Authority publishes findings of Moneylenders thematic review

The Isle of Man Financial Services Authority has published the findings from Phase 2 of a thematic review relating to the Island’s Moneylenders and due diligence.

A total of 20 Moneylenders were selected to take part in on-site inspections to build on the data gathered via responses to a questionnaire issued during the initial phase of the project.

The thematic inspections assessed how Moneylenders are meeting their obligations in respect of the AML/CFT Code 2019, specifically in relation to customer due diligence (“CDD”) and enhanced customer due diligence (“ECDD”), including source of funds (“SOF”) and source of wealth (“SOW”) requirements.

There were three main objectives of the Phase 2 inspections – Procedures and Controls, New Business Relationships and Enhanced Customer Due Diligence. The thematic project aimed to assess firms’ controls against the money laundering, terrorist financing, and proliferation financing (“ML/TF/PF”) risks posed to the designated business sector.

The Moneylenders Phase 2 Report, which can be accessed on the Publications section of the Authority’s website, sets out the key takeaways, examples of good practice and areas for improvement, together with the Authority’s observations on the findings. 

Firms from all licenced and registered sectors are encouraged to read the Phase 2 report and consider any action necessary to ensure their own CDD and ECDD (including SOF and SOW) procedures and controls are effective, up-to-date and properly documented.

Ben Higgins, a Manager in the AML/CFT Supervision Division, said: ‘This thematic project involved close collaboration with the Island’s registered Moneylenders, and we would like to thank all those involved. The value of finance outstanding at the end of 2023 was £938.96 million for Moneylenders, and being able to work with this important sector and produce these reports has been vital in strengthening our understanding of the effectiveness of the CDD/ECDD procedures and controls in place.’

He added: ‘Effective CDD and ECDD measures are key to firms understanding their customers and the ML/FT/FP risks they may be exposed to and are vital to counter and reduce the potential criminal abuse of the Island’s financial system. This work also supports the Authority’s overarching objectives of protecting consumers, reducing financial crime, and maintaining confidence in the Island’s finance sector through effective regulation.’