This paper reviews financial sector regulation and supervision in the Cook Islands (CI). The CI has taken a number of measures to strengthen its financial sector regulation. New legislation was passed for the regulation of banking activity, and a Financial Supervisory Commission (FSC) was established. A suite of antimoney laundering legislation was enacted in May 2003 with work ongoing in respect of legislation for combating the financing of terrorism. The new Banking Act and FSC Act provide a good basis for sound financial sector regulation.
This paper focuses on key findings of the detailed assessment of observance of standards and codes in the financial sector of the Cook Islands (CI). The new legal framework in CI represents an important first step in correcting deficiencies, as they are all addressed in the new set of laws. The framework empowers the Financial Services Commission to license, supervise, and regulate the financial sector. It also provides it with enforcement authority in the event of noncompliance with the law, and to cooperate with foreign supervisors where necessary for implementation of comprehensive supervision on a consolidated basis.