FINANSTILSYNET (The Financial Supervisory Authority of Norway) Regulatory Entity is an independent government agency responsible for overseeing Norway’s financial sector. It is also in charge of different financial and banking organisations to develop a powerful financial system.
The FINANSTILSYNET Regulatory Entity is primarily responsible for licensing and monitoring financial activity in Norway. Moreover, they ensure that the company follows Norwegian government legislation, such as anti-money laundering or counter-terrorist financing legislation.
Leading roles and responsibilities of FINANSTILSYNET
The primary objective of the FINANSTILSYNET Regulatory Entity is to promote financial stability and enable the markets to operate efficiently. Through regular supervision of markets and enterprises, FINANSTILSYNET can determine whether the markets are functioning perfectly or not.
By the term financial stability, we generally mean that the system can handle unexpected and disruptive situations at any point. Having financial stability allows consumers to identify any negative consequences that are about to occur in the economy.
A well-functioning market also contributes to effective distribution and comes up with the pricing of capital and the risk. Thus, financial stability, as well as well-functioning markets, is closely linked with one another. Without financial stability, it is impossible to allocate capital and manage risk effectively.
If the distribution is not functioning properly and the risk still arises, the result will be financial instability.
Financial stability and a well-functioning market play a vital role in building confidence in the financial system and growing a stable economy.
How does FINANSTILSYNET supervise the financial sector?
Finanstilsynet is actually supervising how different institutions are operating within financial markets. They investigate whether the institution is financially stable and is capable enough to cope with certain economic conditions.
In addition, Finastilsynet assesses the capability of the executive management and the Board of Directors to fulfil their roles and responsibilities. Both the board and the management are responsible for dealing with business operations.
The FINANSTILSYNET Regulatory Entity also ensures that risk and capital are distributed evenly. Additionally, they provide settlement and payment services. A well-functioning securities market and a stable financial institution are necessary for the proper execution of services.
With supervision and regulation, users are given accurate and comprehensive information to make informed choices. This includes some issuers, policyholders, depositors, borrowers, and investors.
Areas of supervision in FINANSTILSYNET
Finanstilsynet conducts the supervisory responsibilities, which cover different areas of the financial sector. This includes banking, securities operations, and insurance. In addition, they also perform a supervisory responsibility for the debt collectors, real estate broking, and a few external accounting firms.
Supervision and monitoring by FINANSTILSYNET regulatory entity
- Finanstilsynet performs the duty of monitoring and supervision in which it ensures that all institutions are complying with guidelines and regulations.
- Supervision is conducted through the reporting and the analysis of data. At certain conditions, on-site inspections or thematic inspections are also conducted.
- Finanstilsynet is also responsible for assessing the macroeconomic aspects and a few other trends associated with the financial stability of Norway markets.
- The regular analysis is also performed to determine the risks that most of the banks are currently facing.
- Possible solutions are suggested to bring stability to Norway’s financial markets and economy.
Licensing
Finanstilsynet also administers the rules for fulfilling the basic licensing requirements for the institution’s part of the financial sector. Therefore, any institution wishing to do business in Norway within Finanstilsynet’s remit should apply for a license right now.
Finanstilsynet can cancel any license if the institution or individual refuses to comply with licensing requirements. In addition, this body even ensures that the company follows Norwegian government legislation, such as anti-money laundering or counter-terrorist financing legislation.
In the case of severe irregularities, Finanstilsynet has the right to revoke its license.
Which institutions should get a license from Finanstilsynet?
Few institutions and organisations who should acquire a license from Finanstilsynet are:
1. Auditors
All the audit firms and auditors should acquire a license from Finanstilsynet. Finanstilsynet Keeps a closer check on how the auditors are maintaining their performance within financial markets.
Finanstilsynet verifies that auditing firms are working in compliance with the regulations and following some good audit practices. Several small audit firms, as well as large international firms, make up the audit industry. Therefore, they need to abide by the regulations for acquiring the license certification.
2. External accountants
Accounting firms or external accountants should also acquire a license from Finanstilsynet. During inspections, they make sure the accounting firms are obeying the regulations and following basic accounting practices.
3. Real estate broking
Third, we have real estate agencies or agents who should acquire a license from Finanstilsynet to function in financial markets. Finanstilsynet keeps a closer check on brokerage activities and ensures that they operate in compliance with regulations.
Supervision of a real estate agency encompasses certain cooperative housing associations’ entities to hold an estate agency license. Consequently, the supervision is entirely focused on entities that offer certain real estate broking services to consumers.
Measures of Finanstilsynet against anti-money-laundering
Finanstilsynetis also guides the supervised institutions over specific anti-money laundering legislation. This legislation is completely harmonised with the EU requirements and the international standards.
In addition, it includes some measures that are needed to be taken against terrorist financing.
Finanstilsynet often supervises the financial institutions through the system of ICT and payment services. They even ensure that the enterprise follows the Norwegian government legislation, including anti-money laundering or counter-terrorist financing legislation.
This supervision makes it more accessible for the regulatory body to ensure which institutions meet the basic security requirements.
Furthermore, it assures whether their ICT operations are in compliance with the regulations or not. Finanstilsynetalso monitors payment services to ensure that the payment terminals and online banks are stable and secure.
Bottom line
Hence, Finanstilsynet makes sure that all their supervisory activities are predictable, and they communicate the information related to external parameters and the regulations.
As part of well-functioning supervision, Finanstilsynet communicates and informs investors about regulatory changes, their decisions, or other resolutions made by the regulatory body.
Finanstilsynet is cooperating with numerous organisations and authorities in Norway and on an international level.