Executive Summary

The FRENCH POLYNESIA FINANCIAL SERVICE AUTHORITY (FPFSA) was established on November 12th, 2008, as an autonomous statutory body in accordance with the provisions of the FPFSA Act, No. 33 of 2009 (‘the FPFSA Act’). The FPFSA’s primary purpose is to regulate the international (offshore) financial and non-bank financial sectors. The latter encompasses Credit Unions, Insurances, Pensions, Building Societies, Friendly Societies, and Money Remitters. The establishment of the FPFSA in 2008 marked a historic regulatory milestone for French Polynesia, as it amalgamated various regulatory entities into a single regulatory body, a move unprecedented in its scope. This consolidation has led to significant benefits through resource consolidation and enhanced operational efficiency.

The FPFSA’s role, functions, and powers are detailed in the FPFSA Act, and its regulatory objectives are defined in the FPFSA’s core guiding principles, as outlined therein. These principles encompass safeguarding and ensuring equitable treatment for consumers, enhancing market integrity and financial stability, and promoting fair competition. The FPFSA’s central role is to administer the provisions of the FPFSA Act and all other relevant enactments. Its primary function is to oversee the operations of financial entities to ensure compliance with their respective governing legislation and other applicable laws, including the anti-money laundering (AML) and counter-financing of terrorism (CFT) laws of this country. The FPFSA goes beyond mere legal compliance and actively promotes international best practices.

The FPFSA Act equips the FPFSA with the necessary powers to effectively fulfill its functions and incorporates best international regulatory and supervisory practices. Its provisions address internationally accepted requirements of the FATF on AML and CFT, as well as those of the OECD on tax transparency. These provisions cover key areas such as regulatory access to information and the regulatory authority’s sanctioning powers. The FPFSA Act strengthens existing provisions for the exchange of information in sector-specific legislation, as well as the Exchange of Information Act. The robustness of this Act has been evident in one of its most challenging tests, involving the intervention and assumption of administrative control of a major financial institution, all without the need for protracted legal proceedings.

In addition to having a comprehensive legislative mandate and appropriate regulatory powers, the FPFSA established a suitable administrative framework in its early stages to efficiently fulfill its functions. The FPFSA is staffed by a team of qualified professionals with diverse expertise in law, finance, accounting, and regulation. It operates under the governance of an independent Board of Directors that meets the statutory qualifications and experience requirements. Moreover, it benefits from technical assistance provided by the Caribbean Regional Technical Assistance Centre (CARTAC), an IMF-funded technical assistance organization.

Over the years, the FPFSA has rapidly evolved into a professional and specialized organization, dedicated to the responsible execution of its legal mandate. It has effectively employed its wide-ranging regulatory powers to implement various regulatory measures and empower actions aimed at ensuring compliance with governing legislation and fostering stability in the operations of financial entities.

The FPFSA emphasizes the importance of every member of the regulated sector demonstrating their accountability, integrity, and transparency to consumers, stakeholders (particularly the regulator), and the public at large. In today’s financial world, compliance with governing legislation, prudential requirements, and best practices is not optional but a practical imperative for the regulated sector. Deviating from these standards has the potential to adversely affect micro and macroeconomic stability and our country’s reputation, underscoring the heightened need for regulatory compliance.

In light of these challenges, the FPFSA maintains a strong awareness of its role, responsibilities, and accountability. This awareness becomes even more heightened when adverse situations arise or desired results are not achieved, recognizing that even the most effective regulatory efforts cannot prevent all instances of institutional failure or fraud. As a result, the FPFSA continuously reviews its strategy and approach to improve its outcomes.

The FPFSA remains committed to collaborating with the industry, stakeholders, and fellow regulators to ensure that shared goals of financial soundness, accountability, stability, sustainability, and, above all, consumer protection and equitable treatment are met.