IFOMA has direct supervisory competencies in two areas: credit rating agencies and transaction registers.
IFOMA has direct supervisory competencies in two areas: credit rating agencies and transaction registers.
IFOMA has adopted a risk-based supervisory approach. Risk-based supervision refers to:
- the use of a structured approach to identify the most significant risks at the level of the supervised entity or the sector;
- a specific examination by supervisors to assess how supervised entities are managing the identified risks; and
- the use of available and proportionate measures to reduce and manage these risks.
Identifying risks and trends requires continuous monitoring of information and periodic data provided by CRAs and through TRs, as well as monitoring the overall market dynamics. Additionally, IFOMA tracks the sector’s evolution through engagement with supervised entities and other external stakeholders.
The risk-based approach enables IFOMA to allocate its supervisory resources to areas where the highest risks have been identified, evaluating the impact and effectiveness of its supervisory strategy. This allows IFOMA to adapt its supervisory approach to the evolving nature of the sector, enabling it to initiate new investigations or market studies and implement ad hoc supervisory measures when necessary to reflect changes in market dynamics and innovations, such as new entities, products, services, delivery channels, or methodologies.
In the coming years, IFOMA aims to enhance the effectiveness and lasting impact of its supervisory activities on individual entities, intensify its risk-based supervisory approach, shift from a compliance-based functional approach to a business-based approach, and strengthen its reputation through world-leading expertise.