Bahamas sets up own stock market

THE BAHAMAS are to set up their own stock market targeting smaller companies from Latin America, China and Eastern Europe next year, said Ian Fair, the chairman of the Bahamas Financial Services Board yesterday.

It will be the first major initiative by the Board, a joint venture between the Bahamas government and the private sector, which was set up in July in response to attempts by the United States and Britain to clamp down on offshore financial centres.

The Bahamas have been fighting to clean up their image as a laundering haven for Miami drug barons. However, they have recently been back in the spotlight because of the large numbers of US managed hedge funds that are based in the Bahamas and cannot be properly scrutinised by the American Securities Exchange Commission.

Mr Fair, who is also chairman of the Bahamas subsidiary of MeesPierson, the Dutch bank, is unapologetic about the lack of income, savings or capital gains tax, the lack of tax treaties with other countries or the fact that the Board trumpets "privacy and discretion" as the "hallmarks of Bahamian banking".

However, Mr Fair, who bristles at the offshore label, insists that the authorities have bent over backwards to stamp out money laundering and fraud.

The Bahamas, he says, have since 1974 had a central bank that conforms to all the standards laid down by the Basle convention.

It was the first jurisdiction to introduce legislation against money laundering, and in June handed over without protest the fugitive Swiss financier Werner Rey, who fled to the islands in 1991 after his business empire crashed with $2.7bn of debts.

"No one is coming into the Bahamas these days with suitcases full of cash,'" said Mr Fair. "We want to be an international financial centre which offers all the major services you would expect. We see London and Frankfurt as the main competition."