The Editor, Sir:

The Government and the Ministry of Finance (MoF) and, in particular, Senator Don Wehby, have missed selecting the best approach the Government should take on regulating the so-called 'alternative investment schemes'.

First, the Prime Minister had assembled a team including the attorney-general, officials from MoF, the Financial Services Commission (FSC) and representatives from the banking sector. Missing from this team were members of the 'schemes'.

These are important stakeholders and would have prevented the committee from being blindsided and biased. The fact that these speculators were not included makes the decision seemed biased.

Second, a number o to regulation should have been considered and the one that delivers the best approach at settling the problems the country is facing selected, based on what is the objective of the country and the main stakeholders.

Finally, the best approach would be implemented as quickly as possible. This, of course, would be done without disruption to the formal banking sector, properly managing the public risk and of course promoting stability and public confidence in the operations of the institutions operating.

A suggested approach

Using the steps outlined before, the first thing the Government should do is ensure that all entities operating in Jamaica are registered under the Companies Act.

Next, there needs to be a sorting and classification of the schemes according to their business. It is clear that there is more than one type of offering. Some are offering forex products. It is not clear what the others are offering.

Forex products by their nature are not financial instruments, but rather commodities and futures and should be regulated as such. The other products must be classified and then regulated accordingly.

Both the FSC and the Government have not yet taken the time to understand the issue and the controversy. Problems are easier to solve than controversial issues.

The forex schemes are not against regulations: their argument is that they should not be regulated as financial firms, such as banks and financial institutions. A broad-brush approach will not work.

I am, etc.,

GARFIELD EDWARDS

garfieldaedwards@hotmail.com

Spanish Town