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Private Banking Laws and Regulations in The Bahamas
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Duty of Confidentiality
The duty of confidentiality is a fundamental aspect of the relationship between a bank and its client. This duty requires banks to maintain the secrecy of their clients’ information, including financial data.
Exceptions and Limitations
Exceptions to the duty of confidentiality are provided for in both statute and common law. These exceptions include:
- Situations where disclosure is made without liability if it is done to perform legally imposed duties or duties within the scope of employment.
- When the Central Bank of The Bahamas (CBB) exercises its functions.
- Providing information with a view to instituting criminal or disciplinary proceedings.
Liability for Breach
Liability for a breach of confidentiality can result in:
- A maximum fine of B$25,000
- A maximum of two years in prison, or both
- Any damage that a customer can prove as a result of the breach of confidentiality
Cross-Border Services
Bahamian law does not apply to private banking services offered on a purely cross-border basis (ie, via telephone, post, email, or other electronic means from a foreign location).
Licensing Requirements
Where private banking services are provided on a cross-border basis, local laws and regulations do not impose any licensing requirement on the private bank where services or products are provided to its clients in The Bahamas.
Regulation of Cross-Border Services
Cross-border services are generally not regulated by Bahamian law.
Employee Travel
Employees of foreign private banking institutions may enter The Bahamas to meet with clients or prospective clients without being licensed in The Bahamas. However, they should be cautious to ensure that what they are doing does not amount to the offering of securities in The Bahamas.
Exchanging Documents
A foreign private banking institution may provide documents to clients and prospective clients in The Bahamas without triggering any licensing or registration requirements.
There is no single number that solves this problem, as it involves a series of questions about the private banking laws and regulations in The Bahamas.