The Securities Commission of The Bahamas is sending a strong message to unlicensed businesses that are involved in money lending, money broking and cash/pay advances.

Companies that are not licensed with the statutary body have been warned to immediately cease their operations and report to the Inspector of Financial and Corporate Services within 30 days, or face a BSD$75,000 (J$6.4 million) fine.

SCB Acting Chairman and Executive Director Phillip Stubbs said that the move was not in response to a growing number of unlicensed companies, but simply to warn businesses of the consequences they could face if they do not comply.

“The commission became aware that there were a number of operations involved in money lending or money broking and they are not licensed,” Stubbs explained. “Under the FCSP (Financial&Corporate Service Providers) Act, the business that they are carrying out is considered a financial service business and therefore is required to be licensed.

“What we are trying to do is provide notice and provide a means by which they can come in and we could find a way to regularise their positions.”

According to the FCSP Act, financial and corporate service businesses that operate in The Bahamas without a license issued by the SCB will be subject to a BSD$75,000 penalty, and a fine of BSD$1,000 each day the improper practice continues.

The SCB notice published recently in local newspapers only applies to companies that provide cash advance, money broking, money lending and related services. The notice does not apply to licensees of the Central Bank of The Bahamas.

The SCB also warned that persons whose business activities include the promotion of get-rich-quick and Ponzi schemes will be reported to the Police for criminal prosecution and be dealt with to the full extent of the law.

The SCB’s”zero tolerance”stance has already been put into action.

An investigation of a money lending company that was operating without a license revealed that its clients’ funds were at risk, which led to the business being shut down and the owners being arrested and charged in court, according to the SCB.

Companies that are operating without a license should contact the Inspector at the Securities Commission for further details, said the SCB.

Courtesy of the Nassau Guardian