CBCS HAS MORE THAN 400 INSTITUTIONS UNDER SUPERVISION
By: JJosephaNews
Reading Time: 3:30 mins.
Twitter: @JJosephaNews
Willemstad, Curacao. According to Centrale Bank van Curacao en Sint Maarten (CBCS), there is a new style of supervision that they will implement. The CBCS Deputy Director Supervision: Mr. Arnoud Vossen stated; “In our New Style of Supervision, we are on the road to fully implementing risk-based supervision across the financial sector, in line with international supervisory standards. In this first copy, you can read about several projects that will take us further down this road, like our recent assessments on liquidity risk management at credit institutions and the extra attention for compliance with the recent international sanctions on Russia. We hope this newsletter will establish an extra communication channel with you as industry.”
FOCUSED & INTRUSIVE SUPERVISION: ENFORCEMENT INSTRUMENTS
The CBCS has a mix of enforcement instruments at its disposal that can be used to achieve compliance with the standards laid down in the supervisory legislation and the regulations based on it. Within these instruments, informal and formal measures are distinguished, which can be used against offenders. Formal instruments have a legal basis and are specifically mentioned in the different supervisory legislations. Enforcement measures may be addressed to both legal and natural persons.
The CBCS recently drafted a manual containing a compilation of all the enforcement instruments at its disposal. The manual was presented to the supervision staff, highlighting each enforcement instrument. Examples of enforcement instruments are written warnings, instructions, orders subject to penalty payment, administrative fines, appointment of a silent trustee, revocation of a license, and the emergency measure.
Focused and intrusive supervision entails that the CBCS will be making more use of these instruments to ensure that supervised institutions take actions to correct shortcomings identified.
The manual will be presented to the supervised institutions, after which it will be made available to the public on the CBCS-website.
INNOVATION & FINTECH
In September 2018, the CBCS launched its Innovation Platform (IP). The IP functions as an Innovation Hub and is the advisory body to the Executive Board for all innovation matters. The aim of the IP is to develop policies that support advancement and innovation while ensuring compliance with international standards, rules, regulations, and legislation.
As part of its innovation journey, the CBCS, led by its IP, assesses new technologies and Supervisory Technology (SupTech) capabilities, with the support of the Financial Network Analytics Ltd (FNA). FNA is a deep technology company specialized in advanced data analytics and network simulations, and a leader in SupTech and Regulatory Technology (RegTech). The FNA has produced a series of courses and provided the CBCS’ specialists with access to its software and analytics platform.
With its Global Financial Innovation Network (GFiN) membership, CBCS also participates in a framework for cooperation between financial services regulators on innovation related topics. CBCS is the first GFIN member of the LAC Region.
Due to digital banking’s potential benefits in terms of inclusion and competition, the CBCS has intensified its assessment of the regulatory framework and processes for digital banks (the design phase for digital banks).
To adhere to international standards and principles and foster a fertile environment for innovators, the CBCS has also drafted four different legislations governing payment systems. These legislations are currently being assessed by the government for approval and implementation.
CBCS is committed to keeping up with innovation developments and adapting to the environment of the digital age.
RUSSIAN FEDERATION FINANCIAL SANCTIONS: IMPLICATIONS FOR YOUR INSTITUTION
Curaçao and Sint Maarten are legally required to implement provisions of the European Union’s binding legal acts issued on the basis of Article 215, first and second paragraph, of the Treaty on the Functioning of the European Union adopted under the Common Foreign and Security Policy of the European Union.
Consequently, all institutions supervised by the CBCS must observe the prescribed procedure in connection therewith. Said procedure includes the immediate notification of the CBCS. The CBCS also draws your attention to the specific sanctions imposed by the United States (OFAC) and other jurisdictions due to the current situation in Ukraine. Institutions under the supervision of the CBCS must be aware that transactions or legal actions falling under the scope of the foreign sanctions have consequences for their (international) operations. Furthermore, the CBCS refers you to a more extensive letter it has sent to all supervised institutions in relation to the above.
ACTIVE PARTICIPATION OF SINT MAARTEN BANKS IN INSTANT PAYMENTS SYSTEM
With the introduction of the Instant Payments Clearing and Settlement Mechanism, the CBCS is one of the first financial institutions to make use of a dual currency system for Instant Payments. This means that interbank transactions can now be processed within just a few seconds, 24 hours a day, 365 days a year. The participating banks active in specifically Sint Maarten are Orco Bank NV, Windward Island Bank NV, Banco di Caribe N.V., RBC Royal Bank N.V., and CIBC FirstCaribbean.
ENHANCED SUPERVISION ON CREDIT INSTITUTIONS
Given the adverse impact of the COVID-19 pandemic on our financial sector and our economy, CBCS enhanced its supervision on the liquidity position and liquidity risk management of supervised institutions, mainly credit institutions. To increase the quality and frequency of liquidity monitoring, CBCS started in 2021 with requesting weekly cash flow reports from local more significant credit institutions. As part of its liquidity risk management program, CBCS developed the Liquidity risk management self-assessment Survey (see also the article below). Furthermore, CBCS performed several Asset Quality Reviews -on loan portfolio’s- of the more significant banks during 2021.
We will continue to focus on the aforementioned themes at the remaining credit institutions in 2022.
SELF-ASSESSMENT CREDIT INSTITUTIONS ON LIQUIDITY RISK MANAGEMENT
Recently, 14 credit institutions performed a self-assessment on Liquidity Risk Management at the request of CBCS. With such self-assessment, an organization encourages selfverification and self-enhancement and identifies weak and strong points within. The 31- question self-assessment survey covered themes as Management, Supervision, Governance and Measurement of liquidity risk.
The results show that 11 of the 14 entities assessed themselves as partially compliant as to Liquidity Risk Management, while 3 entities scored below average. CBCS will further evaluate and act on the results soonest.
SUPERVISION ON COUPON CREDIT COMPANIES
The CBCS has seven coupon credit companies (‘bon-kredietverstrekkers’) under its supervision. Coupon credit companies grant credits to consumers through coupons worth a certain amount of money, that should be paid back in installments. Consumers can use these coupons to purchase products from affiliated stores. During 2021, CBCS has started examinations with these companies to get a better insight into their business model and to verify their compliance with the APR and POC Provisions.
To get a better understanding of the extension of coupon credits we encourage you to keep an eye on our website for a blog regarding this subject.
MORE THAN 400 INSTITUTIONS UNDER SUPERVISION
CBCS supervises all financial institutions that are active in the financial sector in Curaçao and Sint Maarten. This not only includes credit institutions, insurance companies and pension funds, but also -among others- money transfer companies, trust service providers, asset managers, Investment funds and the securities exchange.
Fact Check:
We strive for accuracy and fairness. If you should read or see something that doesn't look right, Contact Us!
To read more from JJosephaNews:
Subscribe to Our YouTube Channel
Follow us on Twitter
Like us on Facebook
Stay tuned for more news @JJosephaNews!
#sintmaarten #curacao #centralebankvancuracaoensintmaarten #cbcs #eputydirectorsupervision #arnoudvossen #supervisorytechnology #suptech #regulatorytechnology #regtech #financialnetworkanalyticsltd #fna #globalfinancialinnovationnetwork #gfin #latinamerica #caribbean #lacregion #europeanunion #unitedstates #ofac #orcobanknv #windwardislandbanknv #bancodicaribenv #rbc #royalbanknv #cibc #firstcaribbeanbank #money
©2022 JJosephaNews. All rights reserved.
No comments:
Post a Comment