Compliance Regime

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Compliance Regime

Kenneth Baker

Deputy Managing Director

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What is a Compliance Regime?

• Appointment of an individual to oversee the compliance function

• Development & application of compliance policies and procedures

• Review of compliance policies & procedures to test effectiveness

• On-going training for employees

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Current Regime – Compliance Officer

• Regulated Person designates one of his staff as Compliance Officer

• Compliance Officer shall be a senior officer

• Compliance Officer shall act as a liaison between Regulated Person and Commission

• Compliance Officer shall prepare and submit to the Commission written reports

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New Regime - Individual with Responsibility for Compliance

Oversight• Licensee shall designate one of his

staff as the individual responsible for compliance oversight

• Individual shall be a senior officer

• Individual shall act as a liaison between the Licensee and the Commission

• Individual shall prepare and submit to the Commission written reports

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New Regime - Compliance Function

Proposed new Section 34 of the Financial Services Commission (Amendment) Act, 2006:

• Every Licensee shall ensure the compliance function is performed; and

• Every Licensee shall appoint an individual approved by the Commission to oversee the compliance function.

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New S.34(1) FSCA

Licensee to establish and maintain systems and controls to ensure compliance with:

• Financial Services Commission Act and all financial services legislation;

• Regulatory Codes; and• Directives issued by

Commission.

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New S.34(2) FSCA

Licensee shall establish and maintain a compliance procedures manual complying with the requirements specified in Regulatory Code

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New S.34(3) FSCA

Individual responsible for overseeing compliance function shall have an obligation for:

• Reporting to the Commission;

• Reporting to the directors; and

• Acting as a liaison between the Licensee and the Commission.

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New S.34(4) FSCA

Individual responsible for overseeing the compliance function must satisfy the Commission’s “fit and proper” criteria:

• Honesty, integrity and reputation;

• Competence and capability; and• Financial soundness.

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New S.34(5) FSCA

Individual responsible for overseeing the compliance function shall have responsibility for:• Establishing and maintaining a

programme for training staff; and

• Overseeing the implementation of the compliance procedures manual.

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New S.34(7) FSCA

The Commission may issue a Regulatory Code specifying:

• Maintenance of compliance procedures manuals;

• Persons who may be appointed to oversee compliance function; and

• Reporting requirements to the Commission and directors.

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New S.34(8) FSCA

Person appointed to serve as Compliance Officer under the AML Code of Practice may be appointed to oversee the Licensee’s compliance function

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Who will Oversee the Compliance Function?

• Banks

• Company Managers

• Insurance Companies

• Insurance Intermediaries

• Private & Professional Funds

• Recognised Managers

• Managers and /or Administrators

• Public Funds

• Trust Companies

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Compliance Oversight -Banks

• General bank licensee – BVI resident individual

• Restricted bank licensee – BVI resident individual

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Compliance Oversight - Fiduciary Services

• Company Managers – BVI resident individual

• General Trust Licensee with physical presence – BVI resident individual

• General and Restricted Trust Licensee without physical presence – individual who may be an employee of Registered Agent

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Compliance Oversight - Insurance

• Captive insurer – Insurance Manager, otherwise an approved, BVI resident individual

• Credit Life re-insurer – Insurance Manager, if one exists, or an approved, BVI resident individual

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Compliance Oversight - Insurance

• Locally incorporated Domestic insurer – an approved BVI resident individual

• Overseas incorporated Domestic insurer – an individual who fulfils that function to the satisfaction of the insurer’s home regulator

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Compliance Oversight - Insurance

All of the following must appoint an approved BVI resident individual:

• Agents;

• Brokers; and

• Insurance Managers.

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Compliance Oversight - Investment Business

• Private & Professional Funds – one of a fund’s functionaries (for example, fund manager or fund administrator)

• Public Funds – one of a fund’s functionaries (for example, fund manager or fund administrator)

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Compliance Oversight - Investment Business

• Recognised Managers – responsible licence-holder

• Managers &/or Administrators – an approved BVI resident individual unless the manager or administrator is non-resident, in which case the compliance function may be performed by a non-resident individual

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Compliance Oversight - Notification

Where an individual is not required to be approved, notification of the individual with responsibility for oversight of the compliance function must be submitted to the Commission

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AML Code of Practice

The AML Code of Practice is to be amended in line with proposed new Section 34 FSCA

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Implementation

• Financial Services Commission (Amendment) Act, 2006

• Distribute answers to FAQ

• Distribute Guidance Notes

• Distribute Application Forms

• Advise implementation date of regime

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Contact details

• compliance@bvifsc.vg

• enquiries@bvifsc.vg