Guernsey – CM C – Update 2023

Sep 14, 2023

Country Manuals Credits

Dear Client,

We would like to inform you that BRP has updated its COUNTRY MANUAL CREDITS for the following jurisdiction:


Law / RegulationYES
New Position of the AuthoritiesYES
Evolution of Expert’s interpretationYES

Regulatory Template

Material changes

Under the Lending, Credit and Finance (Bailiwick of Guernsey) Law 2022 (LCF Law) there are now licensing requirements for consumer credit and activity ancillary to consumer credit and also for persons that carry on or hold themselves out as carrying on financial firm business in or from within Guernsey.

There are three licensing regimes under the LCF law as follows:

  • Part II: Regulation of consumer credit;
  • Part III: Regulation of financial firm business; and virtual asset providers; and
  • Part IV: regulation of financial platforms and intermediation services.

A Part II LCF license is required for consumer credit and mortgage lending in relation to residential property in Guernsey and a Part III LCF licence for financial firm business which includes other types of lending. The LCF law has been fully in effect from July 2023. The Guernsey Financial Services Commission (GFSC) has issued the Lending, Credit and Finance Rules and Guidance, 2023 (LCF Rules) and a notice with respect to the disapplication of the requirement to hold a licence under section 40 of the LCF Law (LCF Exemptions).

Lending (including, without limitation, the provision of consumer credit or mortgage credit, factoring with or without recourse, financing of commercial transactions (including forfeiting) and advancing loans against cheques) is included as financial firm business under the LCF law.

As a result of the implementation of the LCF Law and the guidance provided by the GFSC a stricter approach has been adopted compared to the previous version of this Manual. So in general credit activities on the credit institutions initiative are not allowed onsite or by remote means. Local counsel has confirmed this approach.

Where a Credit Institution actively offers credit to persons in Guernsey it would be deemed as holding itself out as carrying on business within the Bailiwick and will require a Part II or Part III LCF licence (unless an exemption can be applied). A Part II licence would be required for credit offered to consumers in Guernsey.

Where there is no invitation or advertising by the Credit Institution in relation to credit i.e. reverse solicitation – activity would be tolerated – the Credit Institution should not hold itself out as engaging in credit activity in Guernsey.

Non-material changes

The Country Manual has been updated to the new format and entirely reviewed to ensure that the content of the document remains accurate and in line with the evolving interpretation of the current legal and regulatory framework.

Taking account of legal changes:

  • Several comments have been slightly reworded (without introducing material changes) to reflect the regulatory situation/current interpretation of the regulatory framework more accurately;
  • For streamlining purposes, several BT conditions have been reworded without introducing material.

Behaviour Template

The answers in the BT have been aligned to those contained in the RT.

Definitions and Concepts

The document Definitions and Concepts now includes a Concordance Table. This Table is designed to help the users of the Country Manual Credits easily recognize existing or potential interactions between the rules of different types of credits.

For more information, please contact us:

Best regards,