Bahamas - Efficient Capital Markets and Portfolio Investment Bahamas - Capital Markets
The free flow of capital to markets is encouraged by the GCOB and supported by the functions of the Central Bank of the Bahamas. The Bahamas is an Article VIII member of the IMF and has agreed not to place restrictions on currency transactions, such as payments for imports. The Bahamas Securities Commission regulates the activities of investment funds, securities and capital markets. (www.scb.gov.bs)
There are no legal limitations on foreigners’ access to the domestic credit market, and credit is available on market terms through commercial banks. Bahamian-foreign joint venture businesses are encouraged by the government and are eligible for financing both through commercial banks and the Bahamas Development Bank (http://www.bahamasdevelopmentbank.com/). The government has also announced plans to establish a credit bureau to operate as a public-private partnership between the Central Bank and the Financial Services Board. Once operational, the credit bureau is expected to address local access to credit.
Money and Banking System, Hostile Takeovers
The financial sector of The Bahamas is highly developed and dynamic, providing a wide array of services by several types of financial intermediaries. The Central Bank of The Bahamas, the Securities Commission, Insurance Commission, Inspector of Financial and Corporate Service Providers, and the Compliance Commission are the regulatory bodies of the financial sector which consists of savings banks, trust companies, offshore banks, insurance companies, a development bank, a publicly controlled pension fund, a housing corporation, a public savings bank, private pension funds, cooperative societies, credit unions, commercial banks, and the state-owned Bank of The Bahamas – which dominate financial intermediation. The Securities Commission also regulates The Bahamas International Securities Exchange (BISX), and a Central Bank supervision department ensures that banks comply with capitalization and reporting requirements.
According to the Central Bank report for January-June 2015, the Bahamian financial sector, which represented approximately 25% of the country’s GDP in 2015, encompasses over 400 –banks and non-banks (such as insurance companies and credit unions) and employs in excess of 6,500 individuals. (www.centralbankbahamas.com). As of June 2015, there were 252 licensed banks and trust companies, 84 of which were offshore banks. In the domestic banking sector, four of the eight onshore commercial banks are subsidiaries of Canadian banks, three are locally owned, and one is a branch of a U.S.-based institution. Limited banking services are available on some of the less populated islands.
Foreign exchange controls prohibit international banks from investing in domestic securities, and they generally are not permitted to hold Bahamian dollar balances except for the purpose of facilitating the payment of local expenses. Foreign investors seeking to open a non-Bahamian currency-designated account in one of the commercial banks in the country must first register and receive approval from the Central Bank. (www.centralbankbahamas.com)