Financial Supervisory Authority (FIN-FSA) is the institution that controls and supervises Finland's financial and insurance industries. The FSA audits institutions such as banks, insurance, and pension companies, Helsinki Stock Exchange. Most of the activities are covered by audited companies. The Bank of Finland covers the remaining 5% of the cost.
The Task of The Finnish Financial Supervisory Authority
Affiliated with the Bank of Finland, the FIN-FSA is free and independent in audit decisions. This institution has nearly 200 employees. The purpose of FIN-FSA is to stabilize credit institutions, insurance, and pension companies in the market. Another goal is for people to have confidence in market transactions. Specific laws sanction these duties.
The Parliamentary Supervisory Council controls the operations of the Financial Supervisory Authority. The Board of the Financial Supervisory Authority determines the supervisory authority's actions, determines the working principles, and provides guidance for this.
Mechanism of FIN-FSA
FIN-FSA operates within a defined mechanism that ensures compliance with the law and effective governance. The Board of FIN-FSA plays a central role in setting strategies, goals, and conducting audits to achieve these objectives.
The budgetary process is a crucial part of the mechanism. Once strategies and goals are established, the Board determines the budget, which is subsequently submitted to the Bank of Finland for approval. This ensures financial transparency and accountability in the operations of FIN-FSA.
Additionally, the Board engages in regular communication with the Parliamentary Supervisory Council, providing updates on operational targets. This interaction ensures oversight and accountability, promoting a cooperative approach between FIN-FSA and the council.
Consultations with specific market participants form an integral part of FIN-FSA's mechanism. These consultations are essential for the successful attainment of FIN-FSA's goals and objectives. Discussions encompass various aspects, including anticipated differences in audit processes and associated fees. By engaging with market participants, FIN-FSA gains valuable insights, fostering collaboration and a deeper understanding of the financial industry.
The Board of FIN-FSA typically comprises six members, complemented by three alternate members. These members serve three-year terms, ensuring continuity and expertise in decision-making processes.
Strategy of FIN-FSA
Mission: The primary mission of FIN-FSA is to promote financial stability and foster confidence in markets, while actively combatting money laundering and terrorist financing. It is imperative for investors to be protected and feel safe, and we are committed to ensuring the integrity of the financial system by preventing illicit activities.
Vision: The vision is to establish ourselves as global leaders in control and efficiency, setting the benchmark for excellence worldwide. We strive to be at the forefront of regulatory practices, including robust measures to detect, prevent, and deter money laundering and terrorist financing. By effectively addressing these threats, we contribute to the overall stability and security of the financial industry.
Regulation of FIN-FSA
FIN-FSA's role goes beyond conducting audits; it encompasses comprehensive regulatory activities. Transparency is a fundamental principle guiding these regulations, ensuring a fair and accountable financial sector.
Due diligence is a crucial aspect of FIN-FSA's regulatory framework. Companies operating in the financial sector are required to demonstrate preparedness for both normal market conditions and times of crisis. This readiness condition is enshrined in legislation to ensure the stability and resilience of the financial industry.
By conducting thorough due diligence, FIN-FSA aims to identify and mitigate potential risks, promote sound governance practices, and protect the interests of stakeholders. It involves assessing the financial health, risk management capabilities, compliance with regulatory requirements, and internal controls of financial entities. Additionally, due diligence enables FIN-FSA to evaluate the effectiveness of companies' contingency plans, ensuring they are adequately equipped to handle adverse situations.
Through robust regulation and supervision, FIN-FSA strives to foster a secure and stable financial environment that upholds the highest standards of integrity and safeguards the interests of investors and the broader economy.
FIN-FSA and FATF Standards for AML
The efforts of FIN-FSA are supported by Finance Finland, reinforcing their commitment to fighting money laundering. In the recent FATF report, Finland was recognized for its compliance with FATF regulations in addressing money laundering and achieving a commendable level in the fight against terrorist financing. However, there is room for improvement in terms of efficiency.
To enhance its capabilities, FIN-FSA is continuously developing and adopting a risk-based approach to combat money laundering and terrorist financing. This includes implementing innovative measures to stay ahead of evolving threats. In addition, FIN-FSA aims to expand its workforce within relevant units, ensuring sufficient resources for effective enforcement.
The banking sector also plays a crucial role in the fight against money laundering. Banks are actively working to create resources and implement measures to detect and prevent money laundering activities. However, it is important to address the challenge of low conviction rates. Last year, close to 10,000 cases of suspected money laundering were identified, but only 50 of them resulted in confiscation. This issue is not limited to Finland alone; it is a challenge faced across Europe.
Efforts are underway to address this issue collectively, with regulators, law enforcement agencies, and financial institutions working together to enhance the effectiveness of anti-money laundering measures. By strengthening collaboration, sharing information, and improving enforcement, there is a shared commitment to combat money laundering and ensure the integrity of the financial system in Europe and beyond.