Financial Services Authority celebrates second anniversary
The Financial Services Authority (FSA) celebrated its second anniversary on November 12, 2014. In just two years of being in existence, the FSA has been able to evolve into a professional and specialized organization, engaged in the effective execution of its legal mandate.{{more}}
The FSA is an autonomous statutory body, established pursuant to the Financial Services Authority Act, No. 33 of 2011, for the purpose of regulating the international and non-bank financial sectors, the latter made up principally of credit unions, insurances and pensions, building societies and money remitters. Prior to the establishment of the FSA, the financial sector was regulated and supervised by separate governmental entities. The FSA, therefore, is an amalgamation of these entities into a single regulatory authority, which has brought about a more streamlined, efficient and cost effective structure.
Prudential Oversight Over Two Years
The past two years since the establishment of the FSA have been very dynamic, providing many opportunities and challenges to which the organization has diligently risen. Shortly after its establishment, the FSA intervened and assumed management and control of the countryâs sole building society, the St Vincent Building and Loan Association. This was in an attempt to stem a run by depositors on the institution and to safeguard the assets of members and depositors. The actions of the FSA were also geared at maintaining the stability of the financial sector and averting the potential for contagion to other related financial institutions. To date, these efforts have been well supported by the FSAâs stakeholders and external partners and have been successful in achieving those objectives.
Other significant activities in the non-bank sector have been in the insurance and credit union subsectors, and have included closer collaboration of licensees with the FSA in a process of off-site monitoring and on-site examinations, to address financial stability, legislative compliance and soundness of operations. Such work continues on a perpetual as well as risk approach basis, through off-site supervision and on-site examinations which are undertaken every 12-18 months.
The same assiduous level of prudential oversight is applied to the international financial services sector. To date, the FSA has conducted on-site examinations on numerous entities in all sectors and continues to monitor corrective actions required to be taken through off-site supervision and further on-site follow-up inspections.
Local, Regional and International Initiatives
The FSA has been actively involved in local, regional and international initiatives in an effort to achieve compliance with international standards and safeguard the reputation of St Vincent and the Grenadines (SVG). The FSA is a statutory member of the National Anti-Money Laundering Committee (NAMLC) in SVG and is thus involved in policy making at the national level in matters relating to anti money laundering (AML) and counter financing of terrorism (CFT). The FSA interfaces with the Caribbean Financial Action Task Force (CFATF), the Caribbean arm of the international standard setter on AML/CFT matters, as part of the execution of its role under the NAMLC.
The FSA is represented on the ECCU Steering Committee on Basel II Implementation (international standards relating to capital adequacy of banks) and is part of the ECCU as well as the SVG National Committee on the US Foreign Account Tax Compliance Act (FATCA), an initiative of the US to ensure the transmission of accounting and tax information on its citizens holding accounts and assets in foreign countries back to the US.
The FSA also serves as the inaugural Secretariat of the Caribbean Association of Credit Union Supervisors (CACS), a newly established body to provide a forum for collaboration on matters related to credit union supervision and regulation. The FSA played a leading role in the establishment of this association.
Over the past two years, the FSA successfully led SVGâs response to a two-part review or assessment by the Global Forum Peer Review Group of the Organization of Economic Co-operation and Development (OECD). The OECD is the international standard setter on tax matters. The conclusion of both assessments respectively, was that SVGâs legal and regulatory framework generally met the standards of the OECD for Exchange of Information (EOI) for Tax Purposes and that this countryâs tax regime in law and practice was largely compliant with the said OECD standards. This is extremely positive to SVGâs reputation as a tax transparent and accountable jurisdiction.
Way Forward
The FSA will be working with all stakeholders to further harmonize and strengthen SVGâs regulatory and supervisory regime, so as to enhance this countryâs macro and micro financial stability and business climate. The FSA is confident that with its strong legislative footing and team of well trained professionals and support staff, buttressed by the support of stakeholders, it would be successful in meeting this objective. The FSA sincerely thanks its stakeholders and the public for the support and cooperation received during the past two years of its existence.
Submitted by:
Financial Services Authority
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