introduction to the tsp licensing regime
DESCRIPTION
Introduction to the TSP Licensing Regime. Financial Supervision Commission 24 May 2005. Welcome. Jane D N Bates Head of Authorisations and Companies. Preliminaries. Housekeeping The Authorisations Team Timescales Today’s agenda. Housekeeping. Fire exits Mobile phones Handouts - PowerPoint PPT PresentationTRANSCRIPT
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Introduction to the TSP Licensing Regime
Financial Supervision Commission24 May 2005
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Welcome
Jane D N BatesHead of Authorisations and
Companies
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Preliminaries
Housekeeping
The Authorisations Team
Timescales
Today’s agenda
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HousekeepingFire exits
Mobile phones
Handouts
Slides on website
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Who are the Authorisations Team?
John Aspden – Chief Executive
Jane Bates – Head of Division
Liz Berry – Senior Policy Advisor Paul de Weerd – Senior Manager
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Who are the Authorisations Team?
Justine Bowen – ManagerHelen Cullen – ManagerKerry Thomson - ManagerMarie Ball – Supervision OfficerScott Dixon - Administrator
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What do we do?
ALL current licensing and vettingBanksBuilding societiesInvestment businessSchemesCSPs
NOT ongoing supervisionTSP licensing and vetting
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The TSP Regime - Where we are now?
Fiduciary Services Bill passed by TynwaldAwaiting Royal AssentAppointed DayEnactment of the Codes“Open for business”
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Today’s Agenda
Legislation update
How the Commission will process applications
Coffee (and chance to put in written questions)
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Today’s Agenda (cont’d)
Preparing an application
Supervisory Regime
Panel session
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TSP Legislative Framework
Liz BerrySenior Policy Adviser – Companies
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TSP Legislative Framework
Legislation & guidanceTSP Regulated Activities“New” TSP Licence ExemptionsTSP Licence CategoriesTSP Financial ResourcesLegislative Timetable
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TSP Legislative Framework
Corporate Service Providers Act 2000 updated
By Fiduciary Services Act [2005]
Collectively = Fiduciary Services Acts 2000 and 2005
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TSP Legislative Framework
Fiduciary Services (General Requirements) Regulatory Code [2005]
Fiduciary Services (Clients’ Money and Trust Money) Regulatory Code [2005]
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TSP Legislative Framework
Licensing Policy
Training & Competence Framework consultation
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Who needs a TSP licence?
TSP Regulated Activities –
By way of business
In or from Isle of Man
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Who needs a TSP licence?
“express trust”
Foundations
Annual licence fee banded by number of companies, partnerships and trusts
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TSP Regulated Activities
Acting as trustee, protector or enforcer
Trust administration
Trust Corporation (Trustee Act 1961, s.65A)
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“New” TSP Licence Exemptions
“Domestic” trusts (residence/domicile settlor/testator)“Specified Persons”
AdvocatesRegistered Legal PractitionerChartered & Certified Accountants
De minimis (individuals who are Specified Persons only)
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TSP Licence Categories
Category 1 – all TSP regulated activities except Trust CorporationCategory 2 – acting as co-trustee or protector (individuals only)Trust Corporation – all TSP regulated activities including functions reserved to Trust Corporations (trust & probate law)
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TSP Financial Resources
Fit and proper test (solvency criteria) General Requirements Code (Para.11 & guidance)
Applies to business as a whole (CSP & TSP)Going concern (solvency)
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TSP Financial Resources
Audited accountsMust provide sufficient informationConform to recognised standards (IAS, UK or US GAAP)Liquidity monitoring (solvency)Liquidity quarterly declaration
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TSP Financial Resources
Adequately capitalised (£25,000 paid up)
Sole trader (£25,000 segregated bank deposit)
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TSP Financial Resources
Matters on which Auditor required to report to FSC
Relates to annual audit workDirectors’ solvency declarationQuarterly liquidity declarationsClients’ money accountMaterial breaches of Act or Codes
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Legislative Timetable
Fiduciary Services Act [2005]Royal assent (June Tynwald?)Into operation (Appointed Day Order incl transitional arrangements)Rehabilitation of Offenders Act 2001 (Exceptions) (Amendment) Order 2005
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Legislative Timetable
After enactment
Fiduciary Regulatory Codes into operation
Amendment to Anti Money Laundering Code to include TSPs
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TSP Legislative Framework
Liz BerrySenior Policy Adviser – Companies
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How the Commission will process applications
Paul de WeerdSenior Manager - Authorisations
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Introduction
Information on the FSC website
A reminder of the licensing process
The order in which staff will handle applications
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Published Policies
Licensing Policy Consultative Document publishedSets out TSP policyEventually consolidate licensing policy for
all regulated business
Training and Competency FrameworkConsultative document 18 MarchSets out benchmark standardsRecognises value of experience
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Improving Information
Handbooks are now free
Guidance on Website to be updated a.s.a.p. after Royal Assent is granted Application form in draft
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Handling the application
Few changes: familiar processCarry out the vetting of individualsReview and discuss with the applicantReport to Chief ExecutiveChief Executive’s recommendationCommissioners decide
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Changes to the paper
Applicant receives a copy of the entire paper
New structure: risk-based
Includes some information about individuals
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Changes to the vetting procedures
Never vetted – full PQ and BQLast vetted over 5 years ago – full PQ and BQLast vetted 2-5 years ago – PD (and last employer’s reference and/or new professional memberships if relevant)Last vetted less than 2 years ago –material changes only
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Workflow planning
150 applications
Small team
Efficient handling of workflow
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Workflow planning
Handle in order of receipt (in principle)Handle in small batches Availability of contacts at TSPWrap up the “subject to’s” quicklyIssue the licence and move on
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Issuing the licence
Licence as soon as ready
No big first batch
To the Board each month for signature
Not signed between Board meetings
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Appearance of the Licence
Consolidation in due course
Separate CSP and TSP licences for now
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Questions
Any comments or questions now?
Coffee break
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Preparing for and Submitting an
Application
Jane D N BatesHead of Authorisations and
Companies
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Introduction
Why it is important to prepare
Main areas to address
Gathering data
Presenting your application effectively
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Why Prepare?
Commission “shall not grant a licence unless it is satisfiedit is satisfied…”
CSP licence not guarantee of TSP licence
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The Three Tests
Integrity
Solvency
Competence
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Solvency
Quarterly declaration of solvency
Guidance: £25,000 capital and reserves
Turnover and expenditure in the audited accounts
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Competence
Two part test:
The competence of the business as a whole to carry on TSP business in accordance with the Act and Codes
The competence of each key person to carry out his or her role
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Demonstrating Competence
- the business as a whole Include a comprehensive Business Plan
Principal sources of business The services to be offeredStaff structureExperience within the TSPProfessional advisers here and overseasServices or advice bought in Control procedures Training
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Demonstrating Competence – Key
PersonsLicensing PolicyTrust Corporations Training and Competence FrameworkExperience and qualificationsWe encourage CVsExplain experience where it is not obviousDo not under- or over- sell yourself!
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Gathering DataAccounts and financial projections
Staffing and Group structure
Corporate trustees/protectors and what they do
Business Plan
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Summary
Licensing is not automatic, but
CSP Licenceholders well placed
Focus on demonstrating TSP competencies
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Questions
Any comments or questions now?
Feedback forms at end of session
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The Supervisory Regime
Paul de WeerdSenior Manager -
Authorisations
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Introduction
Initial thoughts
Build on what we have
Continuity
Incremental development
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CSP Supervision Team
Michael Weldon – Head of SupervisionSue Ferrario - ManagerGeraldine Smith - ManagerLynda Cain – Supervision OfficerNathan Holden – Supervision Officer
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Handover from Authorisations
Authorisations and CSP team work togetherSame relationship manager for all fiduciary businessAs TSP licensing nears completion, some staff will move to Supervision
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CSP Supervision Processes
Annual Compliance ReturnBusiness MeetingsVisits:SupervisoryFocusOn-Site Risk Assessment
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TSP Supervision process
Extending the CSP process:Quarterly declaration of solvencyExtend the Annual Compliance ReturnExtend visits to look at trusts as well as companies
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Private Trust Companies
Administering the exemptionExempted if administered by a TSPRequirement to notify FSCList with Annual Compliance Return
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Focus of Supervisory Visits
Focus on process:KYCAdministration, Record-keepingAccounting
Not second-guessing trust law
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Summary
No news is good news!
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Over to the Panel
Our guest panellists:
Morning: John Whillis (STEP), Michael Shimmin (ACSP) and John Rimmer (Law Society)
Afternoon: Paul Dougherty (STEP), Chris Eaton (ACSP) and Paul Beckett (Law Society)