Accountability & Corporate Governance
The Board of the Isle of Man Financial Services Authority
The Isle of Man Financial Services Authority (“the Authority”) is a Statutory Board. The role and responsibilities of a Statutory Board and its members are set out in the Statutory Boards Act 1987 (except where this Act is varied by the Financial Services Act 2008 and the Insurance Act 2008) and in Council of Ministers guidance. Appointments to the Board of the Authority are approved by Tynwald.
The Board of the Authority consists of not less than seven qualified people appointed by Treasury and approved by Tynwald. The Board currently comprises a Non-Executive Chairman and Non-Executive Deputy Chairman, the Chief Executive and further Non-Executive Members. The quorum of the Board is three Members.
Members normally go out of office between two and five years after appointment, as set out in the documents of appointment, and their remuneration is set down by Order.
Meetings are held on a regular basis and additionally on an ad hoc basis as required.
The constitution of the Authority and its functions are described in Schedule 1 to the Financial Services Act 2008 and Section 1 of the Insurance Act 2008. These Acts provide that the Treasury, after consulting with the Authority, may give the Authority written guidance or directions of a general character. This must be in the public interest and not to influence particular cases, nor to prejudice the operational independence of the Authority. The Authority must take account of any such guidance and comply with any such directions. The Authority’s Board members are responsible to the Treasury for the proper operation of the Authority and its compliance with the requirements of the Financial Services Act 2008, the Insurance Act 2008 and the Retirement Benefits Schemes Act 2000.
As a regulator, the Authority is subject to challenge in carrying out its functions, and is financed partly out of public funds. These factors impose a strong responsibility on the Authority to demonstrate that it is acting properly at all times, in the same way that the Authority expects a similar behaviour from its regulated entities.
The Authority operates under a Corporate Governance Framework which incorporates the requirements of the Isle of Man Government Corporate Governance Principles and Code of Conduct. The Authority is required to report annually on its compliance with the Government’s Code of Conduct, in the form of a Statement of Internal Control signed by the Chief Executive and submitted to the Chief Financial Officer.
Memoranda of Understanding
The Authority has entered into a Memorandum of Understanding (“MOU”) with the Isle of Man Treasury. This MOU sets out the framework for co-operation between the Treasury and the Authority. In particular, the MOU establishes arrangements to ensure that the Authority is accountable to Treasury for its actions, and clarifies the circumstances in which liaison and dialogue could flow between both parties.
Accountability and scrutiny
The Authority is accountable and subject to scrutiny in the following areas:
- Tynwald: appointment of Members, Corporate Plan, annual report and new legislation;
- Tynwald: the Chief Executive of the Authority is invited to appear before the Economic Policy Review Committee each year to provide oral evidence to the committee;
- Government and Treasury: strategic objectives, legislative policy and proposals, budgeting and funding and financial controls over employee related costs;
- Industry and public: consultation on regulatory and supervisory proposals;
- Financial Services Tribunal, Insurance Tribunal, Retirement Benefits Schemes Tribunal and Collective Investment Schemes Tribunal.
The Authority’s regulatory and supervisory approach is also subject to ongoing review by standard-setting organisations including the International Monetary Fund and MONEYVAL.
The Authority endorses the principles of openness and transparency contained in the Code of Practice on Access to Government Information and, in fulfilling its functions, the Authority endeavours to be as open and transparent as possible without compromising confidentiality.
The Authority operates within a budget agreed with Treasury. The Authority’s revenue and expenditure is subject to an annual audit by the Government’s external auditors, and the Authority is subject to review by the Government’s internal audit department. The Authority publishes its financial statements each year as part of its Annual Report.