Consultation Paper on the proposed replacement of the current Fiduciary Rules, 2020 by the new Fiduciary Rules, 2021

Closed 17 Jun 2021

Opened 21 Apr 2021

Overview

Introduction

Purpose of the Consultation Paper

The Commission seeks to regulate and supervise financial services in the Bailiwick of Guernsey with integrity, proportionality, and professional excellence, and in so doing help to uphold the international reputation of the Bailiwick of Guernsey as a finance centre.

The purpose of this Consultation Paper is to seek feedback from all interested parties on the proposed replacement of the current Fiduciary Rules, 2020 (and certain other associated secondary legislation as set out below) with the Fiduciary Rules, 2021. 

Consistent with the Commission’s objectives, the proposals in this Consultation Paper are designed to enhance the levels of confidence and security in the Bailiwick’s regulatory and supervisory framework.

The detailed proposals are set out within this document and in the draft Fiduciary Rules, 2021 which are provided in Appendix 1 to this paper in “consolidated” form including Commission Guidance.

This Consultation Paper is a working document and does not prejudge any final decision to be made by the Commission.

Background - Law 

For the past 20 years, Licensees and the Commission have been operating under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000 (the “2000 Fiduciaries Law”).

In 2020 the States of Guernsey, the States of Alderney, and the Chief Pleas of Sark, as part of a comprehensive review of the legislation governing the finance industry, approved The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2020 (the “2020 Fiduciaries Law”). This law forms part of the suite of amended legislation contemplated in the Policy Letter submitted by the Policy Council on the Revision of the Financial Supervisory and Regulatory Laws on the 30th of October 2015.

This underlying law change necessitates the Commission to review all associated secondary legislation to ensure it is compliant with the new law.

Background - Rules

The Fiduciary Rules, 2020 (“the Current Fiduciary Rules”) have been in operation since 31 December 2020 and were made in exercise of the Commission’s powers under the 2000 Fiduciaries Law.  These rules were introduced following comprehensive sector-specific consultation on the consolidation and revision of previous fiduciary codes.

It is proposed that the Fiduciary Rules, 2021 will repeal the Current Fiduciary Rules and also the Regulation of Fiduciaries (Annual Return) Regulations, 2017 (the “Annual Return Regulations”) and the Regulation of Fiduciaries (Fiduciary Advertisements and Annual Returns) Regulations, 2012.

Whilst the proposed new Fiduciary Rules, 2021 will largely mirror the Current Fiduciary Rules and incorporate the provisions of the repealed Regulations, there are certain proposed amendments and additions, which reflect matters which will be introduced or changed when the new 2020 Fiduciaries Law is enacted and these are considered in this Consultation Paper.

Besides amending references to relevant laws under which the Rules are made, other proposed material changes include:

  • The introduction of rules to account for, and relevant to, the different and new categories of licence under the new law, and how changes of categorisation can be effected (proposals in this respect were previously made in a Commission Discussion Paper, details of which as set out below);
  • Provisions for annual returns – coming from relevant regulation; and
  • Repeal of restrictions on PFL advertising.

These are covered individually in the following sections of this Consultation Paper.

Contemporary Commission consultations

The Commission has also published two additional parallel consultation papers which may be of relevance to the reader of this consultation paper.

The first consultation paper[1] consults on proposed re-issuance of other Regulations and Rules reflecting the aforementioned Revision of the Financial Supervisory and Regulatory Laws.  In the main, the changes proposed in that paper are minor.

The second consultation paper[2] consults on notification rules for vehicles which are ancillary to investment activity. While notification will be made under the Protection of Investors (Bailiwick of Guernsey) Law, 2020, the activity notified will be exempt from the scope of the new 2020 Fiduciaries Law.


[1] [2]  Both consultation papers can be found at the Commission’s Consultation Hub here.

Audiences

  • Anyone from any background