{"id":141325,"date":"2025-09-16T14:46:18","date_gmt":"2025-09-16T14:46:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/141325\/"},"modified":"2025-09-16T14:46:18","modified_gmt":"2025-09-16T14:46:18","slug":"fining-isle-of-man-finance-workers-could-hit-jobs-and-the-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/141325\/","title":{"rendered":"Fining Isle of Man finance workers ‘could hit jobs and the economy’"},"content":{"rendered":"

Leading law firm Appleby has written to Ministers and other politicians to express its \u2018deep concern\u2019 over \u2018onerous\u2019 proposals to introduce civil penalties for individuals working in the island\u2019s financial services<\/a> sector.<\/p>\n

The island\u2019s largest private practice law firm says the move threatens to harm the island\u2019s economy<\/a> and could lead to businesses shifting some operations elsewhere.<\/p>\n

There\u2019s been growing unease in the sector at how the Financial Services<\/a> Authority (FSA) has been handing out huge fines to businesses for often tick-box breaches of compliance with the anti-money laundering code.<\/p>\n

Critics contrast this with what they say appears to be the relaxed regulation of the island\u2019s egaming industry – leading to claims of \u2018two-tier-regulation\u2019.<\/p>\n

The FSA has been consulting on proposed changes that would enable it to impose fines not just on regulated businesses but also on those who hold or have held key roles with them, where there is evidence of misconduct or regulatory failings<\/a>. <\/p>\n

This would include directors and employees with significant decision-making power or control.<\/p>\n

It says this would bring the Isle of Man into line with \u2018long-established international expectations\u2019 and would help ensure the island is \u2018well-positioned\u2019 for future external assessments, such as the upcoming review by MoneyVal.<\/p>\n

MoneyVal is a Council of Europe body that evaluates how well countries comply with international standards to combat money laundering and terrorist financing.<\/p>\n

But Appleby says it is \u2018firmly opposed\u2019 to the move and has forwarded its concerns to the Chief Minister, Ministers and members of the Legislative Council.<\/p>\n

Isle of Man Today has seen its consultation feedback and a covering letter from Appleby partner Garry Manley, on behalf of the law firm, who says there is a widely-held perception that the FSA has become \u2018increasingly unaccountable\u2019. <\/p>\n

He says: \u2018Regulated businesses in the Isle of Man already face exceptional challenges in staffing compliance roles.<\/p>\n

\u2018The Authority is widely perceived as having taken an unfair and draconian approach to imposing civil penalties on regulated businesses in recent years.\u2019<\/p>\n

He says there is a perception that the FSA has moved away from engaging with businesses to remediate any technical shortcomings, and now imposes \u2018harsh, unreasonable and disproportionate\u2019 penalties even for technical breaches where there is no suggestion of negligence or deliberate non-compliance.<\/p>\n

\u2018Local regulated businesses (and their owners, directors, employees and officers) are seriously concerned that, if given these new powers, the Authority would adopt the same approach for individuals,\u2019 he says.<\/p>\n

In his email to the politicians, Mr Manley acknowledges it is unusual to send feedback of this nature to Tynwald members but said the law firm wanted to reflect the concerns of financial services clients, which many of them were reluctant to express directly to the FSA.<\/p>\n

His covering letter says the reason for this approach is not to criticise the FSA but because Appleby \u2018cares passionately about the Isle of Man\u2019s continued success as an international financial centre\u2019.<\/p>\n

\"Finch<\/p>\n

Finch Hill House, the headquarters of the island\u2019s FSA (Media IoM)<\/p>\n

He says that Appleby is \u2018deeply concerned\u2019, from conversations with clients and other contacts, that this success is being severely undermined by the widely held perception that the FSA is overlooking its statutory objectives and is \u2018increasingly unaccountable\u2019.<\/p>\n

And Mr Manley warned there are a number of significant financial services groups – major employers in the Isle of Man – that are considering their options to restructure some of their operations to other jurisdictions.<\/p>\n

He said this was in view of the perception that, in the interests of being perceived by MoneyVal to be firm, the FSA is \u2018overlooking the need to be fair and is disregarding the need for any sanctions that it issues to be reasonable and proportionate\u2019.<\/p>\n

Appleby says the proposed provisions are \u2018vastly more onerous and wide-ranging\u2019 than those in other jurisdictions, and in the UK, Jersey and Guernsey there are key limitations on the regulator\u2019s powers to impose civil penalties on individuals.<\/p>\n

In its consultation submission, Appleby claims that the proposals could prove counter productive as it could prevent businesses from finding skilled and qualified compliance staff.<\/p>\n

If civil penalties for individuals are to be introduced, they should be applied only where there has been a \u2018significant and material\u2019 breach of rules by a business and the individual was knowingly concerned in that contravention, Appleby added.<\/p>\n

In a statement, the FSA said: \u2018All the submissions are being carefully considered, and a feedback statement will be published.<\/p>\n

\u2018A separate consultation exercise on the secondary legislation needed for changes to the civil penalties regime will provide an opportunity for further industry, political and public scrutiny.<\/p>\n

\u2018The government is committed to keeping pace with evolving international standards as part of the co-ordinated national approach to combatting financial crime. External specialists have highlighted the absence of powers to impose civil penalties on key individuals as a significant weakness.<\/p>\n

\u2018The proposed change would provide the authority with an additional regulatory enforcement option already available to financial regulators in other international finance centres such as Jersey and Guernsey.<\/p>\n

\u2018For example, the Authority would have the ability to impose a civil penalty on an individual for a serious regulatory failing in circumstances where a prohibition or criminal prosecution is considered too severe.<\/p>\n

\u2018The Authority is not an enforcement-led regulator and the use of any of its powers is subject to a rigorous review process and rooted in a desire to be fair, consistent and pragmatic.\u2019<\/p>\n","protected":false},"excerpt":{"rendered":"Leading law firm Appleby has written to Ministers and other politicians to express its \u2018deep concern\u2019 over \u2018onerous\u2019…\n","protected":false},"author":2,"featured_media":141326,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-141325","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/141325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=141325"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/141325\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/141326"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=141325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=141325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=141325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}