Regulated Sector Employees

When engaging and dealing with employees in the regulated sector, there are a number of extra considerations and points to think about which overlay the general employment context. Cains’ employment and regulatory specialists contributed an article to International Employment Lawyer which covers this area in some detail: please see link [here[1]].

By way of summary and so you can take a deeper dive if you need to, the following are indicated as a very high level list of checkpoints and issues that may arise during the employment lifecycle. This note primarily covers financial services, for which the Isle of Man Financial Services Authority (FSA) is the regulator in the Island. However, other sectors (gaming and communications, for example) apply similar principles and/or set comparable expectations for key personnel within licence holders:

• pre-employment vetting & checks – some roles may require regulator approval and/or notification in addition to general employment due diligence including taking up references
• offer letter and contract – these should refer to regulatory requirements and maintaining “fit and proper” status, the description of duties should emphasise compliance with regulatory functions for which the individual will be responsible
• training and CPD are likely to be important aspects of compliance which will require communicating to the employee and appropriate records being kept
• disciplinary matters may engage regulatory requirements to notify the FSA/relevant authority depending on the level of the concern and position the employee holds
• departures of certain key role holders may require notification to the relevant regulator
• a whistleblowing policy is required for financial institutions since January 2017 and advisable otherwise including, in particular, within other regulated businesses
• if a licence holder enters into a settlement (or “compromise”) agreement with a departing employee this may be something which has to be disclosed to the regulator as well as the circumstances giving rise to the settlement
• bearing in mind the emphasis on ensuring reliability/fit and proper status of employees in the regulated sector, care and accuracy should be paramount in preparing references plus they should be “complete” in terms of not withholding any relevant information.

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Reference:-

[[1] IEL submission saved as pdf – in Hub General Pages. Delete this comment once linked.]

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Useful Resources:-

See our article on criminal records checks.

https://www.iomfsa.im/media/1521/tandc0406.pdf

https://www.iomfsa.im/media/3289/regulatoryguidancefitnessandpropriety.pdf