Regulatory Alerts2017-04-25
Isle of Man FSA Guidance Note on OTC Derivatives and Structured Deposits
The Isle of Man Financial Services Authority issues guidance for Class 1(1) and Class 1(2) deposit takers to ensure proper management of risks associated with over-the-counter derivatives and structured deposits. The document mandates that banks notify the Authority at least 20 business days prior to launching new structured products and requires accurate reporting of all OTC derivatives using form SR-1B. Additionally, it establishes strict standards for customer suitability, advertising transparency, and quantitative capital adequacy calculations for embedded derivative risks.
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