Finance Minister Larry Howai yesterday piloted the Securities Bill 2012 to prevent this country from facing sanctions from another international financial organisation.
Last month this country was removed from the dark grey list of the Financial Action Task Force (FATF) after being on the brink of blacklisting and sanctions.
The bill was piloted at the sitting of the Lower House, Tower D, Port of Spain International Waterfront Centre.
Howai explained that the bill was intended to ensure this country's compliance with the regulations of The International Organisation of Securities Commissions (IOSCO), the worldwide association of national securities regulatory commissions, by January 1, 2013. He noted that if the country failed to meet the deadline it would not be placed on the new IOSCO list of compliant countries and face possible sanctions.
Opposition MP Colm Imbert however slammed the Government for again bringing legislation at the "eleventh hour" to avoid international sanctions, similar to what happened with legislation that was brought to fulfil stipulations of the FATF and avoid blacklisting.
"If you have a deadline come better than that," he chided.
He stressed that the deadline was only 44 days away and the Government allowed the bill to "languish" for the past two and a half years.
Howai in his contribution reported that the maximum penalty on indictment has increased from $100,000 and three months imprisonment, under the Securities Industry Act 1995, to $5 million and five years imprisonment. He noted the maximum administrative fine has increased from $5,000 to $500,000.
He also explained that people who may have suffered a loss due to insider trading, market manipulation or other offences under the new bill will now have a right for civil action and to seek direct compensation from the person who contravened the Act.
"This is a major departure from what has occurred before," he added.
Howai said that through the bill steps have been taken to ensure the Securities Commission can significantly and more stringently prosecute breaches. He also reported that it will help to protect unsophisticated participants from buyers and sellers of securities who take advantage of their lack of understanding; brings this country more in line with the global standard regarding insider trading; and connected persons will now be prohibited from disclosing material non-public information to third parties.
He added that one of the lessons of the financial crisis was that people have to be held accountable for their actions and noted that the bill "substantially improves" the reporting obligations of those who issue securities and requires that all accounts are prepared with international accounting standards.
Imbert in his response also criticised the introduction of a tribunal which added more bureaucracy, "usurped" the judicial process and "hamstrung" the Securities Commission.
He said the penalties were too light and needed to be significantly increased to a whopping fine such as $100 million and much longer jail sentences. He questioned whether the (penalty) figures were "pulled out of a hat" and said it was not in line with what obtains internationally.
Howai in his winding up said the $5 million was the only change in the penalty figures compared to the 2009 and 2010 versions of the bill. The bill was referred to a Joint Select Committee with a duty to report by December 9, 2012.