Sabrina N. Gordon, Business Reporter
Anya Schnoor, president of the Jamaica Securities Dealers Association, and CEO of Dehring Bunting & Golding.
The Jamaica Securities Dealers Association (JSDA) has come out in support of the proposal for a single financial regulator, but says the Bank of Jamaica (BoJ) is not the right entity for the job.
The island's bankers also see merit in the suggestion, saying it would rid the system of duplications in areas where the two regulators now straddle each other's portfolio.
The proposed entity, said JSDA president, Anya Schnoor, should be independent of the central bank.
"The JSDA would support the concept of a single regulator as this would create efficiencies in the regulatory process and improve communication," said Schnoor.
"We would, however, suggest that the regulator be independent of the central bank and would be similar to the model adopted in England."
In the United Kingdom, over-sight falls to the Financial Services Authority (FSA), a non-governmental organisation that came about in 1997.
The agency is funded by the industry itself.
In addition, there is a tripartite structure for overseeing the U.K. financial system, with distinct roles for the treasury, the Bank of England and the FSA.
Within this system there is a single independent regulatory body for the banks and the securities industry, which is the model the JSDA is keen on seeing adopted.
"The central bank should primarily focus on monetary policy," said Schnoor.
Full oversight
She was reacting to the proposal floated by BoJ governor Derick Latibeaudiere that the Financial Services Commission be incorporated within the BoJ as a unit, giving the central bank full oversight of the financial system.
The FSC regulates securities, pension and insurance industries, while the BoJ oversees the banking system.
However, their jobs often coincide given the BoJ's res-ponsibility for merchants banks and trust companies, some of which are owned by securities companies, while some securities businesses are owned by the banks, leading to the Jamaica Bankers' Association's comment that a single overseer would rid the system of duplications.
Given the number of diverse players operating within 'limited economic space', said the JBA - whose current president is group managing director of National Commercial Bank, Patrick Hylton - a single regulator would provide a stable and protective environment for customers.
"The JBA recognises that there is no single 'blueprint' for a single regulator," said the JBA secretariat in response to Wednesday Business queries.
"Therefore, we support a model where the regulator is equipped to bolster the integrity of the financial system and one which provides the proper framework for accountability."
Schnoor said that any new regulatory body must understand the nuances of the various sectors, and approach each with a different mindset.
The JSDA president, for example, is CEO of investment bank Dehring Bunting & Golding, which was acquired last year by Jamaica's largest commercial banking group, Scotiabank.
Sole regulator
DB&G absorbed the investment arm of Scoatiabank Jamaica earlier this year in a move by the bank to unbundle its investment business from its banking operations.
But DB&G continues to own its own merchant bank, which operates under licence from the BoJ.
The JSDA is itself proposing that a sole regulator must be made accountable to an independent board to guard against political influence.
sabrina.gordon@gleanerjm.com
Patrick Hylton, president of the Jamaica Bankers Association and group managing director of National Commercial Bank.
Derick Latibeaudiere, governor of the Bank of Jamaica, mooted the idea for the central bank to become sole regulator of the financial sector at an October 10-13 meeting of regional central bankers, in Montego Bay. - File photos
