There is one consolidated financial market regulator in Iceland, the Financial Supervisory Authority (FME). The FME is a state authority with its own board of directors. Its role is to ensure that the activities of parties subject to supervision are in accordance with laws and regulations and that they are in every respect consistent with sound and proper business practices.
Parties subject to supervision are:
- Commercial, Savings and Investment Banks
- Deposit departments of co-operative societies
- Securities companies and securities brokerages
- Pension Funds and Management companies of UCITS
- Stock exchanges and central securities depositories
- Insurance companies and insurance brokers (licensed to operate in Iceland).
Several other financial institutions, which operate in accordance with special legislation, are also subject to supervision by the FME, most notably the Housing Financing Fund.
Structural and legislative reforms, along with the massive expansion in financial services and activity that they have engendered, have made Iceland’s financial system more international in character and broadly on a par with European norms.
Under its obligation to transpose into national law all existing and future EU legislation in the field of financial services, Iceland has implemented all the EC directives on banking, insurance and securities trading whose general objective is to accomplish an integrated European market for financial services, in particular with respect to the right of establishment, provision of services, prudential rules and capital movements.
Icelandic authorities, in close cooperation with market participants, have been implementing policy objectives and specific measures on the basis of the EU’s Financial Services Action Plan aimed at enhancing harmonisation, competition and effectiveness of financial services, payment systems and electronic commerce throughout Europe.
Source: Financial Supervisory Authority and Central Bank of Iceland