal.

  • (a) revoking a licence under section 4(6), section 6(5) or section 9 of this Act;
  • (b) withdrawing any approval under section 6(4) of this Act; or
  • (c) requiring a licensee to take certain steps which the Minister may specify under section 9 of this Act.

(2) An appeal against the decision of the Minister shall be on motion. The appellant within twenty-one days after the day on which the Minister has given his decision shall serve on the Attorney General a notice in writing signed by the appellant or his counsel or Attorney of his intention to appeal and of the general ground of his appeal:

Provided that any person aggrieved by the decision of the Minister may upon notice to the Attorney General apply to the Supreme Court for leave to extend the time within which the notice of appeal prescribed by this section may be served, and the Supreme Court upon the hearing of such application may extend the time prescribed by this section as it deems fit.

(3) The Attorney General shall upon receiving the notice of appeal transmit to the Registrar of the Supreme Court without delay a copy of the Minister’s decision and all papers relating to the appeal:

Provided that the Attorney General shall not be compelled to disclose any information if he considers that the public interest would suffer by such disclosure.

(4) The Registrar shall set the appeal down for argument on such day, and shall cause notice of the same to be published in such manner, as the Supreme Court may direct.

(5) At the hearing of the appeal the appellant shall, before going into the case, state all the grounds of appeal on which he intends to rely and shall not, unless by leave of the Supreme Court, go into any matters not raised by such statement.

(6) The Supreme Court may adjourn the hearing of the appeal and may upon hearing thereof confirm, reverse, vary or modify the decision of the Minister or remit the matter with the opinion of the Supreme Court thereon to the Minister.

(7) An appeal against a decision of the Minister shall not have the effect of suspending the execution of such decision.

Fees. Second Schedule.

17.—(1) The provisions of the Second Schedule 4 shall have effect for the payment of fees in respect of the matters mentioned in that Schedule, and all such fees shall be payable to the Treasurer.

(2) All fees paid pursuant to subsection (1) of this section and the said Second Schedule shall be placed in the Consolidated Fund.

(3) The Minister may by regulations vary the fees prescribed in the said Second Schedule, so, however, that any such regulations which increase the amount of any fees payable under this Act shall be exempt from the provisions of The Statutory Instruments Act but instead be subject to affirmative resolution of both chambers of the Legislature. 5

(4) In subsection (3) of this section the expression “affirmative resolution of both chambers of the Legislature” in relation to regulations means that the regulations are not to come into operation unless and until affirmed by a resolution of each of those chambers.

Second Schedule.

(5) If any person fails to comply with any requirement of subsection (1) of this section and the Second Schedule, he, or, where such person is a company, the company and every director, manager, secretary or other officer of the company who knowingly and wilfully authorizes or permits the default, shall on summary conviction be liable, for every day during which the default continues, to a fine not exceeding fifteen dollars.

{The First and Second Schedules are omitted from this volume.}

The Rate of Interest Act 1

An Act to regulate the rate of interest which may be charged on loans and for purposes connected therewith.

[17th August, 1948]

Short title.

1. This Act may be cited as The Rate of Interest Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“court” means the Supreme Court, or a magistrate’s court to the extent to which it has civil jurisdiction under any Act.

Rates of interest on loans.

3. The rate of interest which may be charged by any person on any loan of money made after the commencement of this Act shall not directly or indirectly exceed twenty per centum per annum simple interest on loans of more than twenty-five pounds, 2 or thirty per centum per annum simple interest on loans of twenty-five pounds or any less amount irrespective of the date fixed for repayment of the said loan.

Contracts to pay unauthorised rates void.

4. Any contract, promissory note, bill of exchange, cheque, receipt or any other document entered into after the commencement of this Act, whereby a rate of interest higher than that authorised by section 3 of this Act purports to be payable either expressly or by implication in respect of any loan, shall be absolutely null and void, and no proceedings shall be entertained in any court either for the recovery of the loan or of any interest thereon.

Transaction harsh and unconscionable if rates exceeded on loans made prior to this Act.

5. For the purposes of The Money Lending Act, and the granting of relief thereunder, the fact that interest has been charged on any loan made prior to the commencement of this Act at a rate higher than that authorised by section 3 of this Act shall be conclusive evidence that the rate of interest charged was excessive, and that the transaction was harsh and unconscionable.

When loan deemed to be made.

6. Where any loan made before the commencement of this Act is renewed after the commencement of this Act, or where any note or other document is executed after the commencement of this Act in respect of a loan made prior thereto, such loan shall be deemed to have been made, and such note or other document to have been executed, in respect of a loan made after the commencement of this Act.

Penalties.

7. Any person who contravenes or attempts to contravene any of the provisions of this Act shall be guilty of an offence, and shall be liable on summary conviction to a fine of one hundred pounds 3 or six months imprisonment or to both.

Application of this Act.

8. Notwithstanding anything to the contrary, this Act shall not apply to any loan made—

  • (a) in a currency other than the currency of The Bahamas;
  • (b) in the currency of The Bahamas by any institution licensed under the Banks and Trust Companies Regulation Act, 1965.

The Money Lending Act 1

An Act relating to money lending.

[7th July, 1913]

Short title.

1. This Act may be cited as The Money Lending Act.

Interpretation.

2. In this Act, unless the context otherwise requires—

“court” means the Supreme Court or any magisterial court to the extent to which it has civil jurisdiction under any Act.

Powers of the court.

3.—(1) If proceedings are taken in any court by any person for the recovery of any money lent after the commencement of this Act or for the enforcement of any agreement or security made or taken after the commencement of this Act in respect of money lent, and if there is evidence which satisfies the court that the interest charged in respect of the sum actually lent is excessive, or that the amounts charged for expenses, inquiries, fines, bonus, premiums, renewals or any other charges, are excessive, and that, in either case, the transaction is harsh and unconscionable, or is otherwise such that a court of equity would give relief, the court may—

  • (a) re-open the transaction and take an account between the lender and the person sued;
  • (b) notwithstanding any statement or settlement of account or any agreement purporting to close previous dealings and create a new obligation re-open any account, already taken between them, and relieve the person sued from payment of any sum in excess of the sum adjudged by the court to be fairly due in respect of such principal, interest and charges, as the court, having regard to the risk and all the circumstances, may adjudge to be reasonable;
  • (c) if any such excess has been paid, or allowed in account, by the debtor, order the creditor to repay it;
  • (d) set aside, either wholly or in part, or revise, or alter, any security given or agreement made in respect of money lent;
  • (e) if the lender has parted with the security, order him to indemnify the borrower or other person sued.

Proceedings by borrower against lender.

(2) Any court in which proceedings might be taken for the recovery of money lent by any person shall have and may, at the instance of the borrower or surety or other person liable, exercise the like powers as may be exercised under this section, where proceedings are taken for the recovery of money lent, and the court shall have power, notwithstanding any provision or agreement to the contrary, to entertain any application under this Act by the borrower or surety, or other person liable, notwithstanding that the time for repayment of the loan, or any instalment thereof, may not have arrived.

Bankruptcy.

(3) On any application relating to the admission or amount of a proof by a person who has lent money in any bankruptcy proceedings, the court may exercise the like powers as may be exercised under this section when proceedings are taken for the recovery of money.

Application to all money lending.

(4) The foregoing provisions of this section shall apply to any transaction which, whatever its form may be, is substantially one of money lending.

Bona fide assignee.

(5) Nothing in the foregoing provisions of this section shall affect the rights of any bona fide assignee or holder for value without notice.

Existing powers of court.

(6) Nothing in this section shall be construed as derogating from the existing powers or jurisdiction of any court.

The Bahamas Development Bank Act, 1974 1

An Act to provide for the establishment of a financial institution to be known as the Bahamas Development Bank, for the functions of the Institution and for matters connected therewith or incidental thereto.

[Assented to 18th October, 1974]

Be it enacted by The Queen’s Most Excellent Majesty, by and with the advice and consent of the Senate and the House of Assembly of the Commonwealth of The Bahamas, and by the authority of the same, as follows:—

Part I. Preliminary

Short title and commencement.

1. This Act may be cited as The Bahamas Development Bank Act, 1974 and shall come into operation on such date as the Minister may appoint by notice published in the Gazette.

Interpretation.

2.—(1) In this Act, unless the context otherwise requires—

“agriculture” includes fisheries, forestry, horticulture, and use of land for any purpose of husbandry including the keeping or breeding of livestock, poultry and bees and the growing of vegetables or fruits and the like;

“agricultural enterprise” means an enterprise in The Bahamas in

which is carried on the business of agriculture;

“approved enterprise” means an agricultural enterprise, an industrial enterprise, a tourist industry enterprise or any other enterprise that may from time to time be approved by the Minister by order;

“Bank” means the Bahamas Development Bank established by section 3;

“Board” means the Board of Directors of the Bank as constituted under section 7;

“Chairman” means the Chairman of the Board;

“debenture” includes debenture stock;

“financial year” in relation to the Bank means the period of twelve months beginning on the first day of January in any year:

Provided that the period beginning on the date of the commencement of this Act and ending on the 31st day of December next following shall be deemed to be a financial year;

“functions” includes powers and duties;

“Government” means the Government of The Bahamas;

“industrial enterprise” means an enterprise in The Bahamas in which is carried on the business of—

  • (a) manufacturing, processing, transforming, assembling, installing, overhauling, reconditioning, altering, repairing, cleaning, packaging, transporting or warehousing of goods;
  • (b) drilling, construction, engineering, technical surveys or scientific research;
  • (c) exploiting natural resources;
  • (d) operating a mine or quarry;
  • (e) generating, supplying or distributing electricity;
  • (f) operating a commercial transport service;
  • (g) supplying premises, machinery or equipment, for any business mentioned in paragraph (a), (b), (c), (d), (e) or (f) of this definition under a lease, contract or other arrangement whereby title to the premises, machinery or equipment is retained by the supplier;

“managing director” means the managing director of the Bank;

“Minister” means the Minister of Finance;

“securities” include any stock, equity holding, debenture, instrument of indebtedness, warrant or similar document;

“subsidiary” means any body corporate in which the Bank owns or controls more than fifty per centum of the voting rights;

“tourist industry enterprise” means an enterprise in The Bahamas in which is carried on the business of—

  • (a) supplying hotel accommodation or other facilities principally intended for visitors to The Bahamas; or
  • (b) supplying premises or equipment for any business referred to in paragraph (a) of this definition under a lease, contract or other arrangement whereby title to the premises or equipment is retained by the supplier.

(2) Unless the contrary intention appears, references in this Act to a Part or section or Schedule are references to a Part or section of, or a Schedule to, this Act and reference in a section to a subsection are references to a subsection of that section.

Part II. Establishment, General Functions and Responsibilities of the Bank

Establishment of Bahamas Development Bank.

3.—(1) There is hereby established for the purposes of this Act a Bank to be known as the Bahamas Development Bank.

(2) The Bank shall be a body corporate having perpetual succession and a common seal and, subject to the provisions of this Act, with power to acquire, hold and dispose of movable and immovable property of whatever kind and to enter into contracts and to do all things necessary for the purposes of its functions.

(3) The Bank may sue and be sued in its corporate name.

(4) The seal of the Bank shall be authenticated by the signature of the Chairman and one other director authorised to act in that behalf and shall be judicially and officially noticed.

(5) All documents, other than those required by law to be under seal, made by, and all decisions of, the Board may be signified under the hand of the Chairman or any director or officer authorised to act in that behalf.

Principal functions of Bank.

4. Subject to the provisions of this Act, the principal functions of the Bank shall be—

  • (a) to promote industrial, agricultural and commercial development in The Bahamas through the financing of, or the investing in approved enterprises;
  • (b) to encourage the participation in approved enterprises by citizens of The Bahamas; and
  • (c) generally to promote and enhance the economic development of The Bahamas.

General powers of Bank.

5. Subject to the provisions of this Act, the Bank shall have power to do anything or to enter into any transaction whether or not involving expenditure, making or guaranteeing of loans or investing of money, the acquisition of any property or rights, which in its opinion is calculated to facilitate the proper discharge of its functions or is incidental or conducive thereto, and, in particular, but without limiting the generality of the foregoing, may—

  • (a) provide finance in the form of loans, long, medium or short term, or by the purchase of securities or by participating in any share issue of any approved enterprise;
  • (b) obtain funds from international agencies, financial agencies of the governments of countries outside The Bahamas, banks, other financial institutions or the public for the purpose of relending such funds within The Bahamas;
  • (c) invest moneys standing to the credit of the Bank by ways of loans, the purchase of securities, participation in any share issue of any approved enterprise or in such other manner as the Bank may from time to time think proper;
  • (d) guarantee loans from other investment sources to persons wishing to establish or modernise any approved enterprise;
  • (e) act as agents for the sale and purchase of any shares or securities or for any other monetary or mercantile transaction;
  • (f) negotiate or pay in advance coupons and interests on public loans or securities;
  • (g) contract for public and private loans and negotiate and issue the same;
  • (h) act as agents for any Government or other authority and for public and private bodies and persons;
  • (i) promote, effect, induce, guarantee, underwrite, participate in, manage, or carry out any issue of Government or other loans or of shares or securities of any company, corporation or association, and lend money for the purposes of any such issue;
  • (j) issue common or preferred stock and other equity securities;
  • (k) accumulate reserves, pay dividends, issue warrants or otherwise distribute profits.

Place of business.

6. The Bank shall have its principal place of business in the City of Nassau and may establish such branch offices elsewhere within The Bahamas and may appoint such agents and correspondents as may be required.

Board of Directors.

7.—(1) There shall be a Board of Directors of the Bank who, subject to the provisions of this Act, shall be responsible for the policy of the Bank and the general administration of its affairs and business.

(2) The Board shall consist of a Chairman, who shall be a person having in the opinion of the Minister considerable knowledge and experience of banking and financial matters, and not less than six other directors of whom—

  • (a) one shall be the managing director;
  • (b) five shall be persons having, in the opinion of the Minister, knowledge and experience of the economy of The Bahamas.

(3) The Chairman and every director shall be appointed by the Minister by instrument in writing.

(4) The managing director shall be the chief executive of the Bank and shall be responsible to the Board for—

  • (a) the day to day administration of the Bank’s affairs; and
  • (b) the provision of technical advice and guidance in matters of policy.

(5) No action, suit, prosecution or other proceeding shall be brought or instituted personally against the Chairman or any other director in respect of any act done bona fide in pursuance or execution or intended execution of the provisions of this Act.

Schedule.

(6) Where any director is exempt from liability by reason only of the provisions of subsection (5), the Bank shall be liable to the extent that it would be if that director were a servant or agent of the Bank.

(7) The provisions of the Schedule shall have effect as to the tenure of office of the directors and the operations of the Board and otherwise in relation thereto.

Appointment of officers, servants and agents.

8. The Board may, subject to the approval of the Minister, appoint and employ at such remuneration and on such terms and conditions as it thinks fit such officers, servants and agents as it thinks necessary for the proper performance of its functions under this Act.

Minister may give policy directions.

9.—(1) The Minister may, after consultation with the Chairman, give to the Bank such directions in writing as to the policy to be followed by the Bank in performance of its functions as appear to the Minister to be requisite in the public interest, and the Bank shall give effect to any such directions.

(2) The Bank shall furnish the Minister with such returns, accounts and other information as he may require with respect to the property and activities of the Bank, and shall afford to him facilities for verifying such information in such manner and at such times as he may reasonably require.

Part III. Special Functions and Powers of Bank in Relation to Small Business

10. For the purposes of this Part, “small business” or “business” means an enterprise of an industrial, commercial, agricultural, manufacturing or servicing character.

Interpretation.

11.—(1) Subject to the provisions of this Part, it shall be the duty of the Bank to assist persons who are citizens of The Bahamas in establishing, carrying on or expanding small businesses by granting loans and other forms of financial assistance and generally by giving advice and technical assistance to such persons.

Functions of Bank in relation to small businesses.

(2) For the purpose of the discharge of its duty under subsection (1) the Bank shall have power to—

  • (a) grant loans on such terms as to security, rate of interest, repayment of principal and other similar matters as the Bank may think fit;
  • (b) guarantee loans where the purpose of a loan is one for which the Bank would have power to make a loan under this Part;
  • (c) purchase, for the purpose of reselling or letting on hire or hire-purchase to persons establishing or carrying on business to which this Part applies, equipment, plant, tools and other articles necessary for establishing or carrying on such business;
  • (d) make loans to or make investments in registered cooperative societies for the purpose of enabling such societies to perform the same functions in regard to the business [to] 2 which this Part applies as the Bank is required by this Part to perform.

(3) In addition to any powers possessed by the Bank under this or any other Act, the Bank shall have power, subject to the provisions of this Act and of any regulations made thereunder, to do anything and to enter into any transaction which, in the opinion of the Bank, is necessary to ensure the proper discharge of its functions under this Part.

Small Business Advisory Committee.

12.—(1) There shall be a standing committee of the Board to be known as the “Small Business Advisory Committee” (hereafter in this Part referred to as “the Committee”) which shall consist of—

  • (a) the Chairman or Acting Chairman of the Board;
  • (b) one other Director appointed by the Board; and
  • (c) the managing director.

(2) The Committee shall have power—

  • (a) to co-opt as members of the Committee not more than two persons who are not directors or officers of the Bank;
  • (b) to invite persons who are not members of the Committee to attend meetings thereof and to advise the Committee on any particular matter;
  • (c) to regulate its own procedure.

Limitation on operations of Bank under this part.

(3) It shall be the duty of the Committee to advise and make recommendations to the Bank on all matters relating to the functions of the Bank under this Part.

13.—(1) No loan or other financial assistance may be granted by the Bank under this Part unless the application for the loan or other financial assistance has first been referred to the Committee and received a favourable recommendation from the Committee.

(2) In granting a loan or other financial assistance under this Part, the Bank shall have regard to the availability of finance from other sources and shall not, as a general rule, itself grant a loan or other financial assistance under this Part if such assistance is available from other sources on terms and conditions which are not less favourable than the Bank itself would impose.

(3) No loan or other financial assistance shall be granted by the Bank under this Part for the sole purpose of enabling goods to be purchased in order that they may be resold in the same condition as that in which they were purchased but, notwithstanding the foregoing provisions of this subsection, the Bank may grant a loan to a person engaged in the retail trade if the purpose of the loan is to enable such a trader to acquire premises in which to establish a business or to enable such a trader to acquire or improve equipment or plant necessary for the purpose of establishing or carrying on his business.

Part IV. Financial Provisions

ageneral

Authorised capital.

14.—(1) The authorised capital of the Bank shall be five million dollars divided into one million shares of the par value of five dollars each.

(2) The Government may subscribe for the said one million five dollars shares such amount as the minister may from time to time determine at par

(3) Subject to the approval signified by resolution of the House of Assembly the authorised capital of the Bank may from time to time be increased by resolution of the Board.

Borrowing powers.

15.—(1) Subject to the provisions of this Act and with the prior approval of the Minister, the Bank may borrow money required by it for meeting any of its obligations or performing any of its functions.

(2) The aggregate of the liabilities of the Bank outstanding at any one time, including direct liabilities such as bonds and debentures issued by the Bank and the contingent liabilities of the Bank in the form of guarantees given or underwriting agreements entered into by it, shall not at any time exceed seven times the aggregate amount of the paid up capital and the reserve fund for which provision is made in section 19.

Guarantee of borrowings by Government.

16.—(1) With the prior approval signified by resolution of the House of Assembly, the Minister may guarantee, in such manner and on such conditions as he may think fit, the payment of the principal and of interest on any authorised borrowings of the Bank.

(2) Where the Minister is satisfied that there has been default in the repayment of any principal moneys or interest guaranteed under the provisions of this section he shall direct the repayment from the Consolidated Fund of the amount in respect of which there has been such default.

Repayment of and interest on advances and sums issued to meet Guarantee.

17. The Bank shall make to the Treasurer at such times and in such manner as the Minister may direct payments of such amounts as may be so directed in or towards repayment of advances made to the Bank by Government and of any sums issued at such rate as the Minister may direct and different rates of interest may be directed as respects different advances and sums and as respects interest for different periods.

Securities.

18. The Bank—

  • (a) may issue debentures or bonds for the purpose of exercising its borrowing powers under section 15;
  • (b) shall establish a sinking fund for the redemption of debentures so created;
  • (c) may postpone sinking fund contributions for such period or periods of time as may be approved by the Minister.

Reserve fund.

19. The Bank shall set aside in each year out of the net profits (if any) of the Bank a minimum of twenty-five per centum of such profits towards a reserve fund to meet contingencies and for such other purposes as the Bank may think fit until the total amount standing to the credit of such reserve fund shall amount to a sum equal to its paid up capital.

Accounts and audit.

20.—(1) The Bank shall keep proper accounts and other records in relation to the business of the Bank and shall prepare annually a statement of accounts in a form satisfactory to the Minister, being a form which shall conform with the best commercial standards.

(2) The accounts of the Bank shall be audited by an auditor or auditors appointed annually by the Bank and approved by the Minister.

(3) So soon as the accounts of the Bank have been audited, the Bank shall send the statement of the accounts referred to in subsection (1) to the Minister together with a copy of any report made by the auditors on that statement or on the accounts of the Bank.

(4) The auditor’s fees and expenses of the audit shall be paid by the Bank.

(5) The auditor shall be entitled, on the direction of the Minister, at all reasonable times to examine the accounts and other records in relation to the business of the Bank and the Bank shall provide the auditor with all necessary and proper facilities for such an examination.

(6) The members of the Board, officers and servants of the Bank, shall grant to an auditor appointed under subsection (2) to audit the accounts or to the auditor in the exercise of his functions under subsection (5) access to all books, documents, cash and securities of the Bank and shall give to him on request all such information as may be within their knowledge in relation to the operations of the Bank.

(7) Any person who fails without reasonable excuse to comply with the provisions of subsection (6) shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding three hundred dollars or to a term of imprisonment not exceeding six months.

Annual Report.

21.—(1) The Bank shall, not later than four months after the end of each financial year, cause to be made and transmitted to the Minister a report dealing with the activities of the Bank during the preceding financial year, and containing such information relating to the proceedings and policy of the Bank as can be made public without detriment to the interests of the Bank.

(2) The Minister shall cause a copy of the report together with the annual statements of accounts and the auditor’s report thereon to be laid on the table of both Houses of Parliament.

(3) Copies of the Bank’s report together with the annual statement of accounts and the auditor’s report on that statement or on the accounts of the Bank shall be published in such manner as the Minister may direct and shall be made available to the public by the Bank at a reasonable price.

Prohibited activities.

22.—(1) Except as expressly authorised by this Act the Bank may not—

  • (a) without the approval signified by resolution of the House of Assembly in each case, sell, pledge, distribute or otherwise dispose of more than twenty-five per centum of its ordinary shares or common stock of any subsidiary of the Bank;
  • (b) except as it becomes necessary through bankruptcies, defaults in performance of agreements or covenants, or other similar events, engage directly in manufacturing, agriculture or any similar business activity.

(2) In computing the percentage of the ordinary shares or common stock specified in paragraph (a) of subsection (1) account shall not be taken of any such shares or stock held by other agencies of the Government.

boperational powers

Repayment of loans made by the Bank.

23.—(1) Subject to the provisions of this section, every loan made by the Bank shall be repaid to the Bank in accordance with the terms and conditions under which such loan was made.

(2) The Bank may at any time accept payment of the whole or part of the amount representing the principal of a loan and interest thereon, before the time when such payment is due, upon such terms and conditions as it thinks fit.

Examination of application of moneys lent.

24.—(1) Where the Bank has made or guaranteed a loan of money under the provisions of this Act, it shall—

  • (a) from time to time make or cause to be made such examination as may be necessary to ensure that the loan is being applied to the purposes for which it is made;
  • (b) require the person to whom the loan was made to give either immediately or periodically such information to the Bank as the Bank may require, and such person shall comply with the requirements of the Bank.

(2) The Bank may authorise in writing any of its officers or any other person to make such examination, and any officer or person so authorised shall be entitled to demand production of all such books, documents and other matters and things as he considers necessary for the purpose of making such examination.

(3) Any person who fails without reasonable cause to give any information as required in accordance with paragraph (b) of subsection (1), or to produce a book, document or other matter or thing as demanded in accordance with subsection (2) shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding three hundred dollars or to a term of imprisonment not exceeding six months.

Order of Bank upon such examination.

25. Where on any examination made under section 24 it appears to the Bank that any sum, being the whole or any part of the loan made or guaranteed by the Bank, has not been applied to the purposes for which the loan was made, it may order that any such sum be, within the time mentioned in the order, applied to such purposes or, if the loan was made by the Bank, that such sum, together with any interest due thereon on the date of the order, be repaid to the Bank within the time mentioned on the order, and any sum with the interest thereon so ordered to be repaid to the Bank shall thereupon become a debt due to the Bank.

Misapplication of loan secured by mortgage or otherwise.

26.—(1) If any loan made under the provisions of this Act or any part of such loan has been misapplied the Bank may—

  • (a) where the loan has been secured by mortgage, by notice in writing addressed to the mortgagor, recall the said loan or any part thereof and may require the loan or that part together with any interest due on the loan or part thereof on the date of the notice, to be repaid on a date to be specified in the notice and in default of payment on such specified date any security given for the purpose of the loan may thereupon be realised;
  • (b) where the loan has been secured otherwise than by way of mortgage, by notice addressed to the borrower, require the loan, or any part thereof, together with any interest due on the loan or part thereof on the date of the notice to be repaid on a date to be specified in the notice, and in default of payment on such specified date any security given for the purpose of the loan may thereupon be realised.

(2) The provisions of subsection (1) shall be in addition to any other proceedings which may be taken by the Bank under any other Act.

Enforcement of securities.

27. Where any property mortgaged as security for a loan under the provisions of this Act is sold for the purpose of the enforcement of the security, the Bank may buy such property and may either manage and hold such property or carry on any business with such property or sell or otherwise dispose of it as the Bank thinks fit.

Power to appoint a receiver, etc.

28.—(1) Notwithstanding that a loan granted by the Bank may not have been secured by a mortgage within the meaning of The Conveyancing and Law of Property Act, the Bank may, if a borrower defaults in respect of a loan made by the Bank, appoint a receiver in respect of the business in connection with which the loan was made, and a receiver so appointed shall have the same powers mutatis mutandis as a receiver appointed pursuant to the power conferred on a mortgagee by section 21 of The Conveyancing and Law of Property Act.

(2) A person appointed by the Bank to be a receiver pursuant either to the power conferred on a mortgagee by section 21 of The Conveyancing and Law of Property Act or to the power conferred on the Bank by subsection (1), shall, if the Bank so appoint, be also the manager of the business in respect of which the loan was made and the effect of such an appointment shall be the same as if the person so appointed had been appointed by the Supreme Court to be the receiver and manager of such business.

(3) No person appointed by the Bank to be a receiver or a receiver and manager under this section shall be deemed to be an officer of the Court.

Offences in respect of loans.

29. Any person who—

  • (a) obtains a loan or other financial assistance from the Bank by means of any false representation;
  • (b) wilfully applies any loan made to him by the Bank or guaranteed by the Bank under the provisions of this Act to any purpose other than the purpose for which the loan was made;
  • (c) having obtained a loan from the Bank or the guarantee by the Bank of a loan under the provisions of this Act, wilfully destroys any security given in relation to any such loan or guarantee,

shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding one thousand five hundred dollars, or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.

Part V. Miscellaneous

Power to delegate.

30. Subject to the provisions of this Act, the Bank may—

  • (a) delegate to any director or to the managing director or any other officer of the Bank the power to carry out on behalf of the Bank such duties as the Bank may determine;
  • (b) delegate to the management of any subsidiary such of the Bank’s powers in relation to that subsidiary as are consistent with the provisions of the legislation under which the subsidiary is established; and

any such delegation—

  • (i) shall be made subject to such restrictions and conditions as the Bank thinks fit;
  • (ii) while in force shall not prevent the exercise by the Bank of the power thereby delegated;
  • (iii) may at any time be revoked by the Bank.

Minutes receivable in evidence.

31. Minutes made of meetings of the Board shall, if duly signed by the Chairman or other director presiding at the meeting, be receivable in evidence in all legal proceedings without further proof and every meeting of the Board in respect of which minutes have been so signed shall be deemed to have been duly convened and held and all the directors present thereat to have been duly qualified to act.

Secrecy.

32.—(1) Except in so far as may be necessary for the due performance of his functions under this Act, or as may be required by the provisions of any agreement into which the Bank has entered, every director, officer and employee of the Bank shall preserve and aid in preserving secrecy with regard to all matters relating to the affairs of the Bank or any customer of the Bank or of any person who has any dealings with the Bank, that may come to his knowledge in the course of his duties.

(2) Any director, officer or employee of the Bank who—

  • (a) communicates any matter referred to in subsection (1) to any person other than the Board, a director, an officer or employee of the Bank authorised in that behalf by the managing director of the Bank or a person to whom any such matter is required to be communicated under the provisions of any agreement into which the Bank has entered; or
  • (b) suffers or permits any unauthorised person to have access to any books, papers or other records relating to the Bank or any customer of the Bank or other person having dealings with the Bank,

shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding two thousand five hundred dollars or to imprisonment for a term not exceeding one year.

(3) No officer or employee of the Bank shall be required to produce in any court any book or document or to divulge or communicate to any court any matter or thing coming under his notice in the performance of his duties under this Act, except on the direction of the court or in so far as may be necessary for the purpose of carrying into effect the provisions of this Act.

Verifying false statements.

33. Any director, officer, employee or auditor of the Bank who verifies any statement, account or report required to be furnished to the Minister pursuant to this Act, or who is concerned with delivering or transmitting the same to the Minister, knowing the same to be false in a material particular, shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding two years.

Regulations.

34. The Minister may make regulations—

  • (a) prescribing the maximum amount of any loan which may be made or guaranteed in respect of any one business under Part III; and
  • (b) prescribing any other thing which may be or is required to be prescribed under this Act.

Schedule

(Section 7(7))

Tenure of office.

The term of office of every director shall be specified in the instrument appointing him and—

  • (a) for the Chairman shall not exceed five years; and
  • (b) for every other director shall not exceed three years,

but any director retiring on the expiration of his term of office shall, subject to paragraph 2 of this Schedule, be eligible for reappointment.

Disqualification of directors.

2. A person may not be appointed or remain a director who is a member of Parliament.

Temporary appointment.

3. The Minister may appoint any person who might be appointed a director to act temporarily in the place of any director who is absent or unable to act.

Resignation.

4.—(1) Any director other than the Chairman may at any time resign his office by instrument in writing addressed to the Minister and transmitted through the Chairman, and from the date of the receipt by the Minister of such instrument such director shall cease to be a director of the Bank.

(2) The Chairman may at any time resign his office by instrument in writing addressed to the Minister and such resignation shall take effect on the date of the receipt of such instrument by the Minister.

Revocation of appointments.

5. The Minister may at any time by instrument in writing revoke the appointment of any director if he thinks it expedient so to do.

Filling of vacancies.

6. If any vacancy occurs in the membership of the Board, such vacancy shall be filled by the appointment of another member who shall, subject to the provisions of this Schedule, hold office for the remainder of the period for which the previous member was appointed.

Publication of membership.

7. The names of all members of the Board as first constituted and every change in the membership thereof shall be published in the Gazette.

Procedure at meetings.

8.—(1) The Board shall meet as often as it deems necessary or expedient for the due performance of its functions and of the functions of the Bank (but not less frequently than ten times in each year) and such meetings shall be held at such places, on such days and at such times as the Chairman determines.

(2) The Chairman, or, in the event of the absence or inability to act of the Chairman, a director elected by the directors present to act in that behalf, shall preside at a meeting of the Board and the Chairman or director so presiding shall, where the voting is equal, have a casting vote.

(3) The quorum of the Board shall be such number as the Board may fix from time to time being not less than one-half of the total number of members of the Board.

(4) The validity of any proceeding of the Board shall not be affected by any vacancy amongst the directors or by any defect in the appointment of a director.

(5) Subject to the provisions of this Schedule the Board may regulate its own proceedings.

Remuneration.

9. There shall be paid to the Chairman and the other directors such remuneration, if any, as the Minister may determine.

Prevention of conflict of interest.

10. The Bank shall not make an investment in or otherwise transact business with any enterprise in which a director of the Bank is a partner, director or shareholder or is in any other way directly or indirectly interested.

The Savings Bank Act 1

An Act relating to the Bahamas Post Office Savings Bank.

[1st June, 1936]

Short title.

1. This Act may be cited as The Savings Bank Act.

2. In this Act, unless the context otherwise requires—

Interpretation.

“Minister” means the Minister responsible for the Post Office

Savings Bank; “prescribed” means prescribed by rules under this Act;

“revenue” of the Savings Bank does not include moneys received on deposit;

“Savings Bank” means The Post Office Savings Bank established under The Post Office Act and continued under this Act as the Post Office Savings Bank of the Colony. 2

Constitution of Savings Bank.

3. The Savings Bank (and all offices thereof) subsisting at the time when this Act comes into operation shall be deemed to be constituted and appointed under this Act.

Management Under Postmaster.

4. Subject to the provisions of section 11 of this Act the Savings Bank shall be under the management and control of the Postmaster who may, subject to the provisions of this Act and any rules made thereunder, take such steps as may be desirable for the encouragement of thrift, for the proper management of the Savings Bank, and otherwise for the promotion of the objects and purposes of this Act.

Establishment and closure of branch savings banks.

5. The Postmaster may, with the approval of the Minister, open branch savings banks at any post office in the Colony and may, with like approval, close any branch savings bank.

Appointment of Officers.

6. The Governor-General, acting in accordance with the advice of the Public Service Commission, may appoint such persons as may be necessary for the execution of this Act.

Deposits and repayments.

7. Deposits of money to be paid into the Savings Bank shall be received and repaid under such conditions as may be prescribed.

Security of Government.

8. The repayment of all moneys deposited in the Savings Bank together with interest thereon is guaranteed by the Government of the Colony, and accordingly if at any time or times the assets of the Savings Bank shall be insufficient to pay the lawful claims of every depositor, the Minister of Finance shall cause such deficiency to be met out of the Consolidated Fund, which is hereby appropriated to that purpose.

Interest

9.—(1) Interest shall be payable on deposits at the rate of two per per centum per annum, or at such other rate as may be fixed from time to time by the Minister:

Provided that not less than three months’ notice of any notice of any change of rate shall be given in the Gazette.

(2) Such interest shall not be payable on any amount less than one pound or on any fraction of one pound and shall not commence to accrue until the first day of the month next following the day of deposit, and shall cease on the last day of the month preceding that in which such deposit shall be withdrawn.

(3) Interest on deposits shall, subject to the provisions of subsection (2) of this section, be calculated to the thirtieth day of June in every year and shall then be added to and become part of any principal money remaining on deposit.

Salaries and expenses.

10.—(1) All expenses incurred in the execution of this Act shall be met from revenue derived from the investment of moneys deposited in the Savings Bank.

(2) For the purposes of this Act expenses shall mean the cost of any work or service done by or in connection with the Savings Bank, including such sum on account of administrative and other overhead expenses as may, with the approval of the Minister, be reasonably assigned to that work or service.

Disposal of moneys.

11.—(1) Subject to the provisions of this Act moneys in the Savings Bank shall not be applied in any way to the purposes of the Colony, but, except so far as any sums may be prescribed to be kept in hand for the general purposes of the Savings Bank, shall be deposited in the Treasury and shall, as far as practicable, be invested on behalf of the Savings Bank, under the direction of the Treasurer, in such securities or be employed at interest in such manner as shall be approved from time to time by the Minister, and any such investment may at any time be changed into other like securities:

Provided that not more than one-third of such moneys shall at any time be or remain invested in securities of the Government of the Colony.

(2) Any sums of money that may from time to time be required for the repayment of any deposit or deposits under the authority of this Act, or for the payment of interest thereon or expenses incurred in the execution of this Act, may be raised by the sale of the whole or part of such securities:

Provided that any sums of money which may be required for the purposes aforesaid, may, with the approval of the Minister, be advanced to the Savings Bank by the Treasurer out of the general revenues of the Colony until they can be raised by the sale of such securities and such advances shall bear interest at the rate from time to time payable to depositors.

Accounts.

12. Annual accounts of the revenue and expenditure of the Savings Bank and of deposits received and repaid and interest credited to depositors during the year ended on the thirtieth day of June together with a statement of the assets and liabilities of the Savings Bank, shall, after being audited and certified by the Auditor, be laid upon the table of the two Houses of the Legislature not later than the thirty-first day of December ensuing in every year and shall as soon as practicable thereafter be published in the Gazette.

Surpluses and deficits.

13.—(1) If in any year the revenue of the Savings Bank shall be insufficient to defray the interest due to depositors and all expenses under this Act, such deficiency shall be met out of the Consolidated Fund which is hereby appropriated to that purpose.

(2) If in any year the revenue of the Savings Bank shall be more than sufficient to defray the interest due to depositors and all expenses under this Act, then the Minister may direct the transfer of the surplus or any portion thereof to the Consolidated Fund:

Provided that no such transfer shall be made unless the assets of the Savings Bank will thereafter exceed the liabilities by not less than fifteen per centum of the liabilities to depositors.

(3) If on the thirtieth day of June in any year the assets of the Savings Bank exceed the liabilities by more than fifteen per centum of the liabilities to depositors then the Minister may direct that the surplus over fifteen per centum or any portion thereof shall be transferred to the Consolidated Fund.

Powers to make rules.

14.—(1) The Minister may make rules for the management and regulation of the Savings Bank.

(2) In particular and without prejudice to the generality of the foregoing powers such rules may—

  • (a) prescribe limits of deposits;
  • (b) prescribe the modes of making deposits;
  • (c) prescribe the modes of withdrawing deposits and interest;
  • (d) prescribe the times at which deposit books shall be returned to the Savings Bank by depositors;
  • (e) regulate deposits by minors, guardians, trustees, married women, Friendly Societies and other charitable bodies;
  • (f) prescribe conditions for the withdrawal of moneys by minors, guardians, trustees, married women, Friendly Societies and other charitable bodies;
  • (g) prescribe the modes of dealing with the deposits of deceased or insane persons;
  • (h) prescribe penalties not exceeding a fine of twenty-five pounds for the breach of any such rule;
  • (i) provide for the forfeiture of deposits made in wilful contravention of this Act;
  • (j) authorise the Postmaster to enter into an arrangement with the Post Office Savings Bank of the United Kingdom of Great Britain and Northern Ireland or with the Government Savings Bank of any other country of the Commonwealth, or any foreign country, for the transfer of any sum standing to the credit of depositors from such Savings Bank to the Colony Savings Bank, and vice-versa, and prescribe conditions for such transfers.

Names of depositors, etc., not to be disclosed.

15.—(1) No person appointed to carry this Act into effect shall disclose the name of any depositor or the amount which may have been deposited or withdrawn by any depositor except in due course of law, or to such person or persons as may be appointed to assist in carrying this Act into operation.

(2) Any person contravening the provisions of this section shall on summary conviction be liable to a fine of one hundred pounds.

Settlement of disputes.

16. If any dispute shall arise between the Postmaster or the officer managing and controlling any branch savings bank and any individual depositor therein, or any executor, administrator, next-of-kin of a depositor, or any creditor or assignee of a depositor who may become bankrupt or insolvent, or any person claiming to be such executor, administrator, next-of-kin, creditor or assignee, or to be entitled to any money deposited in such Savings Bank, then, and in every such case, the matter in dispute shall be referred to an arbitrator to be appointed by the Minister, and if the parties be dissatisfied with the decision given by the single arbitrator so appointed the matter may be referred to arbitration under the provisions of The Arbitration Act.

Non-liability of Government.

17. When any payment is made or act done by the Postmaster or any person acting under his authority in accordance with this Act and the rules for the time being made thereunder, the Government, the Postmaster and such person shall not be liable in respect of any claim on the part of any person in connection with such payment or act, but any person may nevertheless recover any sum lawfully due to him from the person to whom the Postmaster has paid the same.

The Securities Act, 1971 1

An Act to regulate the business of dealings in securities; to control the issue of prospectuses by companies; to make provision for preventing fraud in connexion with dealings in investments; and for related purposes.

[Assented to 8th June, 1971]

Be it enacted by The Queen’s Most Excellent Majesty, by and with the advice and consent of the Senate and the House of Assembly of the Commonwealth of the Bahama Islands, and by the authority of the same, as follows:—

Part I. Preliminary

Short title and commencement.

1. This Act may be cited as The Securities Act, 1971, and shall come into operation on such day as the Minister may appoint by notice published in the Gazette.

2.—(1) In this Act, unless the context otherwise requires—

Interpretation.

“authorised dealer” has the meaning assigned thereto in paragraph (1) of regulation 44 of The Exchange Control Regulations;

“authorised agent” means a person appointed as authorised agent for a beneficial owner of investment currency or foreign currency securities pursuant to The Exchange Control Regulations and licensed under The Banks and Trust Companies Regulation Act, 1965, to carrv on trust business:

“Bahamian-based mutual fund scheme” means a mutual fund scheme of a kind specified in the Schedule;

Schedule.

“corporation” means any body corporate, incorporated or registered whether in the Bahama Islands or elsewhere;

“dealing in securities” means doing any of the following things (whether as a principal or as an agent), that is to say, making or offering to make with any person, or inducing or attempting to induce any person to enter into or offer to enter into—

  • (a) any agreement for, or with a view to, acquiring, disposing of, subscribing for or underwriting securities; or
  • (b) any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities,

and “deal in securities” shall be construed accordingly;

“debentures” means any debentures, debenture stock or bonds of a corporation, whether constituting a charge on the assets of the corporation or not;

“investment company scheme” means a scheme consisting of any arrangements made for the purpose, or having the effect, of providing facilities for the participation by persons in profits or income arising from the operation of a corporation engaging primarily, or purporting to engage primarily, in the business of acquiring, holding, managing or disposing of securities or any other property whatsoever;

“licence” means a licence under section 5;

“Minister” means the Minister of Finance;

“mutual fund scheme” means any investment company scheme or unit trust scheme but does not include any such scheme where, under the provisions of the scheme—

  • (a) the persons participating in profits or income in the scheme may not exceed twenty-four; and
  • (b) none of such persons as aforesaid may be a corporation or firm;

“private corporation” means a corporation which, by the charter, statutes or memorandum and articles of the corporation or other instrument constituting or defining the constitution of the corporation—

  • (a) limits the number of its members to twenty-four;
  • (b) prohibits any other corporation or any firm from membership of the corporation or holding any of its securities; and
  • (c) prohibits any person other than the holder from having any interest in any of its securities;

“registered”, in relation to a mutual fund scheme, means registered, or deemed to be registered, under section 8; and “unregistered” in relation to such a scheme shall be construed accordingly;

“section” means section of this Act;

“securities” means—

  • (a) shares or debentures, or rights or interests (described whether as units or otherwise) in any shares or debentures; or
  • (b) securities of the Government of the Bahama Islands or of the Government of any country outside the Bahama Islands,

and includes rights or interest (described whether as units or otherwise) which may be acquired under any mutual fund scheme;

“shares” means shares in the share capital of a corporation or stock of a corporation;

“unit trust scheme” means a scheme consisting of any arrangements made for the purpose, or having the effect, of providing facilities for the participation by persons, as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever.

(2) Any reference in this Act to a licence holder or to the holder of a licence shall be construed as a reference to the person named in the licence as being thereby authorised to carry on the business of dealing in securities.

(3) Any reference in this Act to the manager of a mutual fund scheme or to the trustee of such a scheme shall be construed as a reference to the person in whom are vested the powers of management relating to property for the time being the subject of the scheme or, as the case may be, the person in whom such property is or may be vested in trust in accordance with the terms of the scheme.

(4) Any reference in this Act to a servant of, or to a person employed by, any person shall, in relation to a corporation, be construed as including a reference to any director or officer of the corporation.

(5) For the purposes of this Act, a person shall be deemed to be a director of a corporation 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 the directors of a corporation or any of them act:

Provided that a person shall not by reason only that the directors of a corporation act on advice given by him in a professional capacity be taken to be a person in accordance with whose directions or instructions those directors or any of them act.

Part II. Dealing in Securities

Dealing in securities prohibited.

3.—(1) Save as expressly allowed under this Act, no person shall engage in, carry on or purport to carry on the business of dealing in securities or, in the capacity of a servant or agent of any person engaged in, carrying on or purporting to carry on that business, deal or purport to deal in securities.

(2) Any person who contravenes this section shall be guilty of an offence and, subject to section 24, liable, on conviction on information, to imprisonment for a term not exceeding two years or to a fine not exceeding one thousand five hundred dollars or to both such imprisonment and fine or, on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred dollars or to both such imprisonment and fine.

When and by whom dealing in securities permitted.

4. The restrictions imposed by section 3 in relation to dealing in securities shall not apply—

  • (a) to the doing of anything by or on behalf of—
    • (i) the holder of a licence in respect of any securities or class of securities specified in such licence; or
    • (ii) an authorised dealer or an authorised agent in respect of any securities other than securities of an unregistered mutual fund scheme; or
    • (iii) a private corporation in respect of any dealing in securities by such corporation on behalf of the members of such corporation; or
    • (iv) the manager or trustee of a registered mutual fund scheme in respect of any securities of the scheme; or
  • (b) for the period of two months commencing on the date of commencement of this Act, to any dealing in securities by or on behalf of any person who immediately before that date was engaged in, or carried on, the business of dealing in securities and if, but only if, any such person makes application in writing for the purpose to the Minister before the expiry of that period, for a further period of four months immediately following that period.

Licences to deal in securities.

5.—(1) Subject to the provisions of this Act, the Minister, upon an application in that behalf made by any person in the prescribed manner and upon payment of the prescribed fee, may grant to that person a licence to deal in securities or in any particular securities or in any such class or classes of securities as the Minister may think fit.

(2) The Minister shall not grant an application for a licence if it appears to him that—

  • (a) by reason of the applicant or any person employed by or associated with the applicant for the purposes of his business—
    • (i) having been convicted whether within or without the Bahama Islands of an offence his conviction for which necessarily involved a finding that the applicant or, as the case may be, such person acted fraudulently or dishonestly; or
    • (ii) having committed any breach of any rules made under this Act for the regulation of the conduct of business by holders of licences; or
  • (b) by reason of any circumstances whatsoever which either are likely to lead to the improper conduct of business by, or reflect discredit on the method of conducting business of the applicant or any person so employed by or associated with him as aforesaid; or
  • (c) by reason of the applicant’s lack of experience or financial resources,

the applicant is not a fit and proper person to hold a licence.

(3) A licence shall, unless in the meantime it is revoked, be valid for the period of one year beginning with the day specified in the licence as the day on which it takes effect, so, however, that, upon application made for the purpose in the prescribed manner and upon payment of the prescribed fee, such licence may be renewed by the Minister by endorsement on the licence for a further period of one year, and thereafter for further periods of one year, upon application made, and after payment of the prescribed fee, as aforesaid, successively from year to year if the Minister approves.

(4) A licence shall specify the securities or class or classes of securities in which the holder is thereby authorised to deal.

(5) A licence shall be subject to such conditions as the Minister may deem it expedient to impose.

(6) A licence shall specify the name of the person thereby authorised to carry on the business of dealing in the securities or class or classes of securities therein mentioned and shall not authorise him to carry on the business under any name other than that specified as his name in the licence:

Provided that, if the Minister thinks fit, such a licence may, at the request of the applicant for the licence, be framed so as to authorise the holder thereof to carry on the said business, either alone or jointly with any other person, being the holder of a licence, under such name or style as the applicant may specify in his application.

(7) A copy of the licence shall be exhibited and kept exhibited at every place in the Bahama Islands where the holder carries on the business authorised thereunder.

Revocation of licences.

6.—(1) Subject to subsection (2) of this section, a licence may be revoked at any time by the Minister in any case where the Minister is satisfied that circumstances exist in which a licence could not be granted to the holder by virtue of the provisions of subsection (2) of section 5.

(2) Any holder of a licence aggrieved by the decision of the Minister to revoke his licence under the provisions of subsection (1) of this section may, within thirty days from the date on which notice of such decision is served upon him, appeal, in accordance with rules of court made under section 41 of The Supreme Court Act, to the Supreme Court, who may, with effect from the date of the making of the order of the Court, reverse the decision of the Minister or confirm it.

Rules with respect to the conduct of business.

7.—(1) The Minister may make rules for regulating the conduct of their business relating to dealing in securities by authorised dealers, authorised agents and holders of licences and, in particular, but without prejudice to the generality of the preceding provisions of this subsection, such rules may make provision for all or any of the following matters, that is to say—

  • (a) for prescribing forms of contracts which may be used in making contracts under the authority of any of the provisions of this Act, and directing that, where any contract is made under the authority of a licence by any person otherwise than in the appropriate form prescribed by the rules, such person shall, for the purposes of the preceding provisions of this Act relating to the refusal and revocation of licences, be deemed to have committed a breach of the rules;
  • (b) for prescribing the books, accounts and other documents which must be kept by any authorised dealer, authorised agent or holder of a licence in relation to any dealing in securities; and
  • (c) for requiring any such person as aforesaid to produce, for inspection by, or by an agent of, the person with whom he has made any agreement by way of dealing in securities under the authority of any of the provisions of this Act, such contract notes and vouchers as may be prescribed by the rules, and to furnish to that person, on demand and on payment of the prescribed fee, copies of entries in books kept by him which relate to the transaction.

(2) A person shall not be guilty of an offence by reason only of a breach of rules made under this section.

Mutual fund schemes.

8.—(1) No person shall, except with the written permission of the Minister, perform or purport to perform within or from within the Bahama Islands, in any capacity whatever, any function relating to—

  • (a) the management or administration of; or
  • (b) the custody or distribution or insurance of any securities or other property of; or
  • (c) the keeping or auditing of the accounts of,

any mutual fund scheme, unless such mutual fund scheme has first been registered by the Minister.

(2) The provisions of subsection (1) of this section shall have effect in relation to a mutual fund scheme notwithstanding that such scheme is organized or established outside the Bahama Islands.

(3) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence and, subject to section 24, liable, on conviction on information, to imprisonment for a term not exceeding two years or to a fine not exceeding one thousand five hundred dollars or to both such imprisonment and fine or, on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred dollars or to both such imprisonment and fine.

(4) The Minister, upon—

  • (a) an application in that behalf made in the prescribed manner;
  • (b) payment of the prescribed fee; and
  • (c) the production of all such documents and information (verified, if the Minister so thinks fit, by statutory declaration) as the Minister may require,

may register a mutual fund scheme for an initial period not exceeding one year beginning on such day as the Minister may determine, so, however, that, upon application made for the purpose in the prescribed manner and upon payment of the prescribed fee, such registration may be renewed by the Minister for a further period of one year, and thereafter for further periods of one year, upon application made, and after payment of the prescribed fee, as aforesaid, successively from year to year if the Minister approves.

(5) Subject to section 10, the Minister may at any time cancel the registration of a mutual fund scheme.

(6) A register of mutual fund schemes registered under this section shall be kept in such manner and in such place as the Minister may approve and shall be open to inspection by members of the public free of charge during office hours.

(7) Every mutual fund scheme in being immediately before the date of commencement of this Act shall be deemed to be a mutual fund scheme registered by the Minister for a period of two months commencing on that date and if, but only if, application for the purpose is made in writing to the Minister before the expiry of that period on behalf of any such scheme as aforesaid, then such scheme shall be deemed to be a mutual fund scheme registered by the Minister until the expiry of a further period of four months immediately following that period or until the prior cancellation of such registration (which prior cancellation the Minister may effect by order made under this subsection, if he is satisfied that the public interest so requires).

(8) Sections 10 and 11 shall not apply in relation to the cancellation of the registration of a mutual fund scheme effected by an order made under subsection (7) of this section.

Certain overseas mutual fund schemes exempt from registration.

9.—(1) The Minister may by order declare any mutual fund scheme organized or established outside the Bahama Islands to be an exempt mutual fund scheme, and any mutual fund scheme so declared shall, for so long as such declaration continues in force, be deemed to be a mutual fund scheme registered by the Minister in accordance with section 8.

(2) Any order made by the Minister under subsection (1) of this section may be expressed so as to declare to be an exempt mutual fund scheme or to be exempt mutual fund schemes any mutual fund scheme or any class or classes of mutual fund schemes approved, registered or otherwise however to the satisfaction of the Minister sanctioned by the Government of any country outside the Bahama Islands or of any state or province of such a country, or by any agency of such a Government, state or province.

(3) The Minister may, subject to section 10, at any time by order revoke a declaration made under subsection (1) of this section if he is satisfied that the public interest so requires.

Representations concerning cancellation of registration of mutual fund schemes.

10.—(1) Before exercising in any case his power to cancel the registration of a mutual fund scheme under subsection (5) of section 8 or to revoke the declaration of such a scheme under subsection (3) of section 9 the Minister shall serve on the manager of the scheme a written notice (at the same time sending a copy thereof to the trustee, if any, of the scheme) that he is considering such cancellation or revocation, setting out, in such manner as the Minister may think fit, the grounds of such proposed cancellation or revocation, and inviting the manager and the trustee, if any, to make to the Minister, within the period of one month from the date of the service of the notice upon the manager, any representations which he or they may desire to make with respect to such proposed cancellation or revocation.

(2) A notice served under subsection (1) of this section may require that such of the functions mentioned in subsection (1) of section 8 as may be specified in the notice shall not be performed in relation to the scheme or shall be performed in such manner, or subject to such conditions or restrictions, as may be so specified; and if the manager or the trustee, if any, of the scheme or any other person performs any function so specified contrary to any such requirement he shall be guilty of an offence and punishable as if found guilty of an offence against the said subsection (1) of section 8.

(3) Any requirement included under subsection (2) of this section in a notice served under subsection (1) thereof shall take effect immediately upon such service and shall continue in force until the expiration of three months from the date of such service or until cancellation of the registration or revocation of the declaration by the Minister or until the Minister in writing notifies the manager that the requirement is cancelled, whichever event shall first occur.

(4) At any time after the expiration of the period of one month allowed by subsection (1) of this section but before the expiration of three months from the date of service of a notice under the said subsection (1) the Minister may by instrument in writing cancel the registration or revoke the declaration, but, before deciding whether or not to effect such cancellation or revocation, he shall take into account any representations made by the manager or trustee as mentioned in the said subsection (1) and, if either of them so requests, afford him an opportunity of being heard by the Minister.

Appeals against cancellation of registration of mutual fund schemes.

11. Any manager or trustee of a mutual fund scheme the registration of which is cancelled by the Minister under subsection (5) of section 8, or the declaration of which to be an exempt mutual fund scheme is revoked by an order made by him under subsection (3) of section 9, may, if aggrieved by such cancellation or revocation, within one month from the date on which notice of such cancellation or revocation is served upon him, appeal in accordance with rules of court made under section 41 of The Supreme Court Act, to the Supreme Court, who may, with effect from the date of the making of the order of the Court, reverse the decision of the Minister or confirm it.

Striking off of companies connected with unregistered mutual fund schemes.

12.—(1) Except with the approval of the Minister—

  • (a) the Registrar General shall not register a company under The Companies Act or The Foreign Companies Act; and
  • (b) no company if already registered under either of the aforesaid Acts shall be entitled to remain so registered,

with a name which in the opinion of the Registrar General suggests that such company is a participant in a mutual fund scheme that is not registered under section 8 of this Act.

(2) Where it is represented to the Minister by the Registrar General that a company is disentitled to remain registered as aforesaid by reason of being in breach of paragraph (b) of subsection (1) of this section, the Minister may direct the Registrar General to serve a notice on the company specifying the breach complained of and requiring the company to show cause within one month why it should not be struck off the register of companies.

(3) If any company fails within one month from the service of a notice under the provisions of subsection (2) of this section to show cause why it should not be struck off the register or to satisfy the Minister that the breach complained of has been discontinued and will not be repeated, then the Minister may in writing direct the Registrar General to strike the company off the register; and the Registrar General shall act accordingly, and thereupon the company shall be dissolved.

(4) Upon the striking off of a company pursuant to this section the provisions of sections 5 to 8 (inclusive) of The Removal of Defunct Companies Act shall have effect in relation to such company as they have effect in relation to a company struck off the register pursuant to that Act, but so that in the application by virtue of this subsection to such a company—

  • (a) of the said section 5, the words “the company was at the time of the striking off thereof carrying on business or in operation, or otherwise” shall be deleted;
  • (b) of the said section 8, the word “Any” shall be deleted and there shall be substituted thereof the words “Subject to the provisions of any order made by the Supreme Court under section 5 of this Act, any”.

Publication of particulars of licence-holders and of mutual fund schemes.

13. The Minister shall cause to be published in the Gazette, at such times as he thinks proper—

  • (a) the names and addresses of all holders of licences and also—
    • (i) in relation to any such holder of a licence who is not a corporation, his nationality or the fact that he has no nationality; and
    • (ii) in relation to any such holder of a licence that is a corporation, the country under the law of which the corporation is incorporated; and
  • (b) the name and principal place of business in the Bahama Islands of any mutual fund scheme registered by the Minister under section 8,

so, however, that the said information shall be published not less often than once a year.

Part III. Company Prospectuses

Approval of prospectuses.

14.—(1) A prospectus shall not be issued in or from within the Bahama Islands by or on behalf of a company or in relation to an intended company unless before the date of its issue—

  • (a) there has been delivered to the Minister for the purpose of securing approval of the prospectus a copy thereof signed by every director or proposed director of the company or by his agent authorised in writing; and
  • (b) approval thereof has been obtained,

nor shall a prospectus offering for subscription securities of a company incorporated or to be incorporated outside the Bahama Islands (whether the company has or has not established, or when formed will or will not establish, a place of business in the said Islands) be issued, circulated or distributed in the said Islands unless before the date of such issue, circulation or distribution the conditions specified at paragraphs (a) and (b) of this subsection have been satisfied.

(2) Every prospectus shall state on the face of it that the prospectus has been approved by the Minister as required by subsection (1) of this section.

(3) It shall not be lawful for any person to issue, circulate or distribute in the Bahama Islands any form of application for, or otherwise to offer to sell to any person in the said Islands, securities of such a company or intended company as is mentioned in subsection (1) of this section unless the form is issued, circulated or distributed with, or the offer is supported by, a prospectus which complies with the requirements of the said subsection (1):

Provided that this subsection shall not apply if it is shown that the form of application was issued, circulated or distributed or the offer was made either—

  • (a) in connexion with a bona fide invitation to a person to enter into an underwriting agreement with respect to the securities; or
  • (b) in relation to securities which were not offered to the public.

If any person acts in contravention of the provisions of this subsection, he shall be guilty of an offence and, subject to section 24, liable, on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding one thousand dollars.

(4) Nothing in this section shall apply to the issue, circulation or distribution to existing members or debenture holders of a company of a prospectus or form of application relating to, or to an offer made to such members or debenture holders to sell, securities of the company, whether an applicant for or an offeree of securities will or will not have the right to renounce in favour of other persons, but, subject as aforesaid, this section shall apply to a prospectus or form of application or offer whether issued, circulated or distributed or, as the case may be, made on or with reference to the formation of a company or subsequently.

(5) Nothing in this section shall limit or diminish any liability which any person may incur under the general law or this Act apart from this section.

(6) If a prospectus is issued, circulated or distributed without having being approved as required by subsection (1) of this section, every person who is knowingly a party to the issue, circulation or distribution of the prospectus shall be guilty of an offence and, subject to section 24, liable, on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred dollars for every day from the date of the issue, circulation or distribution of the prospectus until it is withdrawn in a manner which either is reasonable having regard to all the circumstances of the case or accords with the reasonable directions of the Minister.

Minister may approve prospectuses.

15.—(1) The Minister, upon—

  • (a) an application in that behalf made in the prescribed manner;
  • (b) payment of the prescribed fee;
  • (c) the production of all such documents and information as the Minister may require,

may, if in his opinion the public interest so requires, approve a prospectus or refuse to approve it, and the decision of the Minister in every such case shall be final.

(2) Whenever the Minister has approved a prospectus under this section he shall in writing inform the representative of the company in respect of which the application for approval was made of the fact of approval and the date thereof, and every prospectus issued by or on behalf of a company shall show on its face the date of such approval.

Interpretation of this Part.

16.—(1) In this Part, unless the context otherwise requires the expression—

“company” means a company either formed and registered under The Companies Act or incorporated outside the Bahama Islands;

“prospectus” means any prospectus, notice, circular, advertisement or other invitation offering to the public for subscription or purchase any securities of a company.

(2) Where a company (whether formed and registered under The Companies Act or incorporated outside the Bahama Islands) allots or agrees to allot any securities of the company with a view to all or any of those securities being offered for sale to the public, any document by which the offer for sale to the public is made shall for all purposes be deemed to be a prospectus issued by the company, and all enactments and rules of law as to the contents of prospectuses and to liability in respect of statements in and omissions from prospectuses, or otherwise relating to prospectuses, shall apply and have effect accordingly as if the securities had been offered to the public for subscription and as if persons accepting the offer in respect of any securities were subscribers for those securities, but without prejudice to the liability, if any, of the persons by whom the offer is made in respect of misstatements contained in the document or otherwise in respect thereof.

(3) For the purposes of subsection (2) of this section, it shall, unless the contrary is proved, be evidence that an allotment of, or an agreement to allot, securities was made with a view to the securities being offered for sale to the public if it is shown—

  • (a) that an offer of the securities or of any of them for sale to the public was made within six months after the allotment or agreement to allot; or
  • (b) that at the date when the offer was made the whole consideration to be received by the company in respect of the securities had not been so received.

(4) Where a person making an offer to which subsections (2) and (3) of this section relate is a company or a firm, it shall be sufficient if the document aforesaid is signed on behalf of the company or firm by two directors of the company or not less than half of the partners, as the case may be, and any such director or partner may sign by his agent authorised in writing.

Construction of references to offering securities to the public.

17.—(1) Any reference in this Part to offering securities to the public shall, subject to any provision to the contrary contained therein, be construed as including a reference to offering them to any section of the public, whether selected as members or debenture holders of the company concerned or as clients of the person issuing the prospectus or in any other manner.

(2) Subsection (1) of this section shall not be taken as requiring any offer or invitation to be treated as made to the public if it can properly be regarded, in all the circumstances, as not being calculated to result, directly or indirectly, in the securities becoming available for subscription or purchase by persons other than those receiving the offer or invitation not exceeding twenty-four in number, or otherwise as being a domestic concern of the persons making and receiving it.

Part IV. General Provisions for the Prevention of Fraud

Penalty for fraudulently inducing persons to invest money.

18. Any person who, by any statement, promise or forecast which he knows to be misleading, false or deceptive, or by any dishonest concealment of material facts, or by the reckless making of any statement, promise or forecast which is misleading, false or deceptive, induces or attempts to induce another person—

  • (a) to enter into or offer to enter into—
    • (i) any agreement for, or with a view to, acquiring, disposing of, subscribing for or underwriting securities; or
    • (ii) any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or
  • (b) to acquire or offer to acquire any right or interest under any arrangements the purpose or effect, or pretended purpose or effect, of which is to provide facilities for the participation by persons in profits or income alleged to arise or to be likely to arise from the acquisition, holding, management or disposal of any property other than securities; or
  • (c) to enter into or offer to enter into any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties by reference to fluctuations in the value of any property other than securities,

shall be guilty of an offence and, subject to section 24, liable, on conviction on information, to imprisonment for a term not exceeding seven years.

Restriction on distribution of circulars relating to investments.

19.—(1) Subject to the provisions of this section no person shall—

  • (a) distribute or cause to be distributed any documents, which, to his knowledge, are circulars containing any invitation to persons—
    • (i) to enter into or to offer to enter into any agreement for, or with a view to, acquiring, disposing of, subscribing for or underwriting securities or any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; or
    • (ii) to acquire or offer to acquire any right or interest under any arrangements the purpose or effect, or pretended purpose or effect, of which is to provide facilities for the participation by persons in profits or income alleged to arise or to be likely to arise from the acquisition, holding, management or disposal of any property other than securities; or
    • (iii) to enter into or to offer to enter into any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties by reference to fluctuations in the value of any property other than securities; or
    • (iv) containing any information calculated to lead directly or indirectly to the doing by the recipient of the information of any of the acts mentioned in sub-paragraphs (i) to (iii) of this paragraph; or
  • (b) have in his possession for the purpose of distribution any documents which to his knowledge are such circulars as aforesaid, being documents of such a nature as to show that the object or principal object of distributing them would be to communicate such an invitation or such information as aforesaid; or
  • (c) permit his name or his address in the Bahama Islands (including a postal box address which he has permission to use) to appear in any document (not being a document the distribution of which is permitted by virtue of the provisions of subsection (2) of this section) which to his knowledge is such a circular as aforesaid, whether or not any such circular is being distributed in the Bahama Islands.

(2) Paragraphs (a) and (b) of subsection (1) of this section shall not apply in relation to—

  • (a) any distribution of a prospectus or any issue of a form of application for securities which complies with the requirements of section 14; or
  • (b) any distribution of documents which is required or authorised by or under any Act other than this Act; or
  • (c) any distribution of documents which has been approved in writing by the Minister.

(3) This section shall not prohibit the distribution or possession of any document by reason only—

  • (a) that it contains an invitation—
    • (i) made or given by or on behalf of an authorised dealer or an authorised agent or the holder of a licence with respect to any securities dealing in which by such authorised dealer, authorised agent or licence holder is by virtue of the provisions of section 4 not prohibited by section 3; or
    • (ii) made or given by or on behalf of a corporation licensed under The Banks and Trust Companies Regulation Act, 1965, to carry on trust business with a view solely to interesting prospective clients in the services provided by that corporation; or
    • (iii) made or given by or on behalf of the Government of the Bahama Islands or the Minister or the Bahamas Monetary Authority with respect to any securities of that Government; or
    • (iv) of a kind described in subsection (2) of section 17 as not being made to the public; or
    • (v) made or given by or on behalf of the manager or trustee of a mutual fund scheme with respect to any securities of that scheme; or
    • (vi) made or given to beneficiaries under a trust by or on behalf of a person acting in the capacity of a trustee of that trust; or
    • (vii) made or given with respect to any securities in connexion only with a sale or proposed sale of those securities by auction; or
  • (b) that it contains an invitation or information which a person whose ordinary business or part of whose ordinary business it is to buy and sell any property other than securities (whether as a principal or as an agent) may make or give in the course of buying and selling such property:

Provided that nothing in paragraph (a) of this subsection shall authorise the doing of anything in respect of securities of any mutual fund scheme which is not a registered mutual fund scheme; and nothing in paragraph (b) of this subsection shall authorise any person to do anything in pursuance of, or for the purposes of, any arrangements the purpose or effect, or the pretended purpose or effect, of which is to provide facilities for the participation by persons in profits or income alleged to arise or to be likely to arise from the acquisition, holding, management or disposal of any property other than securities.

(4) Documents shall not for the purposes of this section be deemed not to be circulars by reason only that they are in the form of, or are contained in, a newspaper, journal, magazine or other periodical publication; but a person shall not be taken to contravene this section by reason only that he distributes, or causes to be distributed, to purchasers thereof, or has in his possession for the purpose of distribution to purchasers thereof, copies of any newspaper, magazine, journal or other periodical publication.

(5) A person shall not be taken to contravene this section by reason only that he distributes documents to persons whose business involves the acquisition and disposal, or the holding, of securities (whether as principal or as agent) or causes documents to be distributed to such persons, or has documents in his possession for the purpose of distribution to such persons.

(6) Any person who contravenes this section shall be guilty of an offence and, subject to section 24, liable, on conviction on information, to imprisonment for a term not exceeding two years or to a fine not exceeding one thousand five hundred dollars or to both such imprisonment and fine or, on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred dollars or to both such imprisonment and fine.

(7) If a magistrate is satisfied by information on oath that there is reasonable ground for suspecting that, at any such premises as may be specified in the information, a person has any documents in his possession in contravention of this section, the magistrate may grant a warrant under his hand empowering any police officer to enter the premises, if necessary by force, at any time or times within one month from the date of the warrant, and to search for, and seize and remove, any documents found therein which he has reasonable ground for believing to be in the possession of a person in contravention of this section.

(8) Any document seized under this section may be retained for a period of one month or, if within that period there are commenced any proceedings for an offence under this section to which the document is relevant, until the conclusion of those proceedings.

(9) Where any person is convicted of an offence under this section, the court dealing with the case may make an order authorising the destruction, or the disposal in any other specified manner, of any documents produced to the court which are shown to its satisfaction to be documents in respect of which the offence was committed:

Provided that an order under this subsection shall not authorise the destruction of a document, or the disposal of a document in any other manner, until the conclusion of the proceedings in the matter of which the order is made.

Part V. Miscellaneous

Delegation to Bahamas Monetary Authority of powers under ss. 5 and 15.

20.—(1) The Minister may by instrument in writing delegate to the Bahamas Monetary Authority established under The Bahamas Monetary Authority Act, 1968, the exercise of any power to which this section applies, and any such delegation—

  • (a) may be made subject to such restrictions and conditions as the Minister thinks proper;
  • (b) while in force shall not prevent the exercise by the Minister of the power thereby delegated;
  • (c) may at any time be revoked by the Minister.

(2) Where a delegation is made of a power pursuant to this section—

  • (a) any reference in relation to the exercise of the power by the Minister in this Act or any regulation made thereunder shall be construed accordingly; and
  • (b) any person aggrieved by a decision of the Authority in the exercise of that power may in writing appeal, within fourteen days after receipt of notice of the decision of the Authority, to the Minister, whose decision on such appeal shall be final.

(3) The powers to which this section applies are the power to grant or refuse to grant a licence under section 5 and the power to approve or refuse to approve a prospectus under section 15.

21.—(1) Any authorised officer shall be entitled, on behalf of the Minister, at all reasonable times upon demand—

Access by the MInister to premises, information, etc.

  • (a) to have access to any business premises of any authorised dealer, information, authorised agent, licence holder or any person performing any etc. function relating to the management or administration of, or to the custody or distribution or insurance of any securities or other property of, a registered Bahamian-based mutual fund scheme and to any such securities, property, cash, books, records, vouchers and any other document therein of any such person as aforesaid; and
  • (b) to require any such person, or any employee of any such person, as aforesaid to supply any such information or explanation,

as the Minister may reasonably require for the purpose of satisfying himself, in the public interest, that the provisions of this Act or of any rules or regulations made thereunder are being complied with by that person in the conduct of any part of his business regulated by this Act or by any such rules or regulations.

(2) With the approval of the Minister an authorised officer may in writing authorise any other person to assist an authorised officer in the exercise of his powers under subsection (1) of this section.

(3) An authorised officer or any person authorised under subsection (2) of this section shall not disclose any information obtained by him in the exercise of his functions under this section except in accordance with the directions of the Minister.

(4) Any person who—

  • (a) fails, without reasonable excuse, to comply with any requirement made in the exercise of the powers conferred by subsection (1) or (2) of this section by an authorised officer or any person authorised under the said subsection (2); or
  • (b) being such an officer or such a person authorised as aforesaid, contravenes the provisions of subsection (3) of this section,

will be guilty of an offence and, subject to section 24, liable, on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding one thousand five hundred dollars or to both such imprisonment and fine.

(5) In this section “authorised officer” means any public officer, or any officer of the Bahamas Monetary Authority, authorised by the Minister in writing to exercise the powers conferred by subsection (1) of this section.

False statements.

22. Any person who, in furnishing any information for any of the purposes of this Act or of any rules or regulations made thereunder, makes any statement which, to his knowledge, is false in a material particular shall be guilty of an offence and liable, on conviction on information, to imprisonment for a term not exceeding two years or to a fine not exceeding five hundred dollars or to both such imprisonment and fine or, on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding two hundred and fifty dollars or to both such imprisonment and fine.

Offences committed by corporations.

23. Where any offence under this Act committed by a corporation is proved to have been committed with the consent or connivance of any director, manager, secretary or other officer of the corporation, he, as well as the corporation, shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Limitation on institution of proceedings.

24. Proceedings for an offence under section 3, 8, 14, 18, 19 or 21 shall not be instituted except by, or with the consent of, the Attorney-General:

Provided that this section shall not prevent the arrest, or the issue or execution of a warrant for the arrest, of any person in respect of such an offence, or the remanding, in custody or on bail, of any person charged with such an offence, notwithstanding that the necessary consent to the institution of proceedings for the offence has not been obtained.

Power of Minister to petition for winding up of certain companies.

25.—(1) Notwithstanding the provisions of section 82 of The Companies Act, the Minister shall have power, unless a company to which this section applies is already being wound up by the Court under that Act, to present a petition to the Court for the company to be so wound up if the Court thinks it just and equitable that it should be wound up.

(2) In subsection (1) of this section the expression—

“company to which this section applies” means a corporation incorporated under The Companies Act participating in an investment company scheme;

“Court” has the same meaning as in section 81 of that Act.

Regulations.

26.—(1) The Minister may make regulations generally for the proper carrying out of the purposes and provisions of this Act and may in such regulations make such different provision in respect of different categories of persons, matters or things as he may think fit.

(2) In particular, and without prejudice to the generality of the power conferred by subsection (1) of this section, regulations made under this section may—

  • (a) prescribe forms of application for—
    • (i) the grant and renewal of licences;
    • (ii) the registration of mutual fund schemes and the renewal of such registration; and
    • (iii) the grant of approval of prospectuses under section 15, and the information and documents to be supplied in connexion with such applications;
  • (b) prescribe the fees to be paid in connexion with the making of any such application and on the grant thereof;
  • (c) require the supply by any person, in respect of any licence or any registered mutual fund scheme, of particulars of changes in any information mentioned or referred to in an application for the grant or renewal of such licence or for the registration, or the renewal of the registration, of such scheme;
  • (d) require the supply by any person (whether or not on a periodical basis) of information concerning the accounts of a mutual fund scheme or of the business to which a licence relates;
  • (e) require the notification, by or on behalf of any registered mutual fund scheme, of any disciplinary measure taken against any such category of person connected with such a scheme as may be prescribed by the Government of any overseas country or any agency of such a country having power to regulate dealings in securities in that country;
  • (f) prescribe anything which by this Act (excepting section 7 thereof) is required or authorised to be prescribed.

(3) Regulations made under this section may, notwithstanding the provisions of section 23 of The Interpretation Act, prescribe greater penalties than those specified in the said section 23, so, however, that the maximum penalty that may be imposed by any such regulation shall be a fine of three thousand dollars or imprisonment for a term of twelve months.

Service of notices.

27. Any notice to be served under this Act on any person may be served by post, and a letter containing the notice shall be deemed to be properly addressed to that person at his last-known residence or last-known place of business in the Bahama Islands.

Schedule (Sections 2(1), 21(1)(a))

bahamian-based mutual fund schemes

1. Any unit trust scheme—

  • (a) of which the trustee is either—
    • (i) a corporation incorporated or registered in the Bahama Islands; or
    • (ii) an individual who has a place of business in the Bahama Islands or maintains, or has permission to use, a postal box address therein; or
  • (b) the trust instrument of which was created according to the laws of the Bahama Islands; or
  • (c) of which the manager is either—
    • (i) a corporation incorporated or registered in the Bahama Islands; or
    • (ii) an individual who has a place of business in the Bahama Islands or maintains, or has permission to use, a postal box address therein.

2. Any investment company scheme—

  • (a) any profits or income of which arise from the operation of a corporation incorporated or registered in the Bahama Islands; or
  • (b) of which the manager is either—
    • (i) a corporation incorporated or registered in the Bahama Islands; or
    • (ii) a corporation incorporated outside the said Islands but having a place of business therein; or
    • (iii) an individual who has a place of business in the Bahama Islands or maintains, or has permission to use, a postal box address therein.
*Mr. Stephens is an Assistant Division Chief in the Western Hemisphere Department of the International Monetary Fund and is a graduate of McGill University (Montreal, Canada).Acknowledgement is made to Mr. Brian C. Stuart, who also contributed to the introduction to the Bahamas.
1The original law, No. 3 of 1974, was assented to on April 2, 1974.
2Following the Second Amendment to the Articles of Agreement of the International Monetary Fund, effective April 1, 1978, a member has been free to choose the exchange arrangements that it wishes to apply in accordance with Article IV, Section 2(b). It may, therefore, maintain the value of its currency in terms of the special drawing right or some other denominator excluding gold. Alternatively, it may allow its currency to float. The Bahamas maintains its exchange rate within relatively narrow margins in terms of the U.S. dollar.
3Subsection 1 of section 38 of the Bahamas Monetary Authority Act, No. 27 of 1968, provides:“The Currency Act, 1965, is hereby repealed:“Provided that no contract, document, sale, payment, bill, note, instrument or security for money and no transaction, dealing, proceeding, matter or thing whatsoever related to money or involving the payment of or liability to pay any money, made, executed, signed, entered into, done or had in or in relation to sterling before the coming into force of the said Currency Act, 1965, shall be affected in any way by such repeal.”
4The Second Schedule, which comprises consequential amendments to other Statutes, is omitted from this volume.
5Editor’s insertion.
6Editor’s query: “that.”
1The original law, No. 4 of 109, has been amended by No. 10 of 1944; No. 43 of 1964; No. 65 of 1965; and the Second Schedule to The Central Bank of The Bahamas Act, 1974 (No. 3 of 1973).
2Paragraph 3 of The Existing Laws Amendment Order, 1974, provides:“A reference in an existing law to the Colony meaning thereby the former Colony of the Commonwealth of The Bahama Islands shall be read and construed as a reference to the Commonwealth of The Bahamas.”
3As a consequence of the Second Schedule to The Central Bank of The Bahamas Act, 1974 (No. 3 of 1974), the Interpretation Art (Ch. 1) was amended to provide in section 11A as follows:“11A—(1) In any Act or other instrument having the force of law in The Bahamas a reference to pounds, shillings and pence or fractions of a penny shall be construed as a reference to the equivalent sum in the currency of The Bahamas and for the purposes of this subsection seven shillings shall be deemed to be equivalent to one dollar.“(2) Where any conversion into currency of The Bahamas under the provisions of this section could result in a fraction of a cent, then—
  • “(a) if that fraction amounts to half a cent or more, it shall be regarded as one cent; and
  • “(b) if that fraction amounts to less than half a cent, it shall be ignored.”
4See footnote 3 on page 35.
1Act No. 64 of 1965, as amended by Acts Nos. 20 of 1969 and 15 of 1971, the Second Schedule to The Central Bank of The Bahamas Act, 1974 (No. 3 of 1974), and the Schedule to The Existing Laws Amendment Order, 1974.
2The Existing Laws Amendment Order, 1974, provides in section 3:“A reference in an existing law to the Colony meaning thereby the former Colony of the Commonwealth of The Bahama Islands shall be read and construed as a reference to the Commonwealth of The Bahamas.”
3The First Schedule is omitted from this volume.
4The Second Schedule is omitted from this volume.
5The Existing Laws Amendment Order, 1974, provides in section 5:“Except as provided in this Order, a reference in any existing law to the Legislature or to either Houses thereof shall be read and construed as a reference to Parliament or to the corresponding House thereof established by the Constitution.”
1Act No. 25 of 1948, as amended by the Rate of Interest (Amendment) Act, 1980 and the Second Schedule to The Central Bank of The Bahamas Act, 1974 (No. 3 of 1974).
2As a consequence of the Second Schedule to The Central Bank of The Bahamas Act, 1974 (No. 3 of 1974), the Interpretation Act (Ch. 1) was amended to provide in section 11A as follows:“11A—(1) In any Act or other instrument having the force of law in The Bahamas a reference to pounds, shillings and pence or fractions of a penny shall be construed as a reference to the equivalent sum in the currency of The Bahamas and for the purposes of this subsection seven shillings shall be deemed to be equivalent to one dollar.“(2) Where any conversion into currency of The Bahamas under the provisions of this section could result in a fraction of a cent, then—
  • “(a) if that fraction amounts to half a cent or more, it shall be regarded as one cent; and
  • “(b) if that fraction amounts to less than half a cent, it shall be ignored.”
3See footnote 2 on page 47.
1Act No. 20 of 1913.
1Art No. 18 of 1974.
2Editor’s insertion.
1Act No. 7 of 1936, as amended by Act No. 43 of 1964 and The Existing Laws Amendment Order, 1974.
2The Existing Laws Amendment Order, 1974, provides in section 3:“A reference in an existing law to the Colony meaning thereby the former Colony of the Commonwealth of The Bahama Islands shall be read and construed as a reference to the Commonwealth of The Bahamas.”
1Act No. 10 of 1971, as amended by the Schedule to The Existing Laws Amendment Order, 1974.

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