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Back to Revised Laws of Saint Lucia (2021)

2. Interpretation

(1) In this Act —

“Agreement” means the Agreement establishing the Eastern Caribbean Central Bank made on the 5^th day of July, 1983, the text of which is set out in the Schedule to the Eastern Caribbean Central Bank Agreement Act and any revisions made thereto;

“affiliate” in relation to a financial institution (“F”) means —

(a) a company which is or has at any relevant time been —
1. (i) a holding company or subsidiary of F,
1. (ii) a subsidiary of a holding company of F, or
1. (iii) a holding company of a holding company or a subsidiary of a subsidiary of F;

(b) any company over which F has control;

(d) any company which has common ownership with F; or

and “affiliation” shall be construed accordingly;

“assigned capital” means the net assets derived from the funds of a foreign financial institution which it is required to keep during the term of its licence in accordance with prudential standards issued by the Central Bank;

“bank” means any licensed financial institution whose operations include the acceptance of deposits subject to the transfer by the depositor by cheque;

“banking business” means —

(a) the business of receiving funds through —
1. (i) the acceptance of monetary deposits which are repayable on demand or after notice or any similar operation,
1. (ii) the frequent sale or placement of bonds, certificates, notes or other securities, and the use of such funds either in whole or in part for extensions of credit or investment for the account and at the risk of the person doing such business;

(b) any other activity recognised by the Central Bank as banking practice and which a licensed financial institution may additionally be authorised to do;

“board” means the board of directors responsible for the management of a licensed financial institution;

“borrower group” means —

(a) a family group comprising an individual and that individual's relative where each member of the group is substantially dependent upon the same income sources;

(b) a company in which the family group indicated in paragraph (a) has control;

(d) a group of persons in which the credit worthiness, ability to generate funds or the future viability of each, depends on one or other member of the group;

(f) any other group of persons as may be determined by the Central Bank;

“business of a financial nature” means the collection of funds in the form of deposits, shares, loans, premiums, and the investment of such funds in loans, shares and other securities and includes the types of businesses set out in Schedule 2 but does not include banking business;

“capital base” means the total of paid-up share capital, statutory reserve fund, share premium account, retained earnings and any other capital account approved by the Central Bank, in the case of local licensed financial institutions, or such other capital account or similar measure as approved by the Central Bank in the case of a licensed branch of a foreign financial institution, less any amount by which that total has been impaired in either case;

“Central Bank” means the Eastern Caribbean Central Bank established under Article 3 of the Agreement;

“control” means the power of a person, either alone or with an affiliate or relative or connected or other person, directly or indirectly or by an agreement or otherwise to —

(a) exercise more than 20% of the voting rights at any meeting of shareholders of a licensed financial institution, company or unincorporated body;

(b) elect a majority of the directors of a licensed financial institution, company or unincorporated body; or

and the terms “controlling interest” and “controlling shareholder” shall be construed accordingly;

“corporate group” means a company and its affiliates;

“credit facilities” includes loans, advances, lines of credit, commitment letters, standby facilities, letters of credit, overdrafts, and any other facilities or arrangements, whether on or off-balance sheet;

“credit institution” means any licensed financial institution other than a bank whose business is that of money lending or the granting of credit facilities;

“Currency Union” refers collectively to the member countries and territories of Anguilla, Antigua and Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, Saint Christopher and Nevis, Saint Lucia and Saint Vincent and the Grenadines which use the Eastern Caribbean currency as their official currency;

“director” includes any person occupying the position of director of a licensed financial institution or a company by whatever name called and includes a person in accordance with whose directions or instructions the directors of a company are accustomed to act;

“exposure” means the amount at risk and includes —

(a) credit facilities, investments including equities, participations, guarantees and acceptance;

(b) claims on a counterparty including actual and potential claims that would arise from the drawing down in full of undrawn advised facilities, whether on or off-balance sheet, revocable or irrevocable, conditional or unconditional, that the licensed financial institution has committed itself to provide, arrange, purchase or underwrite;

“external auditor” means an auditor appointed under section 60 that is —

(a) a person who is a member of a professional body of accountants which the Minister has specified by Order published in the Gazette; or

(b) any other person approved by the Central Bank;

“financial group” means a corporate group, the members of which conduct banking business or business of a financial nature;

“foreign financial institution” means a financial institution which is incorporated under the laws of a country outside of the Currency Union;

“holding company” means a body corporate that controls another body corporate;

“international financial institutions” refers to the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, and the International Finance Corporation;

“large exposure” means an exposure to a person or a borrower group, which amounts to 10% or more of the capital base of a licensed financial institution;

“licensed financial holding company” means a holding company of a licensed financial institution licensed under this Act;

“licensed financial institution” means any person or incorporated entity licensed to conduct banking business under this Act;

“local licensed financial institution” means a licensed financial institution formed under the laws of a member country or territory of the Currency Union;

“Minister” means the Minister responsible for Finance;

“Monetary Council” means the Monetary Council established under Article 7 of the Agreement;

“officer” means —

(a) a chief executive officer, chief operating officer, president, vice-president, corporate secretary, treasurer, chief financial officer, chief accountant, chief auditor, chief investment officer, chief compliance officer or chief risk officer;

(b) any other individual designated as an officer by its articles of incorporation or continuance, bye-laws or other constituent document, or resolution of the directors or members; or

© any other individual who performs functions similar to those performed by a person referred to in paragraph (a), whether or not the individual is formally designated as an officer;

“Participating Governments” means the governments of the member countries and territories of the Currency Union;

“person” means an individual, a public body, company, partnership, trust, association or body of persons whether corporate or unincorporated;

“place of business” means any office including a mobile office of a licensed financial institution, in the Currency Union;

“principal place of business” means, in relation to —

(a) a local financial institution, its principal office in the Currency Union; and

(b) a foreign financial institution, the office designated in its licence;

“related party” includes —

(a) any financial holding company, subsidiary or other affiliate of a licensed financial institution;

(b) directors, officers, and significant shareholders of a licensed financial institution, financial holding company, subsidiary or other affiliate of a licensed financial institution;

(d) any entity that is controlled by a person described in paragraphs (a), (b) and (c); or

© any other person or class of persons determined by the Central Bank to be a related party because of its past or present interest in or relationship with the licensed financial institution being such that it can reasonably be expected that this person can influence the decision of the licensed financial institution regarding a transaction;

“relative” means a spouse or former spouse, son, daughter, step-son, step-daughter, brother, sister, aunt, uncle or child of aunt or uncle or any person related by marriage, father, mother, any lineal ascendant and descendant of the individual or spouse of the individual;

“significant shareholder” means a person who either alone or with an affiliate or connected person, is entitled to hold more than 10% of the shares of the licensed financial institution or to exercise or control more than 10% of the total voting rights at any general meeting of the licensed financial institution or another company of which the licensed financial institution is a subsidiary and the terms “significant”, “significant interest” and “significant shareholding” shall be construed accordingly;

“subsidiary” means a body corporate that is controlled by another body corporate;

“ultimate beneficial owner” means the individual that ultimately derives the benefits of ownership or control of a body corporate;

“unsecured” in relation to advances or credit facilities, means —

(a) advances or credit facilities granted without security; or

(b) in the case of advances or credit facilities against security, any part of the advances or credit facilities which at any given time exceeds the market value of the assets comprising the security given, or which exceeds the valuation approved by the Central Bank whenever it considers that no market value exists for those assets.

(2) For the purposes of this Act, a person is connected to another person —
1. (a) where that person is an individual, the person is —
  1. (i) the relative of that person,
  1. (ii) the trustee of any settlement under which that person has a life interest in possession,
  1. (iii) a company of which that person is a director or controlling or significant shareholder,
  1. (iv) an employee or partner of that person;
1. (b) where that person is a company, the person is —
  1. (i) a director or controlling or significant shareholder of that company,
  1. (ii) a subsidiary or affiliate of that company,
  1. (iii) a director or employee of any such subsidiary or affiliate of that company;
1. © where that person has with any other person an agreement or arrangement with respect to the acquisition, holding or disposal of shares or other interests in a company or under which they undertake to act together in exercising their voting power in relation to the company, that other person.