Guernsey: Things To Shout About

Last Updated: 22 July 2009
Article by Andrew Walters

Most Read Contributor in Guernsey, September 2018

Originally published in Contact, July 2009

The impact of the global economic downturn has grabbed headlines and, according to much of the media, caused investors the world over to tighten their purse strings, however, Ozannes' Partner Andrew Walters believes Guernsey has a number of things to shout about.

It would appear that Guernsey is weathering the current storm reasonably well and most local financial services providers seem to have their plates full as a result of promoters seizing the opportunity to consolidate and restructure their existing product ranges.

Nonetheless, most service providers will admit to having seen a downturn in the number of new funds being established and enquiry-to-completion conversion rates are undoubtedly lower than those achieved in previous years. Deals are fewer and farther between and Guernsey therefore has to put clear blue water between itself and the competition in order to maintain and grow its market share. Fortunately, it has a number of things to shout about.

The introduction of the Companies Law in 2008 saw a reboot of the corporate system and the introduction of a new and improved statutory regime for company vehicles. The new law is considerably more sophisticated than its predecessor and provides a degree of flexibility that was not previously available. As part of this statutory overhaul, the Guernsey Registry was established, thereby replacing an outdated and manual system of record filing, retention and retrieval. The new system has also seen an end to the old Advocate-only incorporation system, thus permitting the incorporation of companies by a range of licensed service providers. Furthermore, such companies can, subject to certain basic requirements, be established within record timeframes of as little as 15 minutes. Few other jurisdictions can boast this kind of flexible and user-friendly company regime.

Significant weight has been attached to the White List published on 2 April 2009 by the OECD. This represents a progress report on jurisdictions surveyed by the OECD Global Forum in implementing internationally agreed tax standards. Guernsey's inclusion on the "White List" shows that the Island has clearly met the standards set by the OECD. This has already had a positive impact on the market's perception of our island and most local lawyers will confirm an increase in the number of enquiries relating to migrations of existing overseas funds into Guernsey. The relative ease and simplicity of the migration process under Guernsey's new company law, coupled with the jurisdiction's international reputation for proper regulation, represents a strong marketing tool for those seeking to attract existing business from other jurisdictions.

Guernsey has long been regarded as a well-regulated financial centre and has sought to achieve a sensible balance between investor protection and business efficacy. By applying sensible regulatory principles, the Guernsey regulator has been comfortable welcoming a variety of mainstream, alternative and niche funds to the Island. Despite the losses recently suffered by many funds - including those that have recently landed Bernie Madoff in the slammer until 2159 - and the consequential knee-jerk reactions of many states, legitimate financial products offering investors an opportunity to spread risk and diversify portfolios are still welcomed by the Guernsey Financial Services Commission.

The Island's regulator has adopted a pragmatic and flexible approach to funds, rather than pursuing the more dogmatic and rigid approach sometimes found elsewhere. The Commission is usually willing to meet new promoters contemplating the establishment of a new fund in Guernsey. This allows for full and frank dialogue prior to commencement of the fund launch and usually provides promoters with a clear expectation of what will be expected of them. This is not something that is available in all jurisdictions.

Where previously the jurisdiction may have been criticised for not providing alternative expedited regulatory approval processes, the regulator can now only be applauded for its introduction of "registered" and so-called "qualifying investor" funds. These funds have further streamlined the approval process for both open and closed-ended funds in that they offer the opportunity to "fast-track" the approval process and to obtain GFSC registration within three working days of receipt of the requisite documents. The onus here falls on the Guernsey fund administrator to conduct due diligence on the fund's promoter and proposed structure and to certify to the GFSC that these satisfy registration criteria.

Having said all this, Guernsey will have to continue working hard to promote its reputation as it faces tough new challenges from the international community. Only months after having satisfied the OECD that it should be placed on the White List, Guernsey now faces another international challenge in the form of the recently published European Directive on Alternative Investment Fund Managers. Once again, Guernsey's representatives have been quick to act and the Finance Sector Group of the Commerce and Employment Department is considering the technical content along with a number of industry representatives in Guernsey and the UK with a view to commenting on the proposals. The Guernsey International Fund Association has also established a technical sub-committee to consider the impact of the Directive.

Under the Directive's current draft form, Guernsey will need to obtain equivalent third country status from the EU regulators if it is to avoid suffering negative consequences as a result of the Directive's introduction. Guernsey has an established track record of meeting internationally recognised regulatory standards and it is expected that all necessary action will be taken to ensure that this status is achieved. Guernsey already has in place a number of the features necessary to achieve equivalence under the draft Directive, including Tax Information Exchange Agreements with a range of EU member states and information exchange on regulatory matters.

At present, there is a great deal of uncertainty as to what form the Directive will eventually take and when it will be finalised. Much lobbying is currently being undertaken by a range of bodies and it is apparent that the Directive is likely to be debated in some detail. Until the Directive is finalised it is not possible to comment with any accuracy on its effect and the legislative and regulatory steps that may need to be taken in Guernsey to secure equivalent status.

Overall, Guernsey's progressive programme of legislative innovations, proximity to European financial centres and reputation for stability, strong corporate governance standards and flexible regulation continue to promote it as a domicile of choice for the establishment of funds and other financial products. Guernsey's continued success is testament to the way in which its regulator and funds professionals have adapted to meet global international challenges. There is little doubt that the Island will find new and innovative ways of meeting current and future challenges as and when they arise.

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