Inspections and Examinations are important instruments in the ISA's supervisory toolbox. They allow the ISA to conduct thorough examinations of supervised entities' compliance with the law and the applicable regulations, and thereby they increase deterrence and compliance. They also allow the ISA to gain an in-depth look at the supervised entities' conduct in a specific area or topic, and issue position papers that guide the market toward the desired course of action, in line with ISA policy.
The Inspections and Examinations Department was established in late 2019 following a strategic decision to consolidate the ISA's departmental inspection units into a single, independent department with a holistic perspective on the ISA's organizational needs.
The decision reflects the recognition that an organization-wide inspection function will make optimal use of the ISA's supervisory tools in line with ISA priorities, based on the risk level of each area of ISA activity, and will offer greater flexibility in planning and performing risk-based inspections.
The Department conducts inspections focusing on supervised entities' compliance with the law (corporate governance, various aspects of IT operations, and implementation of AML/CTF directives, where relevant) in the majority of the areas supervised by the ISA, including mutual fund managers and trustees, trading platforms, investment portfolio managers, advisory functions in banks, and reporting corporations. Inspections of reporting corporations cover legal and accounting issues and valuations. The Department also handles cross-departmental issues related to reviews of unsupervised entities (business ventures) and opinions on their compliance with the applicable requirements of the laws under the ISA's supervision.
The Department operates under the Director General of the ISA.