FINANCIAL INSTITUTIONS ACT

ARRANGEMENT OF SECTIONS

PART I
Preliminary

   1   Short title

   2   Interpretation

 

PART II
Licensing

   3   Restriction on carrying on the business of accepting deposits

   4   Licences

   5   Alteration of memorandum and articles of association

 

PART III
Capital and reserves

   6   Minimum capital requirements

   7   Instruction on foreign government holdings in licensees

   8   Reserve fund

 

PART IV
Restrictions on Deposit Taking Business

   9   Maximum deposit liabilities

   10   Limit on fixed assets of licensees

   11   Persons debarred from management of licensees

   12   Restriction on period of deposits

   13   Prohibited business

 

PART V
Cash Reserves and Liquid Assets

   14   Cash reserve

   15   Liquid assets

 

PART VI
Returns and Accounts

   16   Returns

   17   Loss reserves on credit facilities

   18   Presentation and publication of balance sheet and profit and loss account

   19   Consolidated accounts of licensees and affiliated companies

      Duty of auditors to report to Supervisor on transactions, etc affecting licensee's financial viability

   19B   Expanded audit

 

PART VII
Regulation and Control of Licensees

   20   Regulation of shareholding in licensees

   21   Regulation of controlling interest in licensees

   22   Power to obtain information re shareholding

   23   Power to restrict dealing in specified shares

   24   Appeal against restriction notice

 

PART VIII
Regulation against Unsafe Practices

   25   Actual or apprehended insolvency

      Licensee ceasing to be viable

   25B   Vesting of licensee's shares, etc in Minister

   25C   Effect of vesting order

   25D   Restructuring transactions

   25E   Winding up or Scheme of Arrangement

   25F   Notice re compensation

   25G   Application of sections 25A to 25F

   25H   Determination of compensation

   25I   Application to court

   25J   Revesting of shares and subordinated debt

   26   Winding up of-foreign licensee

   27   Obligation of manager to supply information

   28   Resignation etc of auditor

 

PART IX
Supervision and Examination of Licensees

   29   Functions of Supervisory Department under this Act

      Special audit or examination of licensee

   29B   Supervisory Departement to have access to bookds, etc of holding company

   29C   Supervisor may require information

   29D   Restructuring of ownership of licensee

   29E   Ownership of subsidiaries by licensee

   29F   Supervisor may issue directions re risk

   29G   Management or investment of client's funds

   30   Powers of inspection

   31   Protection of auditor

 

PART X
Winding Up of Licensees

   32   Restriction on voluntary winding up

 

PART XI
Amalgamation and Transfers

   33   Amalgamation and transfer

   34   Statements relating to amalgamation or transfer to be deposited with Minister

 

PART XII
General

   35   Vesting of assets on sale of licensee

   36   Transfer of trust business

   37   Effect of transfer and vesting order

   38   Regulations

   39   Restrictions on loans on the security of land

   40   Unclaimed moneys

   41   Fraudulent inducement to invest

   42   Offences and penalties

      Penalties

   43   Publication of orders

   44   Secrecy of licensee officials

   45   Transitional

      SCHEDULES

 

THE FINANCIAL INSTITUTIONS ACT

[Date of Commencement: 31st December, 1992]

Acts
16 of 1992,
27 of 1997,
10 of 2002,
38 of 2004,
27 of 2010.

PART I
Preliminary
(sections 1-2)

1   Short title

   (1) This Act may be cited as the Financial Institutions Act.

   (2) This Act shall not apply to-

   (a)   the Bank of Jamaica

   (b)   any commercial bank;

   (c)   the Jamaica Mortgage Bank,

   (d)   any statutory body;

   (e)   any society registered under the Building Societies Act, the Co-operative Societies Act, the Friendly Societies Act or, the, Agricultural Credit Board Act or any co-operative arrangement for savings among individuals; or

   (f)   any insurance company registered under the Insurance Act.

2   Interpretation

   In this Act-

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

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

   "authorised officer" has the same meaning as in the Bank of Jamaica Act,

   "bank" means a commercial bank as defined in the Bank of Jamaica Act;

   "capital base" in relation to a licensee means-

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

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

[27/1997 s 2(a).]

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

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

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

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

[38/2004 s 2 (a).]

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

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

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

   ''deposit" means a sum of money paid on term-

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

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