The Financial Services Regulatory Authority (FSRA) is the single regulatory body which licenses, supervises and regulates the operations of the financial sector. The FSRA was established through the enactment of the Financial Services Regulatory Authority Act, No. 13, 2011 (FSRA Act) and commenced its operations in January of 2014 ending the transitional arrangement under Section 48 of the FSRA Act.
The FSRA assumed all responsibility of the Financial Sector Supervision Unit (FSSU) and the credit union supervision function of the Department of Co-operatives within the Ministry of Finance. Additionally, it regulates the Saint Lucia Development Bank (SLDB).
The FSRA’s mission is to maintain the integrity of the financial sector through the efficient and effective administration of the laws and regulations, application of best international standards and practices, and effective supervision of registered entities operating in the sector.
The FSRA has the objectives to fulfil general and specific responsibilities enshrined in the respective legislations, to develop a sound financial system, boost market confidence, ensure consumer protection, to ensure that the legislative framework is effective, appropriate and consistent with international standards and best practices, and promote Saint Lucia’s reputation as an efficient financial jurisdiction. In that regard the FSRA is entrusted with the administration of the following pieces of legislation:
- Insurance Act, Chapter 12.08
- International Insurance Act, Chapter 12.15
- International Banking Act, Chapter 12.17
- International Mutual Funds Act, Chapter 12.16
- Co-operative Societies Act, Chapter 12.06
- Registered Agent and Trustee Licencing Act, Chapter 12.12
- Money Services Business Act, No.11 of 2010
- Saint Lucia Development Bank Act No.12 of 2008
Standards for Success
The success of the Authority will be determined by the effective execution of its mandate as set out in legislation and its overall mission statement. One of the key elements for success is attaining mastery in what we do. To this end, the FSRA has placed tremendous focus/emphasis on ensuring that the compliment of staff is well trained, qualified and suited for its need.
Recruiting and selecting the right people is of paramount importance to the continued success of the FSRA. The FSRA’s Recruitment and Selection Policy sets out how to ensure, as far as possible, that the best people are recruited on merit and that the recruitment process is free from bias and discrimination.
Whilst the FSRA has a management hierarchy, similar to what exists in many organisations, there is a strong culture of team work and sharing of advice on industry matters from bottom-up / top-down. The FSRA takes a holistic approach in the development of its training programme and invest in the continued professional development of staff in order to ensure that staff is up to speed with the market dynamism and are well equipped to respond to market changes in line with international best practice.
We believe that stakeholder engagement is one of the core skills and key activities which enable effective regulation/supervision of the sector. We understand that stakeholder engagement is crucially different from stakeholder management. The FSRA takes a proactive approach in that regard as it seeks to engage stakeholders at an early stage to discuss issues which may impact them and is prepared to consider making changes to plans as a result of stakeholder engagement.
Stakeholders are not only engaged in discussions relating to laws and regulations for the sector, but as part of a proactive approach the FSRA holds quarterly meetings with certain key stakeholders (Insurance Council) to discuss the industry in general.
We believe that building trust with stakeholders is very important, aided by understanding their viewpoints and motivations. Understanding and being transparent about the motivation of both stakeholders and our Organisation can help overcome differences. Thus, successful stakeholder engagement is a win-win for both the regulator and market participants.
Market Conduct Supervision
It is important to develop a sound market conduct framework to support the effective supervision of regulated entities and to provide protection to consumers. Current best practices for consumer protection and market conduct must be adopted.
Effective prudential supervision is the core of the FSRA’s mandate.
The FSRA’s objectives in that regard are: to promote the safety and soundness of all regulated entities, specifically for insurers and deposit taking institutions, to facilitate an appropriate degree of protection for policyholders and depositors. In that regard, heavy focus is placed on statutory solvency and ensuring that future liabilities are adequately provided for.
The FSRA’s approach to regulation and supervision has the following characteristics:
- The FSRA assesses whether regulated entities are financially sound, more specifically, whether insurers and deposit taking institutions provide appropriate protection for policyholders/depositors and whether entities continue to meet the Threshold Conditions.
- The FSRA assesses firms not just against current risks, but also against those that could plausibly arise in the future. Where the FSRA deems it necessary to intervene, it aims to do so at a timely stage.
- The FSRA uses a risk based approach and close attention is paid to those firms that pose the greatest risk to the stability of the financial system.
Partnering with Other Institutions
In fulfilling its mandate the FSRA also collaborates with regulators in the region to discuss the financial soundness of entities operating across the Eastern Caribbean Currency Union (ECCU) and CARICOM. Systemically important entities are identified and enhanced supervision is conducted on those entities. The FSRA also participates in regulatory colleges annually at which selected companies’ financial soundness and general compliance with the laws of the respective jurisdictions are assessed and discussed.
The FSRA also ensures that it works closely with the Financial Intelligence Authority, the Registry of Companies and Intellectual Properties and the Registrar of IBCs.