International Financial Centres in the Post-Covid World

Proshare

Wednesday, February 03, 2021 / 10:07AM / OpEd by Elise Donovan / Header Image Credit: BVI Finance


Proshare Nigeria Pvt. Ltd.

 

IFCs such as BVI have proved to be an integral element in keeping the wheels of the global economy turning during the pandemic.

 

International financial centres (IFCs) play a fundamental role in the global economy. Historically, they have helped to facilitate cross-border business, enabling an easy and effective flow of assets around the globe - and in so doing, have had a critical part to play in the growth of major economies such as China. Over the years, these destinations have become ever more sophisticated and specialised. Today, IFCs cater to a wide range of international customers - from start-ups and family offices to multinational banks; they also provide an array of services such as asset management and protection, tax planning, access to capital and insurance.

 

Among the IFCs, the British Virgin Islands (BVI) has emerged as a leading financial centre. It has repeatedly proven its resilience, having overcome its fair share of challenges both natural and geopolitical. Not only has the BVI developed a culture of innovation in order to overcome barriers, it has also achieved a strong and practical sense of preparedness.

 

Throughout the coronavirus pandemic, the BVI's robust digital and technological infrastructure enabled its financial services to continue to engage with clients and ensure business continuity at a critical time. Going forward, this will become an important factor as governments around the world try to rebuild their economies after the effects of the pandemic. Although many countries have already responded with unprecedented fiscal support for their private sector, this is only effective in the short term; a strong and sustainable recovery from the pandemic will depend on supporting businesses to consolidate and thrive, and this is where IFCs like the BVI are especially well-placed to support.

 


Proshare Nigeria Pvt. Ltd. 

 

Reliable and Trusted Destinations

IFCs provide an optimal environment for businesses to thrive, one that is characterised by stability and jurisdictional neutrality. This is a key factor in easing cross-border business as clients can efficiently set up new structures that are recognised globally. For example, in the BVI, where the legal system is based on English common law, businesses can be confident that they are supported by a robust and reliable legal framework that provides strong shareholder protection and is compatible with other international contracts. Coupled with a mature legal system that provides expert assistance and important economic incentives such as efficient administrative costs and tax neutrality, IFCs are designed to foster growth and prosperity. This is a hallmark of most leading IFCs, which have built a business-supportive environment with specialised institutions and systems to help businesses grow. 


Proshare Nigeria Pvt. Ltd. 

 

Compliance and Innovation

However, providing a truly business-friendly environment also hinges on having a fully compliant and robust regulatory framework - one where good governance is actively enforced, and businesses can operate with full confidence in the legitimacy of the institutions. Those within the industry recognise that having a strong track record of effective regulation is essential to qualify as a leading IFC, and to have a meaningful and positive contribution to the global economy.

 

The BVI has adopted a range of measures to bolster its regulatory regime such as the OECD's Common Reporting Standard (CRS). It is also compliant with the recommendations of the Financial Action Task Force (FATF) on anti-money laundering and counter-terrorist financing - the global standard for combating financial crime and money laundering. The BVI was also one of the first jurisdictions to introduce anti-money laundering (AML) legislation in 1999; it has implemented comprehensive AML laws and has adopted stringent rules in know-your customer (KYC) due diligence, consistent with the FATF.

 

At a domestic level, the BVI is regulated by the British Virgin Islands Financial Services Commission, which serves as an autonomous regulatory authority responsible for the regulation and inspection of all financial services in the jurisdiction. One standout feature of the BVI's active pursuit of good governance and regulation is its Beneficial Ownership Secure Search system (BOSSs). Developed in 2017, BOSSs is a cloud-based and de-centralised platform which uses the highest levels of security and encryption to hold verified data on companies incorporated in the BVI. And while it is commercially private, the data on the platform can be shared with international law enforcement. This is a robust and internally compliant regime which has been praised by prominent law enforcement authorities, like the UK's National Crime Agency and was integral to disclosing information that warranted the UK's first Unexplained Wealth Order (UWO), obtained by the NCA in 2018.

 

However, the debate around publicly accessibly registers is far from resolved. Though the discussion risks becoming highly politicised, what is clear is that greater and more comprehensive dialogue and cooperation is needed between industry, policy makers and regulators to produce an effective, global solution.

 

 

Proshare Nigeria Pvt. Ltd. 


 

Growth in FinTech

In addition to adopting global standards that encourage good governance, the BVI, like many IFCs, is also actively investing in its own digital and regulatory capabilities. As a result of the pandemic, we have seen the importance and urgency to provide the right regulatory environment for crypto-currencies and other digital technology, which have enabled deals, transactions and other financial activities to continue.

 

Over the years, many IFCs had already invested in regulatory innovation to encourage greater activity. However, in August last year, the BVI launched its Fintech Regulatory Sandbox, a test bed to enable fintech businesses to conduct live-testing and improve its models before they launch. Unlike similar initiatives in other countries, the BVI Sandbox is designed to host firms and projects for up to 18 months, giving more opportunity for developers to hone their product, build experience and scale. This light-touch approach to regulation is helping to stimulate innovation and leverage technology in ways that improve business processes.

 


Proshare Nigeria Pvt. Ltd. 


 

The Future and Beyond

It is this constant drive to innovate and produce market-leading solutions, alongside its strict adherence to global standards, which sets the BVI apart as a leading financial centre. IFCs continue to play a major role in the global economy - their commitment to international cooperation and adhering to regulatory standards have ensured their relevance and attraction. The BVI's reliable institutions and culture of compliance are important magnets for businesses and means the BVI is well equipped to help them grow, raise funds and attract investment. This is now more critical than ever as the pandemic has had a profound impact on the world economy. By working alongside and supporting businesses, IFCs can play a pivotal role in the recovery of major economies worldwide in the coming years.

 

 

Credits

The post International Financial Centres in the Post-Covid World by Elise Donovan, Chief Executive Officer of BVI Finance first appeared in Cfi.co newsletter on Tuesday, February 02, 2021.

 

Proshare Nigeria Pvt. Ltd.  


Related Links 

  1. Statement by US SEC Acting Chair and Commissioners Regarding Recent Market Volatility
  2. IMF: SSA Recovery To Trail Global Average
  3. GameStop and Ongoing US Market Volatility - SEC, Analysts React
  4. Federal Reserve Issues FOMC Statement - Jan 2021
  5. SSA Monetary Policy in 2021: Will The Dovish Way Be Sustained?


Proshare Nigeria Pvt. Ltd. 

 

Most Recent Market Reports & Reviews

1.          Outlook 2021: Understanding the Mega Trends of a Crucial Year for an Economy - Jan 28, 2021

2.         The Nigerian Capital Market Report 2020: Leveraging a Crisis - Jan 28, 2021

3.         CBN Chairs Nigeria Commodities Exchange Repositioning Committee - A Note - Jan 29, 2021

4.         Oil and Gas: Taking a Peek at the Pump Well

5.         The Oil Market, 2020 Black Swan, and A Third Virus Wave

6.          AFEX 2020 Review and 2021 Outlook: Nigerian Commodities Space Not Immune to the Impact of COVID-19

7.          NESG v CBN: Beyond the Battleground - The Need for Facts, Perspective and Resolution

8.        CIBN 2021 Outlook Forum: Experts Discuss Implications of Policies on Businesses in Nigeria

9.         Norrenberger Nigeria Outlook 2021: Seizing the New Reality

10.     Nigeria Economic Outlook 2021: The Year Ahead - Inflection, Reflation and Destitution

11.      Nigeria: 2021 Full Year Outlook - Awaiting Dawn

12.     Bracing for a Different Future - Meristem Annual Outlook 2021

13.     2021 Economic Outlook - Light at The End of The Tunnel

14.     Negative Outlook for Sub-Saharan African Sovereigns as Debt Costs Will Intensify Post Pandemic

15.     The Nigerian-British Chamber of Commerce 2021 Economic Outlook

16.     Q1 2021 FX Outlook: Risk-on Stages a Comeback

17.      Nigeria Economic Outlook 2021: A Shot at Recovery

18.     2021 Outlook - Is the Tunnel Getting Darker or Brighter

19.     Nigeria in 2021: Positioning in the New Normal

20.    Nigeria 2021 Outlook - Navigating Unsteady Terrain

21.     Nigeria FY 2021 Macroeconomic Outlook - A Break in the Clouds

22.    Nigeria 2021 Outlook: COVID-19 Recession and the Long Road to Economic Recovery

23.    Moody's - Nigeria's Deficit and Debt to Stay High After Coronavirus and Oil Shocks

 


Proshare Nigeria Pvt. Ltd. 

Proshare Nigeria Pvt. Ltd. 

 

Proshare Nigeria Pvt. Ltd. 


Proshare Nigeria Pvt. Ltd. 

 

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP