In his budget speech the Treasury Minister pledged ‘an additional £480,000 to the FSA to allow it to protect the Island’s high standards of compliance and regulation‘.
So what will this mean in practice?
Well the Island’s detailed budget, the Pink Book, provides some additional insight.
The Pink Book reports that ‘in order to continue to enhance its oversight of AML/CFT risks the Isle of Man Financial Services Authority will create a dedicated AML/CFT unit formed partly by existing, experienced AML/CFT practitioners within the Authority but enhanced with a number of new dedicated roles.
This new unit, whilst continuing the good work carried out in this area historically, will undertake increased onsite inspections and will enhance the use of AML /CFT related data it collects from entities to more efficiently assess risk and direct its resources. This development will contribute to satisfying one of the priority outcomes highlighted by MONEYVAL’s Mutual Evaluation Report, around “demonstrating efficiency through supervision and the use of other tools”.’
The Pink Book further reports that ‘in light of regulatory developments, an expanded scope of responsibilities for the Authority and an increased risk appetite and more litigious approach adopted in some areas of the industry over recent years, the Authority will from 2020/21 be increasing its headcount across both its supervision and enforcement divisions. The increased headcount will be a mix of permanent and term appointments.
An additional permanent member of staff will join both the banking and the fiduciary services supervision teams to ensure the number of the supervisory staff remains sufficient to deal with the risks posed by the respective sectors. The term appointments, within which increases in the enforcement headcount will be covered, will assist the Authority to complete a number of key initiatives in a timely fashion and allow some anticipated short term projects to be adequately managed, ensuring at the end of these term appointments that the Authority’s permanent resources can both efficiently and effectively focus on the oversight of the key risks presented by the finance industry on the Island.
Over the coming years the Authority will continue with its proactive outreach programme to both industry and consumers. This outreach will include publishing enhanced data on the Authority’s overall performance and the range of its activities.’
The Treasury Minister also announced in his speech that that ‘plans will be developed for the Authority to move to a predominantly industry funded model in the future with the FSA and treasury to shortly undertake a joint consultation on transitioning the FSA towards this desired model.‘
Without a doubt the resources of the Authority have been stretched in recent times with increasing responsibilities being absorbed within existing capacities. However, with this imbalance now being addressed the regulated sector should see increased proactive activity especially in those areas which are to receive the additional funding: AML/CFT supervision, banking, fiduciary and enforcement.
Here at Rowany AML Solutions Limited we can help you to assess if you are ready to receive this enhanced level of scrutiny. Get in touch to arrange a free no obligation consultation on how we can help you.