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BMA refutes conflict of interest claim

The Bermuda Monetary Authority is challenged by the claim of a conflict of interest

The Bermuda Monetary Authority has dismissed the claim that it could face a conflict of interest over its investment policy.

The suggestion is that recent changes now allow the BMA to invest in companies it regulates, thereby raising a conflict of interest.

But the BMA said it had no intention of making any such investments.

An article in an online publication challenged the regulator over what it labelled “a decision that has raised more than a few eyebrows in Bermuda’s financial world”.

The article in March by “teh islander” on Medium.com is headed “Regulatory Roulette: Why Allowing BMA to Invest in Companies It Regulates Spells Trouble”.

A sub-head reads: “Unravelling the Conflicts of Interest in Bermuda’s Financial Landscape“.

The Royal Gazette first asked the BMA for comment last month. But today a statement indicated where it stood.

The article said: “The Bermuda Monetary Authority has now been granted the ability to invest in companies it regulates. Yeah, you heard that right — our financial watchdog is getting cosy with the very companies it’s supposed to keep in check.”

The report said the BMA can participate in share ownership of the very companies it regulates.

But today the BMA said: “The BMA does not invest in entities that we regulate and there is no intention to change this policy, as not to create a conflict of interest.”

The article had stated: “The BMA’s independence and objectivity could be compromised, leaving us all to wonder whether the organisation can still do its job effectively.”

It warned: “If the BMA is both a regulator and an investor, these companies may find themselves in a precarious position. Are they getting a fair shake, or are they being swayed by the BMA’s vested interests? The possibility of preferential treatment or leniency in regulation can’t be ignored, and that’s a problem for everyone involved.”

The editorial proposes a solution: separating the BMA’s regulatory duties from its investment interests.

An example, it suggested, would be to establish a separate, independent body responsible for managing the BMA’s investments.

“This would allow the BMA to focus on its core mission: ensuring a fair and stable financial landscape for Bermuda.”

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Published May 04, 2023 at 7:43 am (Updated May 05, 2023 at 7:21 pm)

BMA refutes conflict of interest claim

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