Bank of Jamaica (BOJ) was established by the Bank of Jamaica Act, 1960 and is accordingly a statutory body. The Bank’s various responsibilities, which includes monetary policy authority, being the supervisor of deposit-taking institutions, and regulator of the national payments system and money markets are all therefore governed by a suite of legislation.

Included on this page for ease of reference are some of the legislations impacting the operations of Bank of Jamaica.

Bank of Jamaica does not guarantee that the list of legislation below is necessarily complete or that those uploaded on this website necessarily represent the latest updates.

Principal Legislation

Note: The Building Societies Act was also amended by section 138(2) of the Banking Services Act 2014

 

Microfinance

Credit Reporting

Subsidiary Legislation

Microfinance

Credit Reporting

Licensees also have statutory responsibilities under other pieces of legislation the administration of which reside principally with other competent authorities (e.g. The Jamaica Deposit Insurance Corporation; The Financial Investigations Division; the Department of Public Prosecution):

Other Relevant Legislation

Pending Legislative Changes

The Cooperative Societies Act

This amendment to the Co-operative Societies Act will, among other things, bring credit union cooperative societies under the regulatory ambit of the Minister of Finance and the Public Service and Bank of Jamaica. Accordingly, this Bill includes provisions that will restrict the deposit-taking activities of co-operative societies to those co-operative societies which operate as credit unions. The Bill also contains substantive enhancements to the Co-operative Societies Act which are contemplated by the Ministry of Industry, Investment and Commerce (formerly Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF)), the Ministry with portfolio responsibility for co-operative societies. It is anticipated that this Bill will be presented to Parliament jointly with the proposed Credit Unions (Special Provisions) Act, which contains the substantive prudential requirements to which credit unions will be subject once the aforesaid regulatory regime comes into effect.

The Credit Unions (Special Provisions) Bill

A decision was taken to revise the regulatory legal framework that governs credit unions by creating a stand-alone principal statute which will replace the subsidiary legislation (as Regulations under the Bank of Jamaica Act). The requisite Cabinet submission from the Ministry of Finance & the Public Service (MOFPS) was considered by Cabinet on 01 May 2017 and approved. The Bill contains the framework that was initially proposed as Regulations to bring the operations of credit unions fully under Bank of Jamaica’s prudential supervisory regime. Accordingly, the Bill will cover, among other things, licensing, capital, reserves, prohibited business, remedial and intervention processes as well as define the role of specially authorized credit unions (see Supervisory Responsibility for Deposit-Taking Institutions).

The Financial Institutions Resolution Bill

In October 2017, Cabinet approved drafting instructions for the preparation of legislation to establish a special resolution regime (SRR) for financial institutions.

The proposed legislation will establish an approach to resolution under which non-viable financial institutions which are deemed systemically important can be resolved using administrative mechanisms. The legislation will also include the provisions for the winding up of non-viable financial institutions.

The regime primarily targets those entities whose distress or disorderly failure, because of their size, complexity and systemic inter-connectedness, could cause significant disruption in the wider financial system and to general economic activity. The entity applying the administrative mechanisms under the SRR – the Resolution Authority (RA) – must be able to act quickly and decisively to secure continuity of critical financial services as well as to contain the wider systemic impact of a financial institution’s failure. To achieve these objectives, the RA will have powers to act in a manner that affects contractual and property rights and potentially the amount of any payment shareholders and creditors may receive in resolution.

In addition to administrative mechanisms, the legislation will incorporate modified insolvency rules to be applied to (i) the residual entity after a financial institution has been resolved by the RA; and (ii) financial institutions which are insolvent but whose demise will not cause significant disruption in the wider financial system.

The legislation will also incorporate enabling provisions for a funding framework addressing options to meet the cost of resolving financial institutions.

Due to the complexity of the issues involved, the development of this bill is being overseen by a technical working group pulled from the Financial Regulatory Committee under the BOJ Act and comprising sub-working group teams with representatives from the Ministry of Finance and the Public Service, the Ministry of Industry, Investment and Commerce, Bank of Jamaica, Financial Services Commission and the Jamaica Deposit Insurance Corporation.

Pending Subsidiary Financial Legislation
(Regulations, Rules, Codes of Conduct)

SUPERVISORY RULES

Anti-Money Laundering, Counter Financing of Terrorism (AML/CFT) and Proliferation of Weapons of Mass Destruction Rules.

The international standards on AML/CFT and proliferation (i.e. the revised FATF Recommendations 2013) include a number of enhanced requirements with which countries are asked to comply. These enhanced requirements include the application of a risk- based approach to allow competent authorities to ensure that measures to prevent or mitigate money laundering or terrorist financing are commensurate with the risks identified. The rules also enable such authorities to make decisions on how to allocate their resources in the most effective way. Accordingly, the framework that is implemented should, among other things: –

  1. Maintain the requisite focus on the risks to the system, customers, services (including the business line and products) and the quality of compliance.
  2. Have express triggers for periodic reviews, that is, major events, changes in management or operations;
  3. Ensure that the frequency and intensity of supervision are clearly dependent on risks.
  4. Ensure consolidated supervisory obligations with respect to AML/CFT remain applicable, including the requirement for regulatory co-operation nationally and cross border, including co-operation on a diagonal basis.
  5. Ensure that supervisors have the range of disciplinary and financial sanctions (including the application of administrative fines and the power to revoke and/or restrict or suspend the licence).
  6. Ensure that co-operation and collaboration with local competent authorities can be undertaken.

Proposals for the development of drafting instructions for AML/CFT Supervisory Rules under the Banking Services Act, 2014 and the Bank of Jamaica Act are being developed. These rules will, among other things:

  1. Codify the risk-based examinations and oversight processes pertaining to the AML/CFT oversight functions of Bank of Jamaica.
  2. Outline the areas in the BOJ’s AML/CFT Guidance Notes with which compliance will be expressly mandated and allow BOJ to directly sanction breaches of those requirements. BOJ is currently the competent authority with responsibility for monitoring compliance with the requirements of the Proceeds of Crime Act (POCA) and Terrorism Prevention Act (TPA) for institutions comprising of the following:
    1. DTIs under the BSA;
    2. cambios (Exchange Bureaux);
    3. money transfer and remittance agents and agencies; and
    4. a society registered under the Cooperative Societies Act, which carries out credit union business.

The requirements under the Guidance Notes with which compliance will be expressly mandated pertain to areas regarding:

  1. Risk Based Framework;
  2. Know Your Customer, Know the Transaction Counterparty and Customer Due Diligence;
  3. Special Guidance – UNSEC Resolutions on the Proliferation of Weapons of Mass Destruction;
  4. Special Guidance – Branches and Subsidiaries;
  5. Nominated Officer Regime;
  6. Board Responsibility and Employee Integrity and Awareness;
  7. Compliance Monitoring;
  8. Transaction Monitoring and Reporting; and
  9. Record Keeping

The second draft of the AML/CFT Rules under the BSA have been issued for feedback.

NON-FINANCIAL LEGISLATION

The National Identification Registration Act, 2021

The objects of this Act are to provide for: (i) a system of national identification; and (ii) the administration of the system of civil registration, in conformity with all laws applicable to civil registration, the protection of identity information and other personal data. The administration of the national identification registration system will be undertaken by the National Identification Registration Authority whose functions will include developing policies, procedures and protocols for the creation, management and operation of the National Identification System, including policies, procedures and protocols relating to:
(i) the enrolment of eligible individuals;
(ii) the generation and assignment of a National Identification Number to each enrolled individual;
(iii) the issue of a National Identification Card to each enrolled individual;
(iv) the safe custody and, where required, disposal of all identity information collected or obtained by the Authority or stored in the National Databases; and
(v) the promotion of the use of the National Identification Number and the National Identification Card.

The Authority is also charged with, among other things:

  1. developing appropriate systems and protocols for the security, secrecy, and necessary safeguards for the protection and confidentiality, of the information stored in the National Databases;
  2. monitoring and promoting compliance with this Act and regulations made under this Act and developing public education programmes with a view to promoting such compliance; and
  3. developing policies and protocols for the prevention of identity theft and other instances of fraud with respect to identity information.

Enrolment for a national identification under this Act is voluntary and can be done directly by an individual or on that individual’s behalf. The use and processing of information relating to an individual will be done in accordance with the Data Protection Act. The National Identification and Registration Act was passed in November 2021 and is expected to be brought into effect shortly.

The Data Protection Act, 2020

This Act was passed in June 2020 and seeks to protect Jamaicans from unlawful and/or reckless disclosure of their personal information. The Act sets ‘standards’ for data processing (sections 21 through 31) to ensure that personal data is processed fairly and lawfully, and only where necessary. PART V— Exemptions to Data Protection Standards or to Disclosure to Data Subject Requirements – outlines exemptions that Regulators should be able to rely on as not limiting their ability to undertake their statutory regulatory functions and ability to cooperate with domestic authorities and international counterparts.

The Minister of National Security can also issue a certificate of exemption from any of the standards or disclosure to data subjects requirements in order to safeguard national security (see section 33). The Minister’s powers in this regard can be appealed by application to the court for judicial review on the grounds on which the certificate was issued.

The Act will be brought into effect on a phased basis. Responsibility for implementation and administration of the Act will fall under the Ministry responsible for information and communications technology.