The Financial Services Authority (‘FSA’) was established on November 12th 2012 as an autonomous statutory body pursuant to provisions of the Financial Services Authority Act, No. 33 of 2011 (‘the FSA Act’).
The FSA was established for the purpose of regulating the international (offshore) financial and non-bank financial sectors, the latter comprising Credit Unions, Insurances, Pensions, Building Societies, Friendly Societies and Money Remitters.
The establishment of the FSA in 2012 was a regulatory development of historic significance to St. Vincent and the Grenadines, as it brought together an amalgam of different regulatory entities into a single regulatory body, which was unprecedented. Such constitution has yielded substantial benefits by consolidating resources and optimizing efficiencies.
The FSA’s role, functions and powers are outlined in the FSA Act and its regulatory objectives are enshrined in the FSA’s core guiding principles, also outlined therein. These include, in sum, the protection and fair treatment of consumers, the enhancement of market integrity and financial stability, and the promotion of fair competition. The FSA’s core role is to administer the provisions of the FSA Act and all other relevant enactments. Its core function is to supervise the operations of financial entities to promote compliance with their respective governing legislation and other applicable law, including the anti-money laundering (AML) and counter financing of terrorism (CFT) laws of this country. The FSA goes a step further to promote not only compliance with the law but international best practices.
The FSA Act equips the FSA with appropriate powers to be able to effectively carry out its functions and captures best international regulatory and supervisory practices. Its provisions address internationally accepted requirements of the FATF on AML and CFT, and that of the OECD on tax transparency, in key areas such as regulatory access to information and sanctioning powers available to regulators. The FSA Act bolsters existing exchange of information provisions in sector specific legislation, as well as the Exchange of Information Act. The mettle of this Act has withstood one of the highest regulatory tests in the form of intervention and assumption of administrative control of a major financial institution, without the need for a lengthy court process.
Apart from having a comprehensive legislated mandate and apposite regulatory powers, the FSA in its very early stages developed an appropriate accompanying administrative framework to properly discharge its functions. The FSA is staffed by a cadre of qualified multi-disciplinary professionals with relevant legal, financial, accounting and regulatory backgrounds. It is governed by an independent Board of Directors with requisite qualifications and experience in keeping with statutorily stipulated requirements. It is also well buttressed by technical assistance from the Caribbean Regional Technical Assistance Centre (CARTAC), an IMF Funded technical assistance organization.
Over the past years, the FSA has forged full speed ahead to evolve into a professional and specialized organization, engaged in the responsible execution of its legal mandate. It has utilized wide ranging regulatory powers to undertake various regulatory and empowerment actions to foster compliance with governing legislation and to promote stability in the operations of financial entities.
The FSA urges that each member of the regulated sector ensures that it is well positioned to easily demonstrate its accountability as well as its integrity, to its consumers, stakeholders (particularly its regulator) and the public at large. Being able to demonstrate sound governance structure and systems, compliance with governing legislation, prudential requirements and best practices and thus transparency and accountability as an institution, is no longer a choice on the part of the regulated sector. Voluntariness has long been superseded by the practical imperative need for regulatory compliance in today’s financial world. Any deviation therefrom has the potential for irrepressible adverse impact on the micro and macro- economic stability and the reputation of our country, thus heightens the need for every member of the regulated sector to be able to demonstrate regulatory compliance, more so now than ever before.
Against this backdrop, it bears underscoring that the FSA cannot fail to have a strong appreciation of its own role, responsibilities and accountability. Such awareness invariably tends to become even more intensified when adverse situations arise or desired results are not attained, even though it is commonly recognized that even the best of regulatory efforts cannot always prevent failed institutions or fraud. Thus, in awareness of the matrix of challenges which frequently arise, the FSA’s strategy and approach is reviewed on an ongoing basis, in order to continuously improve our results.
