British Virgin Islands regulatory inspections and their importance
Licensees and their operators should take note that the BVI Financial Services Commission (FSC) has recently published reports focussing on the importance of inspections in the forthcoming year, as well as their findings.
We set out two key publications below:
The FSC’s: 2024/25 inspection plan
The inspection plan provides insight into the FSC’s upcoming inspection cycle, including information on which sectors will be targeted and the themes that will be covered as a part of the FSC’s on-site and desk-based reviews.
For the 2024/2025 inspection cycle, the FSC will visit approximately 50 licensees, ranging from – trust and corporate service providers, investment business, banks, money services, and insurance licensees.
The potential areas of investigation will involve themes surrounding: reliance on third parties, customer due diligence, on-going due diligence and enhanced due diligence, verification of legal persons and arrangements, and risk assessments.
For more information, the inspection plan can be found here.
The FSC’s thematic inspection initial findings: Reliance on third parties/introduced business relationships
In this report the FSC examines matters such as reliance on third parties, contents of written agreements, testing of business relationships, identification procedures in relation to new and continuing business relationships, reliance on third parties, third party business relationship agreement and obligations to test business relationships. The FSC also provides useful compliance considerations as a part of the findings.
For more information, the initial findings can be found here.
Licensees are urged to ensure that they have adequate policies and procedures in place as relevant to their regulated business and more importantly that they are following these policies and procedures on a day-to-day basis. This will ensure that there is no breach which can lead to consequences for non-compliance and in turn possible enforcement action.
Relevant persons in the BVI’s various financial services sectors are urged and reminded that they have an obligation to ensure that they are always acting in compliance with the various regulatory laws, regulations, rules, and guidance that apply to them, including but not limited to matters related to anti-money laundering and countering terrorist financing etc.
Regulatory inspections are the mechanism that regulators use to ensure a safe, robust, and reliable regulatory environment and in relation to regulatory products offered to customers. Should licensees need assistance in preparing for a regulatory inspection or with any remediation exercises following the issuance of a draft or final inspection report from the FSC following either a thematic or general inspection, please do feel to get in touch with us.
The FSC’s press release can be found here.
