Phased implementation of new fees for financial regulation and oversight

The phased implementation of a new fee structure for firms regulated or overseen by the Isle of Man Financial Services Authority will take effect from 1 April 2023.

Tynwald Members approved the Fees Orders and Regulations 2023 today (Tuesday 21 March 2023) marking a key milestone in the transition to an updated funding approach for the Island’s finance industry.

The legislation sets out the revised fees for regulated entities and designated businesses in 2023/24, 2024/25, and 2025/26. Changes are being introduced over three years to allow fee payers time to adjust.

Work to put in place the predominantly industry-funded model started in 2020 following the announcement made by Treasury to reduce the level of financial support the Authority receives from the Isle of Man Government.

Extensive engagement has taken place in order to develop a simplified, proportionate and more sustainable funding model that aligns with international best practice, while being mindful of the Island’s competitive position.

A range of factors has been considered, including input from independent advisers, the views of industry bodies, and feedback to three public consultations.

It was acknowledged that while fees in the Isle of Man have not altered significantly for many years, the costs associated with maintaining a robust regulatory environment continue to increase.

In future, the fees charged by the Authority will better reflect the nature and scale of activities being carried out by regulated entities and designated businesses.

Treasury Minister Dr Alex Allinson MHK said: ‘Most independent financial regulators are funded by industry and these changes will bring the Isle of Man in line with that model. Recent events have intensified the pressure on public finances, so it is considered appropriate for businesses to contribute more towards the cost of their financial regulation and oversight.’

Bettina Roth, the Authority’s Chief Executive Officer, added: ‘The updated fee structure has been calculated to replace the taxpayer subvention. It will not generate any additional revenue. While the way the Authority is funded may be changing, we will continue to focus on providing value for money and maintaining standards of excellence in support of the Island’s financial services sector.’