Banking and Trusts

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Domestic Banking

          Domestic banks are licensed under the Banking Act. There are currently four domestic banks. Two of the domestic banks are of indigenous capital, National Bank of Anguilla and Caribbean Commercial Bank (Anguilla), and are testament to the strength of the Anguillian economy in that they are the two largest banks in terms of asset base. The other two banks are well known international banks, FirstCaribbean International Bank and Scotiabank. Applications for domestic banking licences must be made to the Minister of Finance, who may grant the licence based on the recommendation of the bank supervisory authority, which is the Eastern Caribbean Central Bank (ECCB), based in St Kitts. The ECCB serves as the Central Bank to all member states of the Organisation of Eastern Caribbean States, including Anguilla, and is responsible inter alia for regulating and supervising all domestic banks within member states.

Offshore Banking

          Offshore banking licences are granted under the Trust Companies and Offshore Banking Act (TCOBA) amended by the Trust Companies and Offshore Banking (Amendment) Act 2005. Under the TCOBA, a banking licence is granted to applicants who are fit and proper and qualified to carry on offshore banking business. Under current guidelines offshore banking licences will only be granted to:

• branches or subsidiaries of banks with a well-established and proven track record which are subject to effective consolidated supervision.
• banks which, although not subsidiaries, are closely associated with an overseas bank, and which, by agreement, will be included within the consolidated supervision exercised by the overseas bank’s home supervisory authority.
• wholly-owned subsidiaries of acceptable non-bank corporations whose shares are quoted on a recognized stock exchange, where the objective of the subsidiary is to undertake in-house treasury operations only, and where such operations are fully consolidated within the published financial statements of the parent company.

          Banks will only be granted licences if their place of incorporation, mind and management are within the same jurisdiction, or, in the case of a subsidiary, if the mind and management is located in the jurisdiction in which consolidated supervision is being exercised.

          In reviewing the application, the Commission will expect to be satisfied that:

• the management has a proven experience in a relevant field of banking;
• the controllers are fit and proper people to undertake the functions envisaged and that the ongoing management will be competent;
• the institution will conduct its business in a prudent fashion;
• the institution has devised an appropriate and sustainable business plan;
• adequate capital and other resources will be provided in relation to the business plan. The minimum capital requirement for a bank is US$250,000 or the equivalent amount in another currency. However capital adequacy will depend on the institution's capital and reserves covering risk-weighted assets to an acceptable ratio
• direct confirmation has been received from the supervisory authority in the country in which the institution or its proposed parent is incorporated, that the authority consents to the establishment of the institution in the host territory; that it will exercise consolidated supervision over the institution’s overall activities including within the host territory and will cooperate fully in the sharing of regulatory information with the Commission and will provide all the information that the Commission needs to perform its functions
• the applicant will appoint approved auditors who will perform audit work according to internationally accepted auditing standards.

Trusts

          The TCOBA provides for the licensing of two types of trust licence. The first is a general trust licence. Such a licence allows the licensee to offer trustee services to the public in general and is granted if the Commission is satisfied that the applicant is a fit and proper person and is qualified to carry on trust business.

          A general trust licence allows the licensee to extend the licence to wholly owned subsidiaries, engaged in trust activities. Minimum paid up capital of US$250,000 or the equivalent in another currency is required. Licensees are required to seek the approval of the Commission for any change of director and change of ownership and beneficial ownership and to submit annual audited financial statements.

          The second type of trust licence is a restricted trust licence, which limits the licensee to administering a limited number of trusts, the names of the settlors of which are required to be listed in the application or in any amendment to an existing restricted trust licence. There is no set minimum capital requirement for a restricted trust licensee. The Commission sets the capital requirement based on the circumstances of the application.

          The underlying legislation regarding trusts is the Trusts Act 1994, which seeks to modernize trust law with respect to security, confidentiality and flexibility, while preserving the best features of common law trust interpretation. The Trusts Act allows for the optional registration of trusts.

          Applicable fees and application forms to undertake offshore banking and trust activities are detailed in the Trust Companies and Offshore Banking Regulations and the Trust Companies and Offshore Banking (Fees) Regulations.