Guernsey's much discussed Code of Corporate Governance came into effect on 1 January 2012.

In addition to applying to all companies licensed by the Guernsey Financial Services Commission (including Guernsey investment managers, administrators and custodians), the Code will apply to Guernsey authorized and registered collective investment schemes.

The GFSC have repeatedly acknowledge that the Code is not intended to be prescriptive that the Code's application to a business will depend on the nature, scale and complexity of that business.

To that end, for those concerned with the corporate governance of funds themselves and related entities, appendix 1 of the Code provides additional more specific guidance.

Non-compliance with the Code does not result in an automatic sanction. However, non-compliance can be taken into account in regulatory action and in civil proceedings may be used as evidence of breach of fiduciary duty.

In addition the Code does require annual completion of an assurance statement confirming that the directors have considered the effectiveness of their corporate governance practices and are satisfied with their degree of compliance with the principles set out in the Code.

Further detail of the form of that assurance statement is expected shortly.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.