View this email in your browser

Pace of change is accelerating

The rate of change within the financial services sector continues to accelerate, with more data-driven and digital ways of working.

As a modern regulator the Authority is committed to keeping pace with developments to ensure it remains effective, responsive and relevant. Standing still is not an option.

We have kick-started a discussion around transformational change in the workplace and how best to position ourselves in the future.

In a wider context, the proposed introduction of a new funding model represents a significant transition for the regulatory environment in the Isle of Man.

I would like to thank everyone who has provided feedback via the consultation and meetings with industry bodies.

Collaboration remains an important part of our overall approach and we are maintaining a busy programme of engagement.

As part of this outreach, I joined an Isle of Man delegation in May to help promote our financial services sector to an audience of business leaders in the City of London.

The event highlighted the fantastic opportunities for existing firms to grow and flourish, for fintech and other start-ups to enter the marketplace, and for individuals to invest with confidence.

I hope you find the contents of this e-bulletin helpful – and please stay in touch in the time ahead.

Bettina Roth, CEO

A more sustainable funding model

The Authority recently invited your comments on the introduction of a proposed new funding model and fees structure for regulated and supervised firms.

The intention is to put in place a more sustainable approach that aligns with international best practice, while being mindful of the Island’s competitive position.

This is a significant change for the regulatory environment in the Isle of Man and follows the announcement made by Treasury to cut the level of financial support it provides to the Authority. This Government subvention is currently passed on to firms in the form of reduced fees.

We have held productive meetings with a number of industry associations in recent weeks and will review all the feedback before considering the next steps.

Thematic review of foreign PEPs

Our AML/CFT Division is currently leading a thematic review of foreign Politically Exposed Persons (PEPs).

The review will produce data that will inform our future risk assessment of relevant persons, sectors and industry, as well as the Isle of Man’s next National Risk Assessment.

Reports will be produced and published on our website to summarise some of the key findings and trends captured by this project.

The review will also help to identify areas of best practice, or any weakness that may pose a threat to our regulatory objectives.

Our team is aiming to complete a total of 29 inspections and the work conducted so far has produced some interesting insights into how firms deal with foreign PEPs in areas such as on-boarding, risk assessing and screening.

Visit by GIFCS assessment team

An assessment team from the Group of International Finance Centre Supervisors ‘GIFCS’ visited the Island during the week of 9-13 May 2022.

GIFCS has a core interest of promoting the adoption of international regulatory standards, especially in the banking, securities, fiduciary and AML/CFT arena. The assessment team was here to conduct the on-site part of the Island’s evaluation.

The visit included meetings with external stakeholders, involving a number of licenceholders and the Association of Corporate Service Providers. Many thanks to all those who met the GIFCS assessment team.

We have provided further information in support of the evaluation and expect the final report to be issued before the end of 2022.

Insurance framework update

The new risk-based solvency/capital framework for Non-Life Insurers will come into effect on 30 June 2022. 

The new regulations include a change to the definition of Class 12 insurance business.  At the same time, the Authority will be issuing various guidance notes and information to support the implementation of the new regulatory framework.

We also wish to notify insurance regulated firms that we will no longer be issuing certificates of authorisation/registration.

Our website provides access to registers of regulated firms, which include details of the authorisation/registration permissions for those entities.

AML/CFT statistical returns

The AML/CFT returns provide valuable data which helps us to assess the risk of money laundering and terrorist financing in each sector within the industry.

The returns also provide insight into how individual businesses compare with peers within their sector and across sectors.

Further to publishing updated sector reports for banks, financial advisors and investment firms earlier this year, we have also now published updated sector reports, using data for December 2019 and December 2020, for the following:
  • Fund Managers / Administrators; and
  • Trust & Corporate Service Providers
The first set of reports for Life Insurance will also follow soon.

View the sector reports published to date

Improving our data management

We are placing an even greater emphasis on data management and analytics. Everything we do as a regulator depends on the information we collect – and how we use it.

Improving our means of gathering, triaging and storing data strengthens our ability to make informed, evidence-based decisions.

Our back-office system, which enables us to report on all supervision activity from one central point, is now supported by a new Data Warehouse.

This will improve our interaction with you and ensure that we can seek to devote more resources to value-added and risk-based supervision.

As well as streamlining internal processes, better use of technology will help to reduce the compliance burden for our regulated and supervised firms.

Playing our part in a low-carbon economy

The Isle of Man is committed to reaching carbon neutrality by 2050 – and the financial services sector will play an important role in helping to achieve an orderly transition.

Regulation can influence financial behaviour to support a low-carbon economy and the Authority is developing a roadmap to set out how we will integrate climate-related and environmental risks into our supervisory approach.

We will continue to work with Island businesses, particularly those in the banking and insurance sectors, to better understand how ESG features in their thinking.

We are also engaging with various international regulatory bodies to develop awareness and understanding.

In the meantime, we would encourage firms to review their business models and consider what action they may need to take in order to mitigate any climate-related and environmental risks.

Bettina joins Board of SCFMC

Bettina Roth, the Authority’s Chief Executive Officer, has been appointed to the Board of Directors of the Small Countries Financial Management Centre (SCFMC).

Bettina joins the organisation ahead of the launch of its 2022 executive education programme.

A total of 22 officials from finance ministries, central banks and regulatory bodies are set to take part in the highly acclaimed initiative from as far afield as the Caribbean, Pacific, Indian Ocean and Africa.

The programme takes place over two weeks, with six days of intensive teaching at Harris Manchester College, University of Oxford (26 June-1 July) followed by seven days in the Isle of Man (2-8 July).

There is a strong focus on financial integrity, with practitioners and professors covering issues such as risk assessment, debt sustainability, transformational change, negotiation skills, leadership, and regulatory improvement.

Resolution and Deposit Compensation

Paul McAuley has joined our Resolution and Deposit Compensation team and will undertake strategic and operational planning, as well as managing day-to-day operations.

Paul brings a great deal of experience to the Authority after serving in senior roles at Lloyds Bank in the Isle of Man.

He will be visiting all Chief Executives of Island banks and attending meetings of the Isle of Man Bankers’ Association to help increase awareness of deposit compensation and resolution matters.

Meanwhile, following the recent consultation, the Bank Levy Order in respect of funding the operational costs of the Resolution Authority is expected to go to Tynwald in July.

Funds quarterly statistical bulletin

Movement in Island’s deposit base

Lending statistical bulletin

Sanctions updates published online

AML/CFT Country Lists
FSA Twitter
FSA Facebook
FSA Website
FSA LinkedIn
Copyright © 2022 Isle of Man Financial Services Authority

Our mailing address is:

PO Box 58
Isle of Man
IM99 1DT