Guernsey Consults On Fee Increases

by Amanda Banks, Tax-News.com, London

25 August 2010

The Guernsey Financial Services Commission (FSC) has set out proposed increases in certain fees payable by licence holders to cover the rising cost of regulation.

It was agreed with stakeholders in 2009 that fee increases, proposed for 2010, be increased over a two-year period. In line with this, the Guernsey FSC has published a consultation on proposed increases to fees paid by entities operating in Guernsey. It is Guernsey policy that departments be self-sustaining, paid by the concerned regulated entities.

According to the document, fee changes are proposed to have the following effect:

Banking Division: An overall increase of between GBP9,315 and GBP15,981 in the tariff for annual registrations is proposed for 2011 in order to move further towards ‘breaking even’ in the Banking Division by the end of 2011.

Insurance Division: An overall increase of between GBP190 and GBP670 in the tariff for applications for registration and increases of up to GBP2,650 for annual registrations is proposed for 2011. The increases have been spread proportionately across fee categories. Even with these increases, a deficit of GBP285,000 is expected for 2011.

Fiduciary Division: It is proposed to increase the application fee rates uniformly by up to GBP260. Currently fee rates vary between GBP740 and GBP1,680, with an additional GBP224 per group applicant. The FSC considered that current fees do not reflect the level of work involved in processing applications, and has therefore proposed revising them upward.

Investment Division: Few increases are proposed for entities under the auspices of the Investment Division. It is proposed to increase some annual fees by variable amounts as part of a general restructure of fees, 'whilst retaining competitiveness with comparable jurisdictions'. Many fees will remain unchanged.

Non-Regulated Financial Services Businesses and Prescribed Businesses (PBs): The Commission proposes revising the current tariff of application and base annual fee levels of non-regulated financial services businesses upwards for 2011 by GBP208. For PBs, an increase of GBP115 in the base registration/annual fee and of GBP17 for each Full-Time Equivalent (FTE) employee is proposed.

In addition, the fee on amalgamations and migrations is set to increase from GBP1,500 to GBP2,500.

The FSC’s consultation explains that the hikes are necessary to ensure adequate funding for the island’s regulators, to accommodate for rising regulatory costs and short-term falls in license numbers.

Recommended