As a reputable international financial centre with full access to global markets, it is essential that the Island retains the confidence of its counterparties through the adoption and implementation of high regulatory standards. The Isle of Man Financial Services Authority (the “Authority”) therefore attaches great importance to making sure that its policies and procedures conform to internationally accepted best practice.
The Authority is committed to compliance with the Basel Core Principles ("BCP") in prudential regulation of banking institutions, with the Insurance Core Principles ("ICP") of the International Association of Insurance Supervisors (“IAIS”) in respect of insurance business and with the International Organisation of Securities Commission’s (“IOSCO”) Objectives and Principles of Securities Regulation. It is committed to compliance with the Financial Action Task Force ("FATF") Recommendations on the prevention of money laundering and the countering of the financing of terrorism.
The Authority is a member of the IAIS, IOSCO and the International Organisation of Pension Supervisors (“IOPS”) and has been accepted as a signatory to both the IAIS and the IOSCO Multilateral Memoranda of Understanding (“MMOUs”) in respect of cooperation and the exchange of information. The Authority is also a member of GIFCS (the Group of International Financial Centre Supervisors which was formerly known as the Offshore Group of Banking Supervisors) and GIICS (Group of International Insurance Centre Supervisors which was formerly known as the Offshore Group of Insurance Supervisors). In addition, the Authority is a member of, and participates in, a number of supervisory colleges in respect of groups of which Isle of Man insurers are members and liaises with supervisors in the Isle of Man and elsewhere about matters of common interest including systemic risk, group-wide solvency and group crisis management plans.
A number of official international organisations have devoted much time to the assessment of offshore centres generally. This has been mainly to assess their practices against global standards to ensure that they do not present a weak link in the financial system generally. The Island welcomes this scrutiny, and indeed has benefited from the subsequent findings.
In 2008/2009 the IMF conducted a Financial Sector Assessment Programme (“FSAP”) on the Isle of Man covering the Island’s compliance with international standards for anti-money laundering and countering the financing of terrorism, the Basel Core Principles for Effective Banking Supervision and the Insurance Core Principles. The FSAP also covered stress testing in respect of both the banking and insurance sectors.
The report concluded that “…the Isle of Man is broadly compliant with most aspects of the FATF recommendations…”, having continued to upgrade its requirements significantly. In addition, the report found that the Island has a general high standard of financial sector regulation and supervision, and a “very high standard of compliance” with the Basel Core Principles for Effective Banking Supervision; in respect of insurance, the report noted that "the IOM has maintained and improved on the generally high standard of compliance with the ICP, which was noted in the previous assessment. The IPA is commended for its proactive stance in establishing and enforcing high standards for supervision, which have contributed to the maintenance of the IOM’s good reputation as an international financial centre.".
The report further noted that “the Isle of Man authorities take their responsibilities in the area of international co-operation seriously”, citing supervisory co-operation, mutual legal assistance and tax information exchange agreements.
The Isle of Man’s continued improvement in its compliance with international standards for countering money laundering and terrorist financing was confirmed by MONEYVAL in 2013. The Island’s First 3rd Round Written Progress Report outlining progress made by the Isle of Man to implement recommendations previously identified by the IMF, was presented and adopted at the MONEYVAL Plenary in September 2013 and subsequently published. Following the Progress Report prepared by the MONEYVAL Secretariat, the Plenary expressed itself “satisfied with the information provided and the progress being undertaken and thus approved the progress report and the analysis of the progress on the core Recommendations”.
The next on-site evaluation of the Island will take place in 2016 under MONEYVAL’s 5th round of evaluations, when the Island will be assessed against the revised FATF recommendations issued in 2012.
The Island has also worked closely with the United Nations Office for Drug Control and Crime Prevention, particularly in support of its Offshore Initiative.
The Isle of Man is committed to the adoption of global international standards on tax co-operation and exchange of information.
From 1 July 2011 the Island moved to automatic exchange of information with EU member states under the European Union Savings Directive (EUSD).
Also in 2011 the Global Forum on Transparency and Exchange of Information for Tax Purposes published its Peer Review Report of the Isle of Man. The report set out the Isle of Man’s implementation of the international standards of transparency and exchange of information for tax purposes. On 3 August 2015 the Global Forum published its latest ratings which confirmed the Isle of Man is one of 21 jurisdictions (from 81 rated) to be given the top ‘compliant’ rating.
During 2013 the Isle of Man signed Intergovernmental Agreements ("IGA") with the United Kingdom and the United States of America. These IGAs improve international tax compliance through automatic exchange of information, and in the case of the USA to facilitate the implementation of the Foreign Account Tax Compliance Act ("FATCA").
The Isle of Man is one of more than 90 countries which have committed to automatic exchange of information under the Common Reporting Standard on Automatic Exchange of Information ("CRS"). The Island is due to make its first exchanges under the CRS in 2017.