The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Top private banking executives yesterday praised the Bahamas’ “terrific” response to international regulatory initiatives, explaining that compliance with these was “key” to their institution’s long-term presence in this nation.

Marc Lopez, Lombard Odier’s group managing director, told Tribune Business it was “crucial” for the Bahamas to commit to future standards, such as the OECD’s automatic tax information initiative, to retain his and other ‘blue chip’ financial institutions.

Bur Mr Lopez, who is also a member of Lombard Odier’s private clients management Board, indicated that he was especially impressed that the Bahamas - in agreeing to comply - was also seeking to safeguard the future viability of its financial services industry.

He referred especially to the Bahamas’ recent agreement to adopt the OECD’s automatic tax information exchange standard from 2018 onwards, but not the method to implement this.

Ryan Pinder, minister of financial services, recently explained to Tribune Business that the Bahamas had committed to the standard, but not the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

This, he said, would have imposed “impossible obligations” on the Bahamas from a cost and administrative perspective by requiring this nation to instantly exchange tax information on a multi-country basis.

And signing on to the Multilateral Convention might have required the Bahamas to exchange sensitive client-related data with countries that do not safeguard its privacy, placing financial services customers and their families in potential danger.

While not referring to these specifics, Mr Lopez said both he and Lombard Odier were “very encouraged” that the Bahamas was attempting to “adapt” automatic tax information exchange - and the method for doing so - to its own business model.

“We’re very happy and comfortable with the direction the Bahamas has taken in terms of the US FATCA, as it was signed recently, and recent developments with the OECD,” Mr Lopez told Tribune Business.

“I think it’s terrific that the Bahamas knows how important the banking industry is for the Bahamas, is being proactive and coming to the OECD with ways to work with the OECD, meet the standard of the OECD, but also to discuss how to adapt it to the Bahamas.

“It is very encouraging, very good for the Bahamas to have taken the initiative, with the Ministry of Financial Services being so proactive,” Mr Lopez added.

“It’s a good base of discussion: We intend to comply with international standards, but at the same time see how we can make it work for the Bahamas as a financial centre.

“We are very pleased with the step the Bahamas took in the last two weeks, the inking of the OECD standard. This is completely in line with the way we operate as an institution. We are pleased to see the Bahamas grow in that direction; it’s a good match for us.”

Mr Lopez’s remarks effectively amount to an endorsement of the Bahamas’ approach to coping with the multitude of international regulatory initiatives it has faced over the past decade.

The Government, since the 2000 ‘blacklisting’ by the Financial Action Task Force (FATF), has sought to strike a balance in its policy responses to the likes of the OECD - complying with agreed international standards, but all the while safeguarding the financial services industry’s competitive position.

Mr Lopez emphasised that compliance with international standards was “key” for an institution such as Lombard Odier, when it came to determining which jurisdictions it would have a physical presence in.

“For us, it is crucial,” he told Tribune Business, “because, as you’ve seen, when we decided to operate in the Bahamas, we are still here after 35 years.

“We want to do things over the long term, which is how our business is built.”

Mr Lopez said the global trend towards global financial services transparency was only likely to “grow and accelerate”.

He added: “We are glad to operate from a jurisdiction like the Bahamas, which wants to comply with that future international standard. We are thrilled to be here for that reason alone.”

Christophe Hentsch, Lombard Odier’s managing partner, told Tribune Business it was “easier” for institutions such as his to operate from countries like the Bahamas, because its regulatory authorities provided the necessary support to assist the private sector in adapting to the change.