The Saint Vincent and the Grenadines Financial Services Authority (SVG) has recently requested that existing foreign exchange brokers registered in the island country present certified copies of the necessary permits from the jurisdiction or authority in which they conduct business activities.

Currently, non bank financial services regulatory agencies require potential foreign exchange brokers who wish to register or establish in Caribbean countries to provide the same license as regulatory agencies in the jurisdiction where their business activities are conducted.

The SVG market regulatory agency disclosed these conditions in notifications to registered agents and trustees. The notice is titled 'Requirements for Commercial Companies (BC) and Limited Liability Companies (LLC) Engaged in Foreign Exchange Business Activities'. This notice is signed by the BC and LLC registrations of regulatory agencies.

SVG stated that the new policy is a response to the sharp increase in the frequency and quantity of fraud complaints and accusations against the foreign exchange trading company and offshore brokers. In addition, regulatory authorities have condemned the "potential adverse impact" of this trend on Saint Vincent and the Grenadines' reputation as an international financial center.

The regulatory agency explained, "Failure to comply with these requirements will result in sanctions being imposed on these companies under the Financial Services Authority Act

In addition, regulatory authorities urge registered agents and trustees to "continue to adopt sound anti money laundering/counter-terrorism financing practices, ensuring that when accepting clients (directors, shareholders, and beneficiaries) who wish to register/establish a company in Saint Vincent and the Grenadines, sufficient screening measures and appropriate due diligence measures are taken on a risk sensitive basis

How will the new policy affect Saint Vincent's foreign exchange trading?

Chris Rowe, a fintech consultant in the UK, said: 'The new policy is a clear message from regulatory authorities that they only hope that foreign exchange businesses that are already regulated in stricter jurisdictions can apply for licenses. The question in the future is: how many of these regulatory authorities will follow suit?'

Tom Higgins, the founder and CEO of Gold-i, also believes that SVG is moving in the right direction because "no one wants fraudulent foreign exchange brokers".

Higgins said, "For any global industry, regulatory requirements are very different in different regions of the world, which is always not good, so it is only a matter of time before SVG takes this action