Guernsey Redrafts Business Conduct Rules

by Jason Gorringe, Tax-News.com, London

21 April 2009

The Guernsey Financial Services Commission, in conjunction with a Working Party representative of practitioners across the investment industry, has been preparing new Conduct of Business Rules mandatory for all entities licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended.

The Conduct of Business Rules are the first, and major, part of a process to replace the Licensees (Financial Resources, Notification, Conduct of Business and Compliance) Rules, 1998 and the Collective Investment Schemes (Designated Persons) Rules, 1988. The second and final part of the process is a revision to the Capital Adequacy Rules, anticipated to be released for consultation later in the second quarter of 2009.

The Conduct of Business Rules recognise the very different activities undertaken by the population of licensees under the Law. The main highlights of the Conduct of Business Rules include:

• a comprehensive set of rules outlining the Board of a licensee’s responsibility for the compliance function;
• a recognition that the term 'designated manager' applies to administrators of open-ended and closed-ended collective investment schemes;
• the proposed rules do not impose MiFID-style provisions on licensees; nevertheless, the Rules recognise that group requirements will apply to some firms and do not, therefore, conflict with MiFID provisions;
• the client money rules have been made more rigorous.

A comprehensive report on the proposed changes is available on the GFSC’s website.

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