QUALIFYING CRITERIA FOR PERSONS/ENTITIES WISHING TO APPLY FOR CLASS “B” INTERNATIONAL BANKING LICENCE

St. Lucia Guide

Background

The International Banks Act No.43 of 1999 makes provision for persons to apply for an international banking license known as a class ”B” international banking license. Class “B” banking license is restrictive in that the Minister may impose any conditions and a further restriction that the licensee shall not receive or solicit funds by way of trade or business from persons other than those listed in any undertaking accompanying the application. Notwithstanding its restrictive nature, it is important that we establish the criteria that are to be applied to persons and entities wishing to apply for class ”B” international banking license. The criteria are similar to that provided for class “A” license with a few exceptions.

Advantages of Establishing Qualifying Criteria

In establishing the qualifying criteria the following advantages will be obtained:

1.the processing of applications will be undertaken against clearly defined criteria and should result in a more precise and efficient process;

2.this will reduce the number of instances where service providers submit unsuitable applications for consideration;

3.with a smaller but enhanced quality of applications, the FSSU will be able to redeploy its resources more meaningfully in the process of supervising the financial sector.

4.the narrowing of our focus should increase the probability of Saint Lucia maintaining its record as a quality, well respected offshore domicile.

Qualifying Criteria

Having regard for the above, the following are Saint Lucia’s qualification criteria for international bank applications – class “B” . Applications will be entertained from the following:

  1. Well established international banks or financial institutions as well as branches /subsidiaries and affiliates of such international banks or financial institutions with a proven track record and which are subject to effective consolidated supervision. In the case of such applicants, the written outward authorization of the parent supervisory authority is required. When notification is provided that the application meets the requirements for licensing, capital must be put in place before the actual licence is issued. Therefore, an undertaking that capital will be put in place is not sufficient;

  2. Wholly-owned subsidiaries of well-established international non-bank corporations where the operations are consolidated in the published financial statements of the parent company. When notification is provided that the application meets the requirements for licensing, capital must be put in place before the actual licence is issued. Therefore, an undertaking that capital will be put in place is not sufficient. Deposit undertaking will only be allowed for “related” third parties i.e. subsidiaries, affiliates. Depending on the risk element of the banking business, the Minister may require the licensee to effect a policy of insurance as provided in section 52 of the International Banks Act No. 43 of 1999.;

  3. Wholly-owned subsidiaries of well-established non-bank corporations that have an existing client base and where a banking licence would complement the services/products that are presently being offered to the client base. When notification is provided that the application meets the requirements for licensing, capital must be put in place before the actual licence is issued. Therefore, an undertaking that capital will be put in place is not sufficient. Deposit undertaking will only be allowed for “related” third parties i.e. subsidiaries, affiliates. Depending on the risk element of the banking business, the Minister may require the licensee to effect a policy of insurance as provided in section 52 of the International Banks Act No. 43 of 1999;

  4. Individuals of high/significant net worth and good reputation. The prospective owners must submit audited net worth statements from a qualified auditor/accountant. Applicants must provide evidence that they are adequately experienced in the financial/banking sector or be able to satisfy the FSSU of their ability to access the required skill set and quality management. Further, registered agents will be required to submit evidence to the FSSU that they have carried out the necessary due diligence checks on the prospective individuals in which beneficial ownership rests. When notification is provided that the application meets the requirements for licensing, capital must be put in place before the actual