Feedback sought on proposed new funding model
Feedback is being invited on the proposed introduction of a new funding model and fees structure for firms regulated or supervised by the Isle of Man Financial Services Authority.
The intention is to put in place a more sustainable approach that aligns with international best practice, while being mindful of the Island’s competitive position.
A consultation has been published online today setting out the proposed fees and next steps in the transition towards a predominantly industry-funded model.
The move represents a step change for the regulatory environment in the Island and follows the announcement made by Treasury in 2020, and in subsequent Budgets, to cut the level of financial support provided by the Government. This subvention is currently passed on to firms in the form of reduced fees.
A range of factors has been considered as part of the overall process and the model outlined in the consultation document, which has been developed with input from independent advisers, will be phased over three years.
Firms in the Isle of Man are currently subject to comparatively lower fees for regulation and oversight compared with similar jurisdictions. At the same time, the resources and costs associated with maintaining a robust regulatory environment continue to increase.
The new funding model will support the Authority’s work to protect consumers, meet the needs of a dynamic industry, and enhance the Island’s international reputation, while reducing the level of taxpayer subvention.
Treasury Minister David Ashford MHK said: ‘The vast majority of the world’s financial services regulators are funded by industry and the aim is to bring the Isle of Man into line with that model. The Authority currently receives a significant level of taxpayer funding and this is simply not sustainable, particularly as global and economic events continue to intensify the pressure on public finances. Increasing the contribution made by businesses towards the cost of their regulation and oversight is an appropriate step and will allow more of our taxpayer income to be used for essential public services.’
The consultation document sets out the annual fees, transaction fees and application fees that would be payable from 1 April 2023, as part of a simplified and more consistent funding structure.
Bettina Roth, Chief Executive Officer of the Authority, said: ‘In the interests of full transparency, we are highlighting the fees that will be required to achieve the target of being predominantly funded by industry. Our focus is on implementing a structure where the fees are proportionate, competitive, and more accurately reflect the regulatory activities being carried out. The new funding model will support efforts to ensure the continued prosperity of the Island’s financial services sector.’
She added: ‘The impact of the changes will be felt differently by each fee payer depending on factors such as their business model, size, and client base. With this in mind, we are proposing to phase in the changes over three years to allow existing businesses time to plan. It’s important to hear the views of our stakeholders and I would encourage people to respond to the consultation.’
Feedback can be emailed to Policy@iomfsa.im or submitted to Andrew Kniveton, Isle of Man Financial Services Authority, PO Box 58, Finch Hill House, Bucks Road, Douglas, IM99 1DT.
The closing date for responses is 24 June 2022.