The Isle of Man Financial Services Authority (IOMFSA) has unveiled plans that it wants to change the way it is funded.
Currently, the regulator receives half of its funding from industry levies and half from the island’s Treasury, but this could change soon.
The IOMFSA is looking to move away from the 50/50 structure to receive 100% of its money from industry levies.
This will very likely result in higher industry fees for companies based in the Isle of Man.
International Adviser reached out to industry players to understand what impact the move could have on the sector.
Independence
Peter Kenny, chief executive at Quilter International, said that the regulator’s decision was inevitable, as many other jurisdictions currently operate under a predominantly industry–funded model.
“Whilst this will mean an increase in regulatory fees for Isle of Man-based regulated companies, it will underpin the independent status of the regulator which international standard setters and consumers regard as being important for effective regulation.
“We expect an increase in fees over the next two years to be proposed in a consultation paper with a gradual move towards a predominantly industry-funded model”.
Mike Foy, chief executive at Utmost Group Isle of Man, thinks the change in funding model will strengthen the regulatory regime in the island.
“The maintenance and development of a robust regulatory authority is key to the continued success of the industry, providing long-term reassurance for advisers and their clients that they are transacting with a jurisdiction of high repute.
“We have yet to see the consultation and discussion papers and the detail therein but will engage fully in the consultation regarding the predominantly industry funded model.”
Regulatory equilibrium
Neil Chadwick, head of technical services at RL360, said that although fees will increase, the Isle of Man watchdog will need to perform a balancing act between funding and regulatory action.
“The IOMFSA have always been very open in their desire to move in this direction and will be engaging with industry representative bodies (such as the Manx Insurance Association) and individual businesses.
“It’s inevitable that licence fees will increase for some or all sectors, the key will be to align any increase with the level of supervisory activity required.”
Jonathan Hall, general manager at Canada Life, added that the most important thing is to protect consumers and that he, like many others, will wait for additional information and the publication of the consultation and discussion papers from the regulator.
“At this stage, I will be looking to see that, under the new arrangements, the independence of the regulator is maintained, and the regulator has sufficient resources to be effective.
“By this I mean the regulator is able to protect the interests of customers whilst adopting an approach which is flexible, pragmatic and proportionate.”
