Shortcomings found in the special audit carried out last year were identified among creditors or credit intermediaries, payment institutions, banks, insurers, management companies and investment firms, the FSA said, according to BNS.

Siim Tammer, member of the FSA management board, said that the watchdog checks the suitability of about 300 persons to managerial positions per year.

"During our eligibility checks, we have identified approximately one in ten individuals as being unfit for the financial sector," Tammer said.

"This shows that, within companies, too, the procedure for selecting managers should be more thought through. It is important to understand that managers play a significant role in the activities of the institutions under financial supervision and that the institution, in turn, is responsible for the suitability of the manager," Tammer added.

The purpose of the inspection carried out last year was to determine across the financial sector whether companies have adequate internal procedures for assessing the compliance of managers with the requirements of the law. The FSA also monitored the practices of companies under its supervision in applying such arrangements.

The watchdog also notified the companies in question of the shortcomings and issued them with a reasonable deadline for bringing their activities into line with the law.

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