Basic Search  |  Summaries  |  Advanced SearchPenalty: £7,944
Year: 2022
Date: 5 August, 2022
Offence Group: financial offences
Offence Type: anti-money-laundering deficiencies
Violation Description: The Authority conducted the Investigation and was, at all times, mindful of the higher risk profile of the R&M customer base. Licenceholders with such a profile and a higher risk appetite are naturally required to be able to demonstrate the highest standards of governance, risk and compliance frameworks and a culture that pervades high ethical and moral standards to the conduct of business and compliance with the regulatory framework. Similarly to the work of the Consultants and the work of the professional appointee under sections 14 and 23 of the Act, the Investigation identified a range of material weaknesses at all levels of R&M's control and governance structure during the material times that, on reasonable grounds, brought into question R&M's fitness and propriety. This included failures by R&M to organise and control its affairs in a responsible manner; deficient systemic AML/CFT policies and procedures; and conduct of business failings in respect of entities administered by R&M. Amongst the matters confirmed were that R&M:- had not been fully meeting a number of Code Requirements - R&M was contravening certain aspects of paragraph 4, 5, 6, 8, 12, 13, 14, 15 and 30 of the Code; had not been fully meeting Rule Book requirements in relation to maintaining appropriate internal and operational controls, systems, policies and procedures - R&M was breaching certain aspects of rules 8.2, 8.3, 8.9, 8.10 and 8.62 of the Rule Book; and had not been fully meeting rules relating to the conduct of business under the Rule Book - R&M was breaching certain aspects of rules 6.1, 6.2 and 6.11 of the Rule Book. The matters detailed are serious and if not adequately addressed, particularly in terms of the preventative measures set out in the Code, significantly increase the risk that R&M's services could have been exploited by persons who may wish to launder money or finance terrorism and therefore, by association, may have negatively impacted upon the Authority's regulatory objectives and the reputation of the Isle of Man as a responsible and well regulated International Financial Centre. Notwithstanding these findings and conclusions, R&M today is effectively governed by new directors and its controlled function role holders (including its Managing Director, Head of Compliance and MLRO) are new appointees. R&M has also, as a result of the issues identified, implemented a far more robust and professional anti financial crime framework and has downgraded its risk appetite. The Authority has determined that, at this time, R&M remains permitted and licensed to carry on undertaking regulated activity. Notwithstanding the foregoing, the Authority understands that R&M will be surrendering its licence to undertake Class 4 and Class 5 regulated activities in due course.
Agency: Isle of Man Financial Services Authority
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