Insurance Industry Report 2018

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FSA attend 14th Annual GRAF Conference

With its inaugural conference held in 2003, Gaming Regulators Africa Forum (GRAF) is comprised of national gambling regulators from the African Continent. Seychelles as one of its newest member jurisdictions, being represented by the Financial Services Authority (FSA), attended the 14th Annual GRAF Conference for the first time this year.

Hosted in Botswana by the Botswana Gambling Authority, at the Grand Palm Hotel Casino Convention Resort. The conference’s opening ceremony was launched by Honorable. Moiseraele Goya, the Assistant Minister of Investment, Trade and Industry of Botswana. The conference hosted speakers from numerous gambling regulatory authorities of Africa, such as Botswana, South Africa, Malawi, Limpopo and key service providers from the gambling industry, including Gambling Laboratories International (GLI) and Casino Association of South Africa (CASA). As a new member jurisdiction, representatives of FSA were invited to the stage for an official welcome and a brief speech, given by the Deputy CEO of FSA, Ms. Zenabe Daman. As part of its mission to increase efficiencies in the gambling regulation, administration and enforcement of gambling laws in the region, the GRAF conferences cover a range of topics which are key to protection of citizens through ensuring adherence to regulatory laws applicable in the member states, and serve as a platform for sharing knowledge and experiences between various stakeholders of the gambling industry.

Attending the 14th Annual GRAF Conference has greatly enhanced FSA’s understanding of several key topics of the gambling industry, its impact on economies and societies, and the challenges that it presents. The FSA will continue to actively participate in GRAF conferences in the future in order to continue its development as a gambling regulator, to acquire and share knowledge and to enhance Seychelles’ position as a reputable gambling destination in Africa.

Group Photo of delegates

Development in Seychelles FinTech Environment

PWC FinTech Training

The FSA organised a capacity building session on FinTech which was facilitated by Mr. Henri Arslanian and Mr. Tom Huynh from PricewaterhouseCoopers (PwC) Hong Kong. The whole day training took place on the 5th December 2018 at the Savoy the Resort and Spa and was attended by all the stakeholders. The session covered the following topics:

  • Introduction to FinTech
  • Blockchain
  • Crypto Assets
  • Virtual Banking followed by a case study
  • TechFin
  • Payments
  • P2P
  • RegTech followed by a case study
  • InsurTech
  • Robo-Advisor followed by a case study

The training serves as a starting point to educate and enhance the knowledge of the FSA staff and the stakeholders on FinTech.

BitMEX in the Seychelles

FSA Seychelles

The individuals behind BitMEX, a wholly owned and operated company by HDR Global Trading Limited (a Seychelles IBC), visited the Seychelles during the week of 10th-14th December 2018. During their visit, Ms. Angelina Kwan BitMEX, Chief Operation Officer delivered a short session on what is Bitcoin and the mining of bitcoins, on the 14th December,2018, at STC Conference Room.

Further to the training session, Mr. Arthur Hayes the Co-founder and Chief Executive Officer of BitMEX signed a Memorandum of Understanding (MoU) with the FSA. The MoU will provide a framework that would allow for a strategic partnership and the fullest possible cooperation between the parties.

Financial Sector Conduct Authority (FSCA) Familiarisation Training

The FSCA conducted a familiarisation programme on 21st – 23rd November 2018, in Pretoria, South Africa. Of which two FSA staff attended. The familiarisation was mainly focused on Consumer Financial Education programmes currently being implemented by the FSCA’s Consumer Education Department. The FSCA places great emphasis on projects concerning financial awareness, whereby they have developed various financial awareness projects targeting different market niches within the financial market.

The programme was brought about so that other countries in Africa can have an understanding of the developments in financial consumer education achieved by the FSCA in South Africa. In addition, the FSCA wanted to share with the participants a breakdown of the different projects they currently have in place and developing, and what are the achievements and downfalls they have faced over the years. Furthermore, the aim was to explain and educate the participants on how to go about with developing and implementing such projects and how to monitor and evaluate its effectiveness.

On the last day of the familiarisation programme, the participants went to visit a township where the FSCA was implementing a financial consumer education project for boys aged 12 – 13 years on the importance of saving money and the numerous way they can do so.

The programme was an opportunity to educate other regulators on how to better understand and develop their financial consumer education projects and how best to implement it so that it reaches the wider population in an efficient and effective manner.

ICA-AML Training

As part of its mandate in ensuring the development of the standard of practice within the financial services industry in Seychelles, the FSA, in collaboration with the International Compliance Associations (“ICA”) conducted its second compliance course enrollment for the year 2018, which is the certificate in Anti-Money Laundering (“AML”).

A one-day workshop for the certificate was held at the Guy Morel Institute on the 14th November, 2018 by Mr. Jonathan Bowdler, the head of Regulatory Compliance at the International Compliance Training (“ICT”), and was attended by numerous participants from the financial services industry.

The ICA certificate in AML aims at providing participants with an introductory understanding into the money laundering and terrorist financing challenges faced by financial institutions, and equip these participants with the knowledge of international best practice initiatives that will assist them in combating these challenges.

The ICA certificate in AML is subsequent to the certificate in Compliance undertaken early during the year, and the FSA expect to conduct further training for the year 2019 to ensure that the industry is provided with the necessary tools and skills for a more efficient delivery in their work place.

Financial Education Fair

Seychelles Financial Services Authority (FSA) in collaboration with the Central Bank of Seychelles (CBS) organized for the first time a Financial Education Fair which was held on the 23rd and 24 th November 2018, on Mahe. The financial education fair brings together the different partners and stakeholders within the financial services sector, encompassing both banking and non-banking sector of the financial services industry. This includes both Government and the private sector, such as banks, bureau de change, insurance companies and capital markets.

FSA Staff and CEO

This fair created a platform providing the public with the opportunity to engage with representatives across the financial services community.

The aim of the fair forms part of the continuous attempt towards educating the public on the
different financial products or services available and provide clarifications on the functions and answer any queries relating to the different financial services organizations and stakeholders.

The fair was declared open after two enlightening and energetic speeches by the two heads of the financial services regulators Ms. Carolina Abel, the Governor of the Central bank, followed by Dr. Steve Fanny, the CEO of the FSA. In his speech Dr. Fanny stated that, “Financial world is not complex. We are responsible to educate ourselves about the various products out there and make the most out of it.”

Another highlight of the event was the announcement and the unveiling of the winner of the Financial Education Mascot Design Competition, Ms. Shireen, Adeline who was presented with a cheque of Rs 20,000 by Ms. Abel and Dr. Fanny.

To ensure that a broad range of the Seychelles public had the opportunity to attend the fair, the team further held the Financial Education Fair on Praslin, on the 14th December 2018. This initiative aims to aims to provide everyone with the opportunity to engage with the financial services community.

Seychelles legislation complies to BEPS standard

The Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) brings together over 115 countries and jurisdictions to collaborate
on the implementation of the OECD/G20 BEPS Package.

The BEPS initiative is an OECD initiative, approved by the G20, to identify ways of providing more standardized tax rules globally.

BEPS is a term used to describe tax planning strategies that rely on mismatches and gaps that exist between the tax rules of different jurisdictions, to minimise the corporation tax that is payable overall, by either making tax profits “disappear” or shift profits to low tax operations where there is little or no genuine activity. In general BEPS strategies are not illegal, rather they take advantage of different tax rules operating in different jurisdictions, which may not be suited to the current global and digital business environment.

Seychelles committed to the BEPS project in 2016 and is therefore required to comply with the 4 minimum standards set out under BEPS. These minimum standards are on harmful tax practices, tax treaty abuse, country-by-country reporting and dispute resolution mechanisms. In terms of harmful tax practices component, the FSA had been working in close collaboration with other government stakeholders and the private sector in order to identify whether any of the Seychelles’ preferential tax regimes are potentially harmful.

Following the review of all relevant preferential tax regimes, amendments were made to the following legislations in order to bring them in line with BEPS:

  • The International Business Companies Act has been amended to allow IBCs to carry on business in Seychelles. This is in line with the amendments made in the Business Tax Act to move Seychelles tax system to a territorial system. The tax exemption clause under the IBC Act has been removed. Only IBCs deriving “Assessable Income” in Seychelles will be required to submit Annual Returns and Audited Accounts (in line with the Companies Ordinance 1972) to the FSA.
  • Similarly, in light with concurrent amendments in the Business Tax Act to move Seychelles tax system to a territorial system, the Companies (Special Licences) Act has been amended to remove the 1.5% business tax concession and withholding tax exemptions. CSLs incorporated on or before the 16th October 2017 may still be able to enjoy these tax concessions and exemption until the 30th June 2021 (other limitations apply).
  • The Insurance Act has been amended to remove tax exemption provision applicable to non-domestic insurers. Non-domestic insurers licensed on or before the 16th October 2017 may still be able to enjoy these tax concessions and exemption until the 30th June 2021 (other limitations apply). Moreover, the Second Schedule of the Business Tax Act was amended earlier this year to remove the tax exemption applicable to reinsurance business.
  • The licensable Export Services activities under the International Trade Zone Act has been amended to remove the activities falling within the scope of the OECD work on BEPS. Under the revised export services regime, the holder of an Export Services License will not be allowed to provide any services other than repair and reconditioning of goods, warehousing and rental of storage space or logistic services provided that these activities relate to goods physically handled in the zone, in Seychelles. Export Services operators licensed on or before the 16th October 2017 may still be able to enjoy all concessions and exemptions accorded under the International Trade Zone Act until the 30th June 2021 (other limitations apply).
  • The Securities Act and Mutual Fund & Hedge Fund Act have been amended to require licensees to meet the minimum substance requirements in order to benefit from the concessionary tax rate afforded under these legislations. The Regulations provides that the substantial activity requirements shall be met if the licensee (including fund administrator) undertakes its core income generating activities in Seychelles by employing, a reasonably adequate number of suitably qualified persons to carry out the core activities. The licensees are also expected to incur an adequate amount of operating expenditures for such activities.

Following the enactment of these new pieces of legislations, the FSA will now monitor the various new requirements, including the implementation of the minimum substance requirements, in collaboration with the Seychelles Revenue Commission. These new regulations will take effect as of 1st January 2019.

Aside from the BEPS amendments, other non-BEPS amendments were also made to the International Business Companies Act which include:

  • limit access to the filed register of directors
  • increase of the automatic dissolution period of a company from 5 years to 7 years
  • extension of the Registrar’s power to restore a struck off company (rather than a Court restoration order being required) under all circumstances, except where a company is struck off for fraudulent purposes or for a reason which jeopardize the reputation of Seychelles as a financial center.

In view of these amendments, Seychelles hopes to reinforce its commitment to the work of the international community towards best practices.

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Bois De Rose Avenue, P.O. Box 991

Victoria, Mahe, Seychelles

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