The Financial Services Authority (‘FSA’) celebrated its third anniversary on November 12th, 2015, marking the occasion with a Workshop for Friendly Societies entitled ‘Friendly Societies Sustainability – Remaining Relevant and Viable Beyond our Now.’ The workshop was well attended by Friendly Societies operating in St Vincent and the Grenadines and presentations on its theme were facilitated by management and staff of the FSA. As part of its anniversary celebrations, the FSA was also involved in an internal strategic planning session on its Strategic Plan 2016-2018, developed by its Board of Directors.
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. The FSA is an amalgam of different regulatory entities into a single regulatory authority, which has already yielded substantial benefits by streamlining functions, consolidating resources and optimizing efficiencies.
The past three years in the lifespan of the Financial Services Authority have been fast paced and dynamic, providing both challenges and opportunities, to which the organization has diligently and appropriately risen. At just three years old, the FSA may still be described as a new organization; however, by no means can it be described as one that is ‘untested.’ The FSA has demonstrated its ability to aptly respond to challenges of the highest form, an integral test of the capacity of any regulatory authority. Of overriding significance is that the FSA has forged full speed ahead to evolve into a professional and specialized organization, engaged in the effective execution of its legal mandate.
The FSA’s most publicized work to date has been with the St Vincent Building and Loan Association (‘B&LA’/’the Association’). The avoidance of the failure of this iconic financial institution, through the efforts of the FSA, stakeholders and the Association itself, remains a key indicator of the success of the FSA as a regulatory authority. The FSA handed over management and control of the Association to the Board of Directors of the Association at its August 2013 AGM; thus, management decisions are the responsibility of the Association. The FSA, however, keeps the Association on its enhanced supervisory watch list, so as to monitor compliance with relevant laws and regulatory requirements. Since the passing back of management and control to the Association, the B&LA has been obliged to meet the requirements of a Memorandum of Understanding (MOU) between itself and the FSA and has been working towards its full execution.
Though work with the Association overshadowed the FSA’s early days and still continues to be a prominent part of its work programme, the FSA has gone on to define itself not only by its work with the Association, but also by reason of its simultaneous overall work and results with numerous entities since its inception. The FSA’s work has resulted in appropriate and timely corrective actions to major areas of vulnerability across the board in the financial services sectors under its supervision, and the improvement of compliance levels in many important areas. Such results have redounded favourably, not only at an individual institutional level, but in some cases sectorally, thus serving to promote financial stability at the national level.
To date, the FSA has successfully implemented complete cycles of examinations of its relevant licensees in the International Financial Services (IFS), Insurance and Money Transfer Business sectors. Its MOU with the B&LA also continues to yield positive results. All of this work, will continue under a risk based supervisory approach that focuses on the weaker institutions, as the FSA seeks to achieve its statutory objectives and mandate. The FSA continues to strengthen its relationships with its partner institutions on local, regional and international financial sector developments, and engage its regulatory counterparts on matters of common interest.
The FSA recently completed its Strategic Plan 2016 – 2018, utilizing its experiences of 2012-2015, to refine strategy and key deliverables. Work on key local, regional and international initiatives, as well as core regulatory work, will continue in line with targets and already established processes. However, of notable mention is that the FSA is engaged in the further strengthening of its supervisory regime of all sectors, by implementing a more formalized risk based and consolidated supervisory system, reviewing Financial Soundness Indicators to ensure suitability and crafting a crisis management plan, with components of stress testing, prompt corrective actions (PCA) and stabilization initiatives. The FSA’s enhanced focus on macro prudential policy and financial stability and sustainability in its next three years, forms the backbone of its Strategic Plan for the next three years.
While the FSA is fully cognizant of the progress that it still has to make, it is able to demonstrate the successful pursuit of its mandate by its work and results to date.
Financial Services Authority
November 12th, 2015.