Guernsey: The Future Role Of The Guernsey Financial Services Commission

Last Updated: 18 November 1999
Article by David Archer
Elsewhere in this book the Commission's objective has been described as being to provide effective, professional supervision and modern regulation of the finance sector to the highest international standards within a diverse and innovative environment. The last two years have tested the Commission's ability to meet that objective. The future will be equally challenging.

For example, the United Kingdom Home Office review report of financial regulation in the Crown Dependencies made a number of suggestions as to how Guernsey's regulation of financial services businesses could be changed. Many of those changes had been accepted and planned before the review was announced while others have required reflection by the Commission. The last two years have also seen the publication by the Basle Committee on Banking Supervision (the body which sets international standards for banking supervision) of the Core Principles of Effective Banking Supervision and the methodology to those principles. In addition, the International Organization of Securities Commissions (the body responsible for setting international standards for securities regulation) has recently published its Objectives and Principles of Securities Regulation. The International Association of Insurance Supervision (the body which sets international standards for insurance regulation) has also been active in setting new standards.

This activity by the international regulatory bodies has an attendant effect upon the Commission and financial services businesses in the Bailiwick.

One area not yet subject to international standards is the regulation of directors and trust and company administrators. Nevertheless, these persons represent an important part of Guernsey's finance sector and it is appropriate that the fiduciary sector should be regulated to the same high international standards as the banking, insurance and investment sectors. The fiduciary sector comprises over 200 firms administering in excess of £50 billion of assets. Following the issue of a consultation paper in the summer of 1999 the terms of the proposed fiduciary and administration business law will be agreed in 2000. This ground-breaking legislation will present a challenge to the Commission. However, a great deal of thought has been given to the law and its operation and this, together with the recruitment of specialist executives will, I am sure, lead to the fiduciary sector in the Bailiwick continuing to move from strength to strength.

The Commission's role has had to take account of all of these new standards. In the summer of 1998 the Commission had thirty-five staff and it is likely that there will be over fifty staff within a few months. This may not be the end of expansion of staff members as, in order to meet our international obligations, growth appears inevitable.

In the summer of this year Guernsey was subject to a routine evaluation of its anti-money laundering systems by the Financial Action Task Force on Money Laundering (the body which sets the international standards for the prevention, detection and prosecution of money laundering activity). The Commission was heavily involved with this evaluation and it has become apparent that the Commission's functions in this area have become as important as the roles of the judiciary and law enforcement agencies. This new role is most obvious to the outside world through the issue of the Guidance Notes on the Prevention of Money Laundering by the Commission. Indeed, the law requires that the Guidance Notes are issued by the Commission.

It is likely that other areas of economic crime will also fall within the Commission's remit.

Another significant activity for the Commission is its continuing involvement with the international initiatives facing offshore finance centres. There are some ten published initiatives which the Commission is dealing with currently. Broadly, these fall to be considered under four headings, namely whether offshore centres have adequate regulation of financial services business; whether offshore centres have adequate systems for the prevention, detection and prosecution of economic crime; whether offshore centres can adequately co-operate with other jurisdictions on regulatory and economic crime matters; and whether offshore centres are utilising unfair tax competition to the detriment of other centres.

The United Kingdom is reviewing financial regulation in its Offshore Territories in addition to the Crown Dependencies. Included within all of the reviews by the United Kingdom is discussion of the ability of each offshore centre to co-operate with others. In addition, the Financial Action Task Force evaluation is part of a much wider analysis of all jurisdictions which are committed to meeting that organisation's standards. On the tax front the most significant issue is probably the OECD programme following the publication of a paper entitled "Harmful Tax Competition: An Emerging Global Issue." Forty-seven offshore centres have been asked to prepare a number of papers on their systems of taxation and whether they consider themselves to be tax havens. Guernsey believes that it does not meet the criteria for a tax haven but will have to wait for the OECD's conclusions which are expected in the summer of 2000.

Other important initiatives include the establishment of the G7-Financial Stability Forum and a United Nations programme on the prevention of money laundering. One of the Commission's Directors has already met with representatives of the Financial Stability Forum in Basle and will shortly meet with them again in Singapore. I must confess that the Commission has a particular stake in the United Nations programme as I am a member of the Advisory Group to the United Nations Offshore Forum.

The Commission, therefore, is rapidly moving away from simply acting as a regulator of financial services businesses. I and my staff are now devoting, and will continue to devote, increasing amounts of time to the provision of papers to, and meetings with, organisations engaged in the global scrutiny of international finance centres. Often, a review and the work leading up to it is only a small part of the picture. Indeed, one result of the initiatives is the greater involvement by all of the Commission's Divisions with anti-money laundering measures.

Although self-praise is no recommendation, the Commission has responded well to its new roles. I believe this is because the Bailiwick has a good regulatory framework, because we have a good long-standing reputation for co-operation with other regulators, because of the good standard of local institutions and their clients and because we have co-operated with the organisations undertaking the initiatives. All of the Bailiwick authorities have provided the fullest responses possible to the bodies investigating offshore centres. It is clear that a successful future lies in maintaining this approach. Both the United Nations and the Financial Action Task Force are considering the possibility of identifying non-co-operative jurisdictions rather than taking the view that offshore centres are a single category of jurisdictions requiring attention. I believe that is the correct approach and it is one which the Commission is encouraging.

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

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

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (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

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’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.


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.


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 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.


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.


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.


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.


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

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

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

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