The Payment Services Directive (2015/2366), which is transposed into Gibraltar law via the Financial Services (Payment Services) Regulations 2018;
The Electronic Money Institutions Directive (2009/110/EC), which is transposed into Gibraltar law via the Financial Services (Electronic Money) Regulations 2011;
The Financial Services (Banking) Act 1992 (as amended);
The Financial Services (Distributed Ledger Technology Providers) Regulations 2017;
The Financial Services (Investment and Fiduciary Services) Act 1989;
The Financial Services (Markets in Financial Instruments) Act 2018;
The Financial Services (Collective Investment Schemes) Act 2011;
The Financial Services (Alternative Investment Fund Managers) Regulations 2013;
The EU Prospectus Regulation (2017/1129);
The Financial Services (Moneylending) Act 1917;
The Financial Services (Insurance Companies) Act 1987 (as amended); and
The Prospectuses Act 2005.
Answer ... The abovementioned domestic and EU legacy frameworks (eg, the EU Market in Financial Instruments Directive and the Payment Services Directive) serve as the principal legislative regimes underpinning fintech in Gibraltar. However, with the enactment of the Financial Services (Distributed Ledger Technology Providers) Regulations 2017, Gibraltar has distinguished itself from other jurisdictions globally at the forefront of fintech by establishing a principles-based legislative framework that brings into regulatory scope any firm carrying out by way of business, in or from Gibraltar, the use of distributed ledger technology for storing or transmitting value belonging to others.
Answer ... The Financial Services Commission (FSC) in Gibraltar is the primary competent authority, whose mandate is to regulate the financial services industry by ensuring the promotion of good business, consumer protection and enhancement of Gibraltar’s reputation as a quality financial services centre. The FSC’s main role and regulatory powers encompass the authorisation, supervision and enforcement of regulated entities under the abovementioned legislative frameworks.
The above applies, save for the business of money lending, which is licensed and falls under the regulatory remit of the government of Gibraltar.
Answer ... The FSC operates a risk-based approach, underpinned by a Risk Governance Framework (RGF), to innovative offerings and businesses within the Gibraltar finance industry. The RGF prescribes a set of processes, policies, standards and disciplines that safeguard a consistent understanding of risk, as well as the adequate resource allocation in those areas which are outside the FSC’s risk appetite and tolerance. This approach ensures a focus on how best to support the safe growth of the jurisdiction while not stifling innovation within the industry.
Answer ... Key industry associations such as the Gibraltar Association of Compliance Officers, the Gibraltar Electronic Money Association, the Gibraltar Bankers Association and the newly formed Gibraltar Association for New Technologies operate as formal lines of communication between policy makers and the private sector in Gibraltar’s fintech industry, facilitating the exchange of information and ideas, with a view to enhancing knowledge and awareness within the industry. Further industry organisations have similarly embraced fintech offerings – an example is the Gibraltar Funds and Investments Association’s publication of a Code of Conduct for Crypto Funds in October 2018.