Dominic Wheatley, Chief Executive of Guernsey Finance, on how Guernsey's financial services industry is in a good place to grow and evolve.
The opening of a Guernsey representative office in Hong Kong during the first quarter of 2016 followed a particularly active 2015 for Guernsey's financial services sector. The office, located at Three Pacific Place in Admiralty, is Guernsey Finance's second overseas outpost in addition to an office in Shanghai which opened in 2007. It is ideally situated at the heart of Hong Kong's financial district and will strengthen our developing relationship with Hong Kong and its business community.
Our representative in China, Wendy Weng, who is based in Shanghai, will use the office as a base from which to carry out further promotional activities throughout the wider South East Asia market. The Guernsey Financial Services Commission (GFSC) is also using it to provide regulatory advice to anyone in the region who might be considering Guernsey-specific ventures. The Hong Kong initiative follows the appointment in the autumn of Zoë Cousens as our first Middle East representative. Zoë, who is based in Dubai, is now helping to promote Guernsey's financial services industry in the Middle East as a contact 'on the ground' for Guernsey. She is now a vital conduit for Middle Eastern firms and clients interested in Guernsey and will help to host and arrange meetings, seminars or events for Guernsey businesses that visit the region. There are positive stories to tell about 2015 that involve all parts of our financial services industry.
One of the best pieces of news came in July when the European Securities and Markets Authority (ESMA) announced that it wanted the European Union to grant Guernsey a 'third country' passport under the Alternative Investment Fund Managers Directive (AIFMD). Guernsey is one of only three jurisdictions to receive such recommendation, which, if approved by the European Commission in 2016, will reinforce Guernsey's position as a distributor of funds into Europe. Guernsey has had its own opt-in equivalent AIFMD regime fully operational since 1 January 2014 but if the various organs of the EU take up ESMA's recommendation, they will allow Guernsey to operate on a level playing field with its European counterparts.
More positive news for the funds sector came in the last quarter of 2015 with confirmation that two funds were re-locating to Guernsey. VinaCapital Vietnam Opportunity Fund moved its domicile to Guernsey from the Cayman Islands, while SafeCharge International Group Limited relocated its fund domicile to Guernsey from the British Virgin Islands. Both funds explained their decisions by saying that Guernsey's well-established infrastructure for the administration of funds listed on the London Stock Exchange was a key factor, as was the fact that the companies could enjoy freer access to potential investors by being domiciled in Guernsey.
Guernsey's banking sector also welcomed a new arrival. FNB Channel Islands (FNBCI) officially opened for business in July and is the Guernsey ranch of FirstRand Bank Limited – South Africa's largest bank by market capitalisation.
This was then followed by ABN AMRO's announcement at the end of September that it was to move its offshore private banking business into its Guernsey operation.
A FIT FOR FINTECH
Guernsey is also jockeying for position to take advantage of digital opportunities. In July PwC and Guernsey's Commerce and Employment Department published a 'strategy document' which, they hoped, would help to shape the future of Guernsey's fintech sector. The paper analysed the fintech sector both on the island and abroad, identifying the main attributes and future direction of the market. Guernsey is so well-connected with the rest of the world, sitting at the centre of a hub of subsea fibre cables linking the UK with the Americas, Europe, the Middle East and Africa, that it is bound to benefit further from the digital age. Guernsey already possesses the highly secure data connectivity, resilience and cyber-security that the global finance sector and e-gaming industries require.
During the year 2015 the island's insurance-linked securities business continued to grow. It attracted new reinsurance capital, once again demonstrating the twin strengths of its financial security as an economy and its robust and effective regulation.
OUR CONTINUING SUCCESS
What is clear from this small snapshot of news from the recent past is that Guernsey's finance industry continues to thrive and develop. This is most definitely an exciting and challenging time. Modern finance requires a combination of effective regulation, a robust anti-money-laundering regime, global standards of transparency, and an industry that provides customers with excellent advice and performs services of high quality, within a stable political, financial and legal environment. Our continuing success is testimony to our ability to deliver consistently on all of these.
An original version of this article was published in the WealthBriefing's IFC World 2016 Guide, April 2016.
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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