Tweet
Copycat alternative investment schemes could grow - Wynter
Dennise Williams
Friday, April 27, 2007
Brian Wynter. executive director of the Financial Services Commission
The Financial Services Commission (FSC) is concerned that as investors continue to embrace the two major unlicensed alternative investment schemes, copycat schemes will spring up to lure investors.
"It is a jungle out there and I am concerned about the potential for growth in these types of entities," said Brian Wynter, FSC executive director at the First Global Financial Services (FGFS) investor forum held at the Pegasus Hotel on Monday.
Wynter's concerns seem justified in light of at least two recent Sunday, April 22 classified advertisements hawking, "100% and 110% on US$ PA Limited time offer. Conditions apply. No early withdrawal. Not a banking or securities product." Another advertisement in the classified section stated, "Real money in Real Time with Real Protection. $76,000 in income for life; $200,000 in, $1.2 million out in three years."
Yet, Wynter is pragmatic in his approach to the current situation. "In regards to these alternative investment schemes, there are three type of people. There are those who know the risks and don't care. There are those who know the risks and do care. Then there are people who don't know the risk and haven't got the message."
While he fights to get the alternative investment schemes to be in line with existing FSC regulations, several persons have come out in the media bashing Wynter and his methodologies. He took the opportunity to make it clear that he is not interested in standing in the way of wealth creation.
"Regulators are not concerned that an investment is good or bad. We are objective. We don't have an axe to grind. It is important that the investing public be free to make informed decisions. My job is to ensure that persons are able to meet minimum FSC requirements."
One such requirement is to get a licence. "It is a simple process," Wynter explained, "The capital requirement is only $5 million, which is one of the cheapest in the world. Regulators in other jurisdictions ask why Jamaica's capital requirement is so low, and I have to tell them it is what it is." Additional requirements that Wynter spoke of was transparency of operations, that is the opening of books for inspection, and that management pass fit and proper tests.
"There are sharks out there. Securities selling is about talking to people and convincing them to invest. Imagine your shock if something goes wrong and there is no recourse because the company director's say they didn't know about regulations," Wynter told the audience.
Wynter also addressed criticism, perhaps from the regulated financial services industry, that the FSC has done nothing to stop the growth of the alternative investment schemes.
"Let me be very clear. The FSC took definitive action; the fact is that the action is subject to the rights of the other party. It is frustrating, but you can't pre-empt the legal process."
As the FSC is currently engaged in a legal battle with alternative investment scheme, Olint, Wynter would not comment on the matter.
However, as to Cash Plus, the other major player in the alternative investment industry, Wynter would only say, "They have a lot of lawyers", Still, he made this observation, "You have to ask yourself why someone would not want to register with the FSC. The requirements are no mystery. The FSC sits down with anybody who want to go through the process."
Summing up the situation with two cliches, Wynter told the audience, "There is no such thing as a free lunch and anything too good to be true, usually is".
Dennise Williams
Friday, April 27, 2007
Brian Wynter. executive director of the Financial Services Commission
The Financial Services Commission (FSC) is concerned that as investors continue to embrace the two major unlicensed alternative investment schemes, copycat schemes will spring up to lure investors.
"It is a jungle out there and I am concerned about the potential for growth in these types of entities," said Brian Wynter, FSC executive director at the First Global Financial Services (FGFS) investor forum held at the Pegasus Hotel on Monday.
Wynter's concerns seem justified in light of at least two recent Sunday, April 22 classified advertisements hawking, "100% and 110% on US$ PA Limited time offer. Conditions apply. No early withdrawal. Not a banking or securities product." Another advertisement in the classified section stated, "Real money in Real Time with Real Protection. $76,000 in income for life; $200,000 in, $1.2 million out in three years."
Yet, Wynter is pragmatic in his approach to the current situation. "In regards to these alternative investment schemes, there are three type of people. There are those who know the risks and don't care. There are those who know the risks and do care. Then there are people who don't know the risk and haven't got the message."
While he fights to get the alternative investment schemes to be in line with existing FSC regulations, several persons have come out in the media bashing Wynter and his methodologies. He took the opportunity to make it clear that he is not interested in standing in the way of wealth creation.
"Regulators are not concerned that an investment is good or bad. We are objective. We don't have an axe to grind. It is important that the investing public be free to make informed decisions. My job is to ensure that persons are able to meet minimum FSC requirements."
One such requirement is to get a licence. "It is a simple process," Wynter explained, "The capital requirement is only $5 million, which is one of the cheapest in the world. Regulators in other jurisdictions ask why Jamaica's capital requirement is so low, and I have to tell them it is what it is." Additional requirements that Wynter spoke of was transparency of operations, that is the opening of books for inspection, and that management pass fit and proper tests.
"There are sharks out there. Securities selling is about talking to people and convincing them to invest. Imagine your shock if something goes wrong and there is no recourse because the company director's say they didn't know about regulations," Wynter told the audience.
Wynter also addressed criticism, perhaps from the regulated financial services industry, that the FSC has done nothing to stop the growth of the alternative investment schemes.
"Let me be very clear. The FSC took definitive action; the fact is that the action is subject to the rights of the other party. It is frustrating, but you can't pre-empt the legal process."
As the FSC is currently engaged in a legal battle with alternative investment scheme, Olint, Wynter would not comment on the matter.
However, as to Cash Plus, the other major player in the alternative investment industry, Wynter would only say, "They have a lot of lawyers", Still, he made this observation, "You have to ask yourself why someone would not want to register with the FSC. The requirements are no mystery. The FSC sits down with anybody who want to go through the process."
Summing up the situation with two cliches, Wynter told the audience, "There is no such thing as a free lunch and anything too good to be true, usually is".
Comment