Guernsey Finance

The Commission ensures that the providers of financial services in the Island carry out their business to established international standards. In addition to general powers of supervision, the Commission has statutory powers to enforce compliance with the laws regulating the conduct of finance business in Guernsey.

The Commission's main task under these laws is to ensure that all those institutions authorised to carry on finance business in the Island are fit and proper. This concept embraces integrity, competence and solvency. They should have sound management and adequate capital for their business, be owned and operated by fit and proper persons and observe established international standards of good business practice. Institutions must also comply with international anti-money laundering requirements - new customers must always be properly identified and institutions must take appropriate steps to reassure themselves of the origin of funds transferred to the Island.

The Commission's high levels of international cooperation are demonstared by the fact that it has signed 20 Memorandum of Undertandings (MoUs) with regulatory/supervisory bodies in Australia, Belgium, Cyprus, Dubai, France, Gibraltar, Hong Kong (plus a Letter of Intent with the Hong Secutities and Exchange Commission),  Italy, Isle of Man, Jersey, Malta, Mauritius, Netherlands (two), South Africa, UK (two) and the US (two) as well as the International Organisation of Securities Commissions.

Guernsey's financial regulation and law enforcement standards were commended in a report published in November 2003 by the International Monetary Fund. The Island was found by the IMF to have a high level of compliance for each of the international standards against which the Bailiwick was judged.

All these standards have been adopted by the Island as the foundations on which to maintain its reputation as a leading finance centre. In summary, the report commended:

• The Bailiwick's comprehensive regulatory framework and supervisory structure;
• The action that continues to be taken by the authorities to preserve the Bailiwick's good international reputation;
• The level of international cooperation displayed by the Bailiwick;
• The Commission as being well established and well respected, with experienced staff;
• The fact that Guernsey was one of the first jurisdictions to apply a comprehensive regulatory regime for trust and company service providers;
• The developed framework for anti-money laundering and combating the financing of terrorism; and
• The strong rapport between the Commission and licensed institutions.

The IMF's assessment serves to highlight to the international community Guernsey's outstanding reputation for high standards both in the range its financial services businesses offer and in its regulatory regime. It is also a testament to the effectiveness of the pragmatic approach to regulation in the Island. However, the Commission is conscious that the Island cannot rest on its laurels and that an environment in which the industry can thrive and innovate must be maintained. The Commission therefore meets regularly with industry with the aim of making sure that Guernsey's regime continues to be pragmatic, as well as meeting international standards.