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St Vincent & the Grenadines

Supervisory Approach

Supervisory approach

The FSA’s mandate is to supervise and regulate the operations of specified non-bank financial entities, and to promote stability, public awareness and public confidence in the operations of these licensed operators.  The FSA adopts a risk based supervisory approach to ensure that institutions falling under its oversight are well supervised and that threats and risks are identified and addressed in a timely manner.

The FSA also utilizes internationally acceptable prudential standards to assess the condition and financial soundness of institutions which it supervises (IFRS, CAMELS, PEARLS. BASEL I and some components of BASEL II, IACS-ICPs).

The FSA is concerned with building financial stability to ensure that institutions are well-supervised and that emerging threats and risks are identified and acted upon in a timely and effective manner. A stable financial system is key to achieving other statutory objectives of maintaining market confidence, protecting consumers and reducing financial crime.

The FSA regularly engages in the on-going monitoring of an institution’s financial and operational condition with the objective of ensuring that these institutions comply with the minimum prudential requirements stipulated by the respective legislations. These functions are carried out mainly through off-site surveillance and on-site examinations. The off-site supervision process is done through submitted regulatory reports and financial statements as well as periodic trend analysis of selected ratios.

The on-site inspection involves assessing the qualitative risks that cannot be assessed offsite. On-site assessment aims at verifying the compliance with the requisite laws and regulations. It is the cornerstone of the supervisory process and involves the evaluation of an institution’s corporate governance through interviews with management, inspecting the written policies and procedures of the institution and the degree to which those written policies and procedures are followed, evaluating whether the institution’s financial statements accurately show the profitability and capital, checking the accuracy of accounting records, evaluating the adequacy of internal controls and the audit function as well as looking at investments and the risk appetite of the company.

On-site and Offsite supervision are mutually reinforcing and are designed to rapidly identify and diagnose emerging problems in individual institutions with a view to prescribing the most efficient resolution directed towards ensuring continued public confidence in the financial system.

The FSA receives technical support and/or is a member of the following:

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Supervisory Approach