Market Conduct and You: An Intro

The Central Bank of Barbados recently issued a Market Conduct Guideline for the financial institutions it regulates. While providing detailed guidance to its licensees is not uncommon, on this occasion, in addition to issuing the guideline to the financial institutions and publishing it on its website, the Bank also hosted an event for key stakeholders and members of the media to highlight the significance of the document. 

If you’re wondering why the Bank took this step, it’s because, unlike many of the guidelines it has issued that do not directly impact the average Barbadian, the new Market Conduct Guideline, which went into force from July 12, 2024, aims to deliver a consistent experience for consumers of regulated financial institutions. 

In light of this, it’s worth getting to know what the guideline says and how it will affect you. Let’s start with the basics.

What is Market Conduct?

In this context, it refers to the behaviours and practices of financial institutions as relates to their interactions with customers. Put simply, how they handle specific aspects of their business and how they communicate with you. 

Who Does the Market Guideline Apply To?

As we mentioned at the start of this article, the Market Conduct Guideline applies to those entities that the Central Bank of Barbados regulates. At present, this means commercial banks and deposit-taking finance companies. However, the Bank intends for it to encompass future recognised entities, ensuring that emerging financial services are conducted with fairness and transparency.

One type of financial institution it doesn’t apply to, though, is credit unions. That’s because the Bank does not regulate them, rather, they are regulated by the Financial Services Commission.

What Does the Market Conduct Guideline Cover?

The new guideline covers five main areas: fees and charges, opening accounts, closing accounts, complaints, and accessibility for vulnerable groups. While a lot of what is outlined in the document is already in practice, the guideline now codifies them so as to ensure that Barbadians have a consistent experience wherever they do business.

The section on fees and charges addresses the steps these financial institutions must take before introducing a new fee or increasing an existing one; identifies specific services for which they cannot impose fees; and stresses the need for full transparency about the fees they impose.

As relates to opening accounts, the guideline lays out how to balance fulfilling anti-money laundering and combatting the financing of terrorism requirements with making the process as straightforward as possible for people who want to open an account. It also suggests the length of time it should take to onboard new customers. 

It then details the process financial institutions must follow before closing a client’s account, one that includes providing information on what the client can do to prevent that action from being taken. 

The guideline also addresses the issue of customer complaints, including making clear that financial institutions must not only have a robust, free, and easy-to-use complaint mechanism, but also that they must make their customers aware of it.

The section on accessibility focuses on multiple groups, including people with disabilities, pensioners, minors, and students, and speaks to both products and services that should be available to them and to the need for financial institutions’ physical locations and online presence to be inclusive. It’s important to note that while the majority of the elements of the guideline have already gone into effect, the Bank recognises that some of those related to physical infrastructure, such as making branches wheelchair accessible, require additional time.

The document also suggests language that financial institutions can use to communicate with their customers to ensure that messaging is clear and readily understood.

It should be clear to you by now that the new Market Conduct Guideline is something you should get familiar with. You can do that by downloading the full document or watching the launch event. We’ll also go into detail about the different sections of the report in future articles.