World Wise application lacking - Cash Plus, FSC meet today
published:
Friday | February 8, 2008
Sabrina N. Gordon, Business Reporter
World Wise building on Ruthven Road, New Kingston. - File
World Wise Partners is the only so-calle investment scheme to have formally applied to the Financial Services Commission for a licence since a December ruling by the Supreme Court suggesting that all such schemes are subject to the regulatory jurisdiction of the FSC.
However, the FSC has asked World Wise for more information on the documents before its application can be fully processed, both officials of the company and the regulatory agency confirmed yesterday.
The FSC has estimated that there are more than two dozen of these companies operating in Jamaica.
Officials of the Carlos Hill-led Cash Plus Limited - perhaps the largest and most controversial of the schemes - having dropped its application for a court declaration on who should supervise it, are to meet FSC staff for exploratory talks today on possible compliance.
They have, however, not filed a formal application for a licence.
Additional information
Nadine Newsome, the FSC's communications manager, said that World Wise filed its application last week, but commission staff on Monday asked for additional information.
Other companies have made queries about registration, Newsome said, but none has actually filed an application.
Precisely what more the commissioners want to know was not disclosed, but World
Wise's CEO, Patrick Covey, said his company would comply with the request.
"It is within the normal process of the regulating authority and this happens to everyone," Covey told the Financial Gleaner.
"We missed a day yesterday with the holiday, but we are almost ready to return the added information requested by the authority."
A rash of unregulated investment vehicles, offering returns as high as 200 per cent a year, has mushroomed in Jamaica since early in the decade.
But they mostly operated quietly, if not below the radar, until two years ago when the authorities, fearing the possibility of Ponzi schemes and/or money laundering began to crack down on the businesses.
The FSC's first targets were the foreign exchange trader Olint and an independent agent LewFam, whose offices were raided and documents taken away.
Both outfits insisted that they did not fall within the purview of the FSC since they were private clubs. In any event, they did not trade in securities over which the commissioner had regulatory power.
But in a December 24 ruling, the court held that while foreign currency may not per se be securities, the outfits did issue investment contracts that amounted to certificate of participation in profit sharing agreements, thereby bringing them under the umbrella of the FSC.
Both Olint and LewFam have appealed the ruling, but LewFam's Ransford Braham said his clients were in touch with the FSC about the process for licensing.
They are yet to receive a response from the FSC, Braham said.
Withdrawal
In the face of the ruling, Cash Plus, which said it did not trade in foreign exchange, announced its withdrawal of its application for the court to determine whether it should be regulated by the FSC or the Bank of Jamaica.
At the same time, the FSC issued a cease and desist order against Carlos Hill's company, which had earlier flirted with the possibility of submitting to the FSC's jurisdiction.
That project, however, unraveled when the FSC held that financial information provided by Cash Plus was inadequate.
