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Clarke: Finance Ministry received FSC report on SSL in April 2020, never came to his attention

Finance Minister Dr Nigel Clarke has disclosed that his office received a report from the Financial Services Commission (FSC) on the fraud-hit Stocks and Securities Limited (SSL) in April 2020.

But he said it was never brought to his attention.

Dr Clarke, writing in Saturday’s Gleaner newspaper, revealed that, hours after his policy address on Monday, an official in the Financial Services Commission's management told him that the commission sent a copy of a report to his office. 

Under the FSC's law, the agency is required to examine the affairs of entities that it regulates at least once per year, and after that submit a report to the minister within 90 days.

Dr Clarke said the SSL report, dated June 25, 2019 was found during a search of his office on Tuesday. It was sent by the FSC to the Ministry of Finance & The Public Service on April 3, 2020 and stamped "received" by his office on April 15, 2020.

That report was generated following an onsite visit of SSL in June 2019.

According to the Finance Minister, the report did not contain a history of the FSC's regulatory actions against SSL although it included breaches worthy of the recommendation that the FSC meet with the board of SSL to address liquidity issues at SSL.

The report also included a recommendation that SSL be issued immediately with regulatory directions in order to have the issues resolved in a timely manner.

At least 40 investors have been fleeced of what could be billions of Jamaican dollars in an alleged fraud scheme at the financial institution.

Dr Clarke said recommendations from the Financial Services Commission's 2019 report on Stocks and Securities Limited were implemented by the agency's board. He noted that the recommendations and approved directives were issued to SSL on October 25, 2019, almost six months prior to his office receiving a copy of the report.

He said the FSC board implemented directives that were more extensive than those recommended in the report in both scope and detail.

According to him, a later FSC status update confirmed that SSL was compliant or largely compliant with five of the six FSC board mandated directives by April 25, 2020, days after his office received the report.

Dr Clarke insists that the FSC has brought matters of concern or that require his input, to his attention many times in the past. SSL was never among them, he noted.

The Finance Minister has asserted that upcoming regulatory reforms must address some of the impracticalities and ambiguities in the Financial Services Act. Among them are provisions in the FSC's law which require yearly assessment of almost 500 regulated entities and the reports sent to the minister.

Dr Clarke said over its 22 years of existence the FSC has not operated in that manner.