Guernsey's Director Registration Regime

It is essential that directors determine whether they fall within the scope of the Director Registration Regime and, if so, familiarise themselves with its requirements and register themselves with the Commission.

What is the Six Directorship Exemption?

Acting as a director of a company or incorporated body (whether incorporated in or under the laws of the Bailiwick of Guernsey or elsewhere) by way of business¹ is a regulated activity under the Fiduciaries Law. This applies to any person acting as a director "in or from within the Bailiwick".

There are various exemptions to the licensing requirement, set out in section 3(1) of the Fiduciaries Law. The Six Directorships Exemptions is essentially a "residual" exemption: a director is permitted a maximum of six directorships in respect of which no other exemption is available under section 3(1) of the Fiduciaries Law.

It is important to remember that:

• the Director Registration Regime and supervisory framework only impact those individuals who rely on the Six Directorships Exemption; and
• the Six Directorships Exemption only applies to directorships not covered by any of the other statutory exemptions described herein.

To whom does the Director Registration Regime apply? 

A director will be subject to the Director Registration Regime where he or she relies on the Six Directorships Exemption, and any one or more of those six directorships is in respect of a company that is neither:

• administered by a Bailiwick licensed fiduciary (which acts as the resident agent of the company); nor
• registered under the Charities and Non Profit Organisations (Registration) (Guernsey) Law, 2008.

Where and how do you register?

Any director to whom the Director Registration Regime applies (a "Registrable Director") must register with the Commission.

Registration is a two-stage process:

• Stage 1: a Registrable Director must complete a "DRR Registration Form", to be submitted to the Commission via email; then
• Stage 2: when advised to do so by the Commission, a Registrable Director must complete a Director Registration Regime Return (Form 155) (the "DRR Return") via the Commission’s Online Submissions portal.

How long does it take? 

The Commission expects to respond within seven calendar days of receiving the DRR Registration Form.

The Commission will confirm registration once both stages of the registration process are complete. Registration is private, so the names and details of registered directors are not published on the Commission's website.

How much does it cost?

Registration costs £85 (to be paid at the same time as the submission of the DRR Registration Form). There is an annual fee of £85.

What are the ongoing registration requirements?

Directors registered under the Director Registration Regime (a "Registered Director") must annually provide a statement of their directorships to the Commission using the DRR Return, which is used to validate the Registered Director's information.

The DRR Return will be made available for completion annually on 30 September for submission no later than 14 November.

Interim updates in respect of a Registered Director's directorships are not required unless such director's registration is no longer required, in which case a de-registration notification (Form 236) should be completed.

Notwithstanding the above, the Commission must be notified via the Online Submissions Portal of any errors identified in the original submission or any changes to personal information (name, address, or email address).

What is the impact of being registered?

Although Registered Directors are not required to hold a personal fiduciary licence under the Fiduciaries Law, their activities constitute "relevant business"² subject to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 (the "PoC Law"). 

The Director Registration Regime expanded the scope of the Commission's supervisory powers in respect of Registered Directors, thereby enhancing the effectiveness of the Bailiwick’s supervisory framework.

These supervisory powers include the power to obtain information and documents and carry out site visits and investigations, as well as various enforcement powers (which include powers to suspend registration, issue private reprimands, discretionary financial penalties, public statements and disqualification orders). 

In addition, the Commission monitors and verifies compliance by Registered Directors with their anti-money laundering and countering the financing of terrorism ("AML/CFT") obligations (see below) prescribed under the PoC Law. This aspect of the Director Registration Regime addresses specific recommendations made by MONEYVAL in its 2015 Report that the Bailiwick "should take measures to ensure effective compliance with the AML/CFT requirements in respect of persons acting as a director (for less than six companies) without a personal fiduciary licence but who are subject to the AML/CFT requirements through effective supervision of these directors".

What are a Registered Director's AML/CFT obligations?

Prior to the introduction of the Director Registration Regime, an individual director who relied on the Six Directorship Exemption was classified as a "financial services business". The AML/CFT obligations imposed included corporate governance, risk assessment, identification and other due diligence measures, monitoring of transactions and activity, the reporting of suspicion, employee screening, training, and record keeping. 

Now, as Registered Directors are classified as a "relevant business" within the PoC Law, they benefit from specific carve-outs from the AML/CFT requirements of Schedule 3 of the PoC Law. In effect, a bespoke AML/CFT regime is available for Registered Directors.

Schedule 3 specifically disapplies³ four key paragraphs of the AML/CFT regime to Registered Directors, meaning inter alia that (i) the need to have in place effective policies, procedures and controls, (ii) the duty to understand, and assess and mitigate, risks and carry out risk assessments, (iii) the ability to accept and rely on customer identification data and documents obtained by an introducer and (iii) the obligations to appoint a money laundering reporting officer and a money laundering compliance officer, do not apply to Registered Directors.

Registered Directors are required to:

• conduct AML/CFT checks on the UBOs, and their fellow directors, of the companies of which they are a director;
• monitor transactions and other activities of those companies;
• make appropriate disclosures; and
• maintain appropriate records.

In so doing, Registered Directors are also required to have regard to:

• relevant rules and guidance in the Commission's Handbook on Countering Financial Crime and Terrorist Financing;
• any relevant notices issued by the Commission under the PoC Law; and
• the National Risk Assessment publish by the Commission from time to time.

Carey Olsen's view

The Director Registration Regime was implemented with the specific aim of providing a mechanism for the Commission to monitor and verify compliance of the AML/CFT obligations by directors who avail themselves of the Six Directorship Exemption. This is achieved using a registration framework, as opposed to a (more onerous) licensing framework. This is a more pragmatic and proportionate manner to address the point raised by MONEYVAL in its 2015 report.

At the same time, it provides a simplified and tailored AML/CFT framework ensuring that it is as user-friendly and straightforward as possible.

Footnotes

1. A director will be considered to be acting "by way of business" if he or she receives any income, fee, emolument or other consideration in money or money's worth for so acting.

2. Paragraph 6 of Schedule 2 of the PoC Law provides that persons relying on the Six Directorships Exemption are a "relevant business", which in turn constitutes a "prescribed business" (see section 21 of Schedule 3 of the PoC Law) and in turn a "specified business" (see section 1 of Schedule 3 of the PoC Law) to which Schedule 3 of the PoC Law applies.

3. See paragraph 1(3) of Schedule 3 of the PoC Law.