Guernsey: Providing Stability, Security And Substance

Last Updated: 14 August 2018
Article by Paul Smith

Most Read Contributor in Guernsey, November 2018

Guernsey's core funds messages have been given a global boost with the publication of a new report on Guernsey Fund Services, produced with Global Fund Media. The report identifies Guernsey as a leading jurisdiction for both start-up managers and established funds. Here, Paul Smith of the Guernsey Investment Fund Association discusses the advantages of Guernsey as an international financial centre.

In an era when uncertainty and the unexpected can be relied upon to spoil the best-laid plans, Guernsey is one jurisdiction able to provide a stable, secure base from which to operate, and has the infrastructure and resources to ensure the highest levels of service quality while also being able to provide businesses with true substance.

With 50 years' experience behind us, Guernsey is still a popular destination for investment managers seeking a jurisdiction in which they can establish an office, and which is able to offer them the luxury of a dual regulatory regime, whereby they can launch funds under AIFMD-compliant regulations or Guernsey's own regulations. We have nearly 1,000 funds under management or administration and increasing numbers of fund managers are establishing a physical presence in Guernsey.

As a Crown Dependency, Guernsey operates under a constitutional arrangement with the UK, and this relationship provides Guernsey with the authority and autonomy to create and enforce its own laws and regulations through its own government, the States of Guernsey. Guernsey is therefore able to provide a level of political and fiscal stability that is the envy of many other jurisdictions around the world.

Guernsey is not a member of the European Union and has effectively carried on its business with the EU as a third country ever since the EU came into being. It is well placed to assist the UK with its experience and knowledge of how this could work for the UK post-Brexit and there have been numerous meetings between industry bodies, government officials and government ministers of Guernsey and the UK since the referendum in June 2016. These meetings are ongoing and will continue throughout the negotiation and withdrawal process.

A key concern for everyone these days is security, and that encompasses both physical security and cyber security. Guernsey is fortunate as an island in that physical security is a natural by-product of island life. Guernsey is a lovely, safe place to bring up children and to enjoy an environment in which crime levels are very low.

The digital economy and cyber security are also high on Guernsey's agenda and the island is uniquely placed to be able to provide significant redundancy and security of internet connectivity. Guernsey is a key intersection for the provision of data flows between the UK, Europe and the United States with multiple cables carrying data into, through and out of its data hub. The e-gaming industry that established itself in the Bailiwick was highly dependent upon internet access and the security and contingency of that connection. Considerable investment was made by Guernsey to develop that network, which is now used for other industries, such as the fund sector.

The fund industry has been thriving in Guernsey for more than 50 years and, during that time, Guernsey has built a comprehensive infrastructure of professional firms capable of providing all the services normally required by an investment manager. Guernsey's law firms are consistently recognised in legal industry awards lists and all the top four accountancy practices have a significant presence in the island.

This provides a strong pool from which businesses new to the island can draw resources, expertise and experience to develop and sustain their service provision. Recent changes to the population management regime have also made it much more straightforward to recruit key staff from outside the island.

Combined with Guernsey's reputation for flexible regulation, innovation and entrepreneurialism, the jurisdiction is a prime location for the establishment of funds and investment managers. With the impending introduction of BEPS (Base Erosion and Profit Shifting) controls and the further scrutiny of the work carried out compared to the revenue earned in a jurisdiction and the unintended consequences that this is having on the funds sector, Guernsey is well placed to be able to demonstrate true substance on island and to provide the added value required to ensure that businesses located here are not seen as part of a BEPS network.

Guernsey is a leading jurisdiction in providing tax transparency and is fully compliant with international co-operation and reporting regimes, which enables it to provide a tax neutral environment that results in taxes being paid in the appropriate jurisdiction and prevents the double or even triple taxation of investment businesses.

With more than 50 years' experience behind us, Guernsey is one of the leading international finance centres in the world, facilitating investment in businesses by investors from countries worldwide.

The Guernsey Investment Fund Association was established 30 years ago as a trade association for the island's fund management industry. It has almost 200 members, including fund managers, administrators, custodians, law firms, accountants, non-executive directors and other professional firms.

Paul Smith on...

His journey

I started in the industry as a junior administrator. The industry itself was still quite young and was growing rapidly. Those were the days before regulation and it was very different in terms of working methods. You worked on one fund – they were generally unit trusts – and did everything on that fund and your relationship was directly with the client. It gave you a very broad foundation.

The changing face of funds in Guernsey

The industry has changed in terms of the products that we have, and the way we work has also changed, led, in part, by the growth of digital and fintech. That change offers an opportunity for Guernsey – we have outsourced labour-intensive back office functions in the past, but with the use of technology some of that work could effectively come back to Guernsey.

With the pioneering use of blockchain now being seen in the island, I do see a future where we can take back those outsourced administration functions, with corresponding benefits in terms of revenues and greater control. The fund industry faces an everchanging regulatory environment and in Guernsey we have consistently adapted to the demands placed upon us. In an environment of increasing regulation, monitoring and scrutiny, Guernsey can hold its head high as a good global citizen helping to ensure the free flow of capital around the world.

Guernsey's confidence

The innovation we have always seen and continue to see in our industry and Guernsey's adaptability is a key element of our success. We have always been prepared to listen to new ideas and explore new ways of achieving our clients' goals, which is crucial in this era of technological advancement.

We are a stable, secure jurisdiction, with a responsible attitude towards our international obligations, and an experienced, flexible and efficient industry. Guernsey is still a great place to live and work and once people come here they are often "blown away" when they see the way that we work, the accessibility of all participants in the industry, and the level of interaction between industry, regulator and government.

An original version of this article first appeared in The Global Fund Media special report on Guernsey fund services, July 2018. Click here to access the full report.

For more information about Guernsey's finance industry please visit www.weareguernsey.com.

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
Related Topics
 
Related Articles
 
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions