Guernsey: The Value Of Outsourcing Regulatory Reporting

Last Updated: 23 October 2017
Article by Andrew Niles

The ever-adaptable Channel Islands are beginning to bring their financial services expertise to bear on one of the industry's real growth areas: regulatory and compliance services. Andrew Niles of Intertrust takes a look at a regulation-led business environment and explains how the islands are looking to capitalise on the opportunity presented by a more transparent financial ecosystem.

Over the past 10 years the role of compliance officer has changed significantly within organisations worldwide. Once seen as enforcers responsible for ensuring that processes, pieces of work and systems adhered to national standards and internal rules; the compliance officer acted as the gatekeeper who controlled what went out of the door.

The compliance officer in 2017 is more of a caretaker; they protect the business from bad practice and ensure that it's populated with proactive, responsible practitioners so that their organisation is not subject to heavy sanctions and potentially fatal reputational damage.

This role change has been precipitated by a huge global increase in reporting and the automatic exchange of information; it's never been more important to be compliant. The EU's General Data Protection Regulations ("GDPR") is just the latest example of a multi-national set of standards and its scope is such that any business that has interaction with the EU will be covered by the regulation.

GDPR is certainly the hot topic at the moment, but the first wave of international regulations – know your customer (KYC) and anti-money laundering (AML) procedures most notably – still need to be adhered to. These sit alongside the more high-profile information exchange agreements, the Foreign Account Tax Compliance Act (FATCA) and the OECD's Common Reporting Standard (CRS).

So the landscape is a complex one that places a burden upon organisations, albeit a burden that is ultimately necessary and beneficial.

The reasons for complying with international regulations are obvious – compliance indicates willingness to adhere to established rules, demonstrates legitimacy and social responsibility. For Channel Island businesses, it debunks misconceptions about the legality of offshore structures.

The islands were early adopters of FATCA, CRS and GDPR and they are therefore the perfect jurisdictions to host outsourced regulatory reporting services, which is an increasingly viable option in the face of global regulatory demands. 

Why outsource regulatory reporting?

The most obvious reason to outsource compliance led tasks or processes is the same reason that a business would outsource any function – efficiency. The demands on compliance have accelerated at such a rate over the past few years that it has been difficult for small and mid-size firms to keep up.

The options for addressing the greater compliance needs for firms of this size are fairly limited – they can expand their internal compliance team, which is often not an option for simple budgetary reasons, or they can employ external help to spread the workload. This latter option is proving increasingly popular as the regulatory burden grows greater.

Outsourcing not only has the advantage of reducing the workload on a business's own staff, it also means that firms are able to benefit from external professional expertise. Large teams of experts are employed to perform the compliance function and companies offering outsourced regulatory compliance services will also be fully accredited for each individual piece of regulation.

For example, we work globally with more than 50,000 individuals and entities on regulatory matters – including FATCA, CRS and GDPR. We also carry out anti-money laundering checks on functions such as client on-boarding, due diligence on investors and remediating books of business to ensure compliance with current standards.

Our offering encompasses regulatory compliance services which are scalable and applied to funds, corporate services and complex private wealth structures. Scalability is important as many of our clients are exactly the kind of firms noted above - mid-tier firms for whom developing an in-house team would be inefficient. The reality for these firms is that they simply need a provider who can perform global, scaled compliance functions for them.

The global nature of regulation necessitates an international perspective and work ethic. We work with clients from around the world to meet their compliance needs and the global footprint of our client base is a further endorsement for the Channel Islands as a jurisdiction; we work out of the islands for clients from the Far East, the US and Europe on their fund-based businesses.

The Channel Islands at the heart of compliance

The Channel Islands are the home of our regulatory compliance services; as a company that reports in up to 28 jurisdictions around the world we have seen the need to streamline and bring efficiencies to compliance services; workflows and processes that have been developed right here in the islands.

Many of our clients are comfortable with outsourcing the administrative processes within their compliance work to us because they know that we operate from robust jurisdictions that represent the gold standard in global reporting.

Our streamlined services have been rolled out to Intertrust's hubs around the world to ensure consistency and quality; international businesses demand the highest accreditations and we have those, hence our desire to share that expertise and knowledge and offer a global solution to what is often a global requirement.

The islands' reputations for robust regulation, combined with a broader 'open-for-business' attitude, a convenient geographical location and time zone and a mature financial services sector, makes them strong jurisdictions in which to do business.

Easing the burden through technology

The financial services world is an increasingly modernised one and digital technologies have played a part in facilitating reporting and complying with regulation; making life easier for the client and for the service provider.

We have two systems, developed in-house, that we and clients can use to expedite the reporting process. The first is a secure, cloud-based client on-boarding system which is easy to use and is used here in the Channel Islands and in Intertrust's offices around the world, as well as by select clients.

The second system is an app called CDDQuick which enables us to perform due diligence on a client more quickly and easily than ever before. Both the Guernsey and Jersey Financial Services Commissions now allow the provision of electronic data and we wanted to take advantage of this and pass the convenience factor onto our clients, so we developed our very own app.

CDDQuick is installed on a portable device and simply scans documents such as passports, utility bills and driving licences and then interacts automatically with our systems to provide that information immediately. This saves time for us, the client and the regulator and is the kind of system that we see playing a big part in the future of compliance.

Compliance in the global business landscape

Compliance is more important now than ever and its reach extends to touch upon many of the trends that characterise the global business landscape.  The sector has embraced its increased significance and devised new innovations to ease the regulatory burden; cybersecurity is an ongoing concern that has shaped regulation and the ways we report. The whole industry requires consistency and integrity to demonstrate legitimacy and adherence to international standards.

All of this can be a burden on organisations but outsourcing is a viable option and the Channel Islands are the perfect place to find regulatory caretakers who are trained, accredited and experienced.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.