The Isle of Man Financial Services Authority has published the findings of phase two of its thematic review relating to Trust and Corporate Service Providers (“TCSP”).
Desk-based inspections were conducted during 2023 to test the effectiveness of Business Risk Assessments (“BRA”) at a total of 70 licence holders.
A BRA is an important part of a firm’s compliance and risk management framework to help detect and prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction.
Authority observations
The phase two TCSP report, which is available to view online, sets out the findings, including examples of best practice, case studies, and the Authority’s observations.
The data will inform the Authority’s overall picture of risk and has fed into the AML/CFT Handbook and guidance aimed at helping Island firms to meet their obligations in respect of the Anti-Money Laundering and Countering the Financing of Terrorism (“AML/CFT”) Code 2019.
The National Risk Assessment identifies the TCSP sector as one of the highest risk business sectors in the Isle of Man. The Authority carried out the two-part review to evaluate the strength of BRA controls and processes in place a cohort of Island firms.
Feedback
Phase one focused on data collection and analysis, with a BRA questionnaire issued to 106 TCSPs.
The feedback from phase one is set out in a report published in July 2023. The desk-based inspections completed in phase two of the thematic enabled the Authority to gather further data and assess how BRAs are being used to evidence a firm’s understanding of the risks they face.
Thematic reviews continue to be a key part of the Authority’s supervisory approach, as they offer an efficient way to identify areas of risk.
This work supports the Authority’s objectives of protecting consumers, reducing financial crime, and maintaining confidence in the finance sector through effective regulation.
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