GFSC Welcomes Split-Cap Hearing Findings

by Jason Gorringe, Tax-News.com, London

20 February 2003

The Guernsey Financial Services Commission announced this week that it welcomed the findings of the Treasury Select Committee's investigation into the collapse of several prominent split capital investment trusts.

Prior to the collapse of the risky investment vehicles which is thought to have lost 50,000 investors more than £770 million, director of investment business at the GFSC, Peter Moffatt warned the UK's Financial Services Authority (FSA) over the 'potentially incestuous nature' of the investment trusts, and announced that the Guernsey regulator would be stepping up its risk warnings to investors. This caution was ignored by the FSA.

Throughout the investigation process, Guernsey has received praise for its swift action on the issue. According to a Guernsey Press and Star report, at an earlier hearing, Tory MP David Ruffley compared the FSA unfavourably to its Guernsey counterpart:

'Is it not the case that they are a light and nimble regulator who basically cut off the problem at the pass before you did?' He asked FSA chairman, Sir Howard Davies, adding: 'I suggest you learn something from them.'

Speaking to the local newspaper, GFSC director-general, Peter Neville announced that: 'We welcome the conclusion of the report and the endorsement of the GFSC's handling of the issue.' However, he went on to add that the Guernsey regulator will be closely monitoring calls by MPs for split-cap investors to receive compensation:

'We are watching that very closely because if anything has been done untoward locally by a local firm, that is something we will have to look at,' he explained.

Recommended