Edmond Campbell, News Coordinator

Don Wehby (left)), Minister without Portfolio in the Ministry of Finance and the Public Service, speaks with journalists during yesterday's post-Cabinet press briefing at Jamaica House, St. Andrew, while Olivia Grange, Minister of Information, Culture, Youth and Sports, looks on. - Rudolph Brown/Chief Photographer

Cabinet has thrown its support behind the Financial Services Commission (FSC) after examining the controversial treatment of investment schemes.

However, Don Wehby, Minister without Portfolio in the Ministry of Finance and the Public Service, yesterday left room for amendments to law which could pave the way for such schemes to operate legally and flourish.

Minister Wehby said during a post-Cabinet press briefing at Jamaica House, that the FSC would continue to take action as set out in law to prevent entities from offering securities to persons in contravention of the Securities Act.

Minister Wehby said the FSC would continue to issue cease-and-desist orders against unregulated financial schemes, while the Financial Investigation Division (FID) would provide support by instituting prosecution where necessary.

Minister Wehby also said Cabinet had given instructions for urgent steps to be taken to ensure that legislation addresses the operation of investment clubs.

He, however, warned that the Government would not allow unregulated entities to "elude oversight and to expose to irresponsible risk, the hard-earned savings of innocent members of the public".

Mixed responses

Cabinet's response to the treatment o investment schemes has elicited mixed responses from financial analysts, who argue that proposed legislation to accommodate investment clubs should be drafted with urgency.

Financial analyst Errol Gregory said yesterday that the authorities had opted for a hard-line approach in dealing with the new schemes.

Mr. Gregory told The Gleaner the Government's statement suggested that it was in support of the action taken so far by the regulatory authority.

"The only part of the statement which implied that there was any rethinking on the issue was Cabinet's instructions for urgent (legislative) steps to be taken," he said.

Mr. Gregory said this move by the Government was positive, noting that it would be difficult for the financial sector to have serious regulations which did not address the likelihood of persons coming together to form investment clubs.

Hard-line approach

Indicating that the establishment of investment clubs in Jamaica was an attempt at new entrepreneurial initiatives, Mr. Gregory said he believed some attempt would have been made to show flexibility on the part of the regulatory authority.

"What was seen so far suggests that the authority was opting for a hard-line approach. The laws exist, respect them," he said.

Financial analyst Claudette Crooks of Money Masters Limited, said she supports the Government's insistence that investment schemes must operate within the regulatory framework.

However, she said, Cabinet's position that it would consider applications from any entity for registration and licensing under the existing legal provisions required greater clarity.

edmond.campbell@gleanerjm.com