The Isle of Man Financial Services Authority continues to demonstrate a strong overall level of compliance with international standards for the regulation of Trust and Corporate Services Providers.
The Authority achieved the highest ‘compliant’ rating in nine of the 10 key areas assessed by the Group of International Finance Centre Supervisors (GIFCS), and a ‘largely compliant’ rating in the other.
GIFCS is the organisation that promotes the adoption of international regulatory standards in the banking, securities, and fiduciary sectors. The Authority, which is responsible for the prudential and conduct supervision of Trust and Corporate Services Providers (TCSP) in the Isle of Man, invited scrutiny from GIFCS as part of its commitment to continuous improvement.
The on-site evaluation in May 2022 covered areas such as licensing and authorisations, corporate governance, anti-money laundering and countering the financing of terrorism (AML/CFT), and financial crime.
A team of GIFCS supervisors met senior officers at the Authority, a cohort of Island TCSPs, the Association of Corporate Service Providers (ACSP), and Government agencies to see first-hand how supervision and regulation are being applied in practice.
The TCSP sector is an important part of the Island’s economy, with significant activity including 12,135 trusts and 19,651 companies under management, 219 partnerships, and 199 foundations. According to figures for 2021/22, the sector directly employed a total of 1,322 people.
Findings from the evaluation have been captured in a report published on the Authority’s website following consideration by GIFCS member countries during the November 2023 plenary in Basel and a subsequent peer review.
The nine compliant ratings reflect a positive overall view of the Authority’s regulatory and supervisory regime in respect of TCSPs. The one largely compliant rating was awarded due to an exception to prudential requirements that permitted smaller TCSPs with limited turnover to be exempt from producing audited annual financial statements. Since the on-site visit, the Authority has addressed this issue.
An internal action plan has also been put in place by the Authority in response to other matters identified by the GIFCS supervisors for further consideration. The report notes that significant changes were being implemented by the Authority at the time of the evaluation, including the transition to an updated approach to supervision, a more sustainable funding model, and the enhanced use of data in the risk assessment of TCSPs.
Bettina Roth (pictured), Chief Executive at the Authority, said: “The strong ratings reflect the Authority’s long-standing policy of positive engagement with international standards and its efforts over many years to enhance levels of compliance within the TCSP sector. We continue to work collaboratively with firms and wish to thank the TCSPs and members of the ACSP for their contribution to the GIFCS evaluation.”
