Guernsey – CM PB – Update 2023

Country Manuals Private Banking –

Dear Client,

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

• GUERNSEY OUT OF BANK’S COUNTRY OF ESTABLISHMENT (Def, RS, BT & RT)

Guernsey regulation has been subject to change there has been a Revision of Laws project.

The Banking Supervision (Bailiwick of Guernsey) Law 2020 has been implemented, repealing and replacing the Banking Supervision (Bailiwick of Guernsey) Law 1994 (the 1994 Banking Law), as part of the Revision of Laws project of the Guernsey Financial Services Commission (GFSC). The core approach to the regulation of deposit-taking business in Guernsey, and the activities captured by the definition of “deposit-taking business” remain unchanged.

In addition, the Protection of Investors (Bailiwick of Guernsey) Law, 2020 has been implemented, repealing and replacing the Protection of Investors (Bailiwick of Guernsey) Law, 1987 the categories of licensees, exemptions available and the definition of controlled investments have remained unchanged. Details relating to the operation of licensees and other regulated entities and the powers of the GFSC to supervise licensees and other entities carrying on controlled investment business have been amended.

Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020- this new law set out the enforcement powers of the GFSC. These powers were moved from the Banking Supervision (Bailiwick of Guernsey) Law 1994 and the Protection of Investors (Bailiwick of Guernsey) Law 1987 into this new law to make the enforcement process consistent across all regulatory laws and the new law also now houses the market abuse provisions previously found in the 1987 POI Law.

The Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022 was approved in July 2022. It will come fully into effect on 1 July 2023 (although some provisions are already in force), by which time firms carrying on business regulated by the law will need to be licensed and to follow the rules set out by the GFSC. As well as regulating the provision of consumer credit, the law regulates Virtual Asset Service Providers and replaces The Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008.

Regulatory Template, Regulatory Summary and Behaviour Template

Material changes

• For onsite socialising and provision of business cards the answers are now Grey zone/YES to emphasise that onsite activity should be on an occasional basis.
• For presenting the bank in general terms, providing the bank’s annual report and press releases and providing marketing brochures on the bank where the bank takes the initiative, the comments are tailored to Guernsey and emphasise that no deposit advertising should occur and that there should be no solicitation in relation to a particular controlled investment.
• For presentation and provision of documentation of investment services where the bank takes the initiative the comments are tailored to Guernsey and emphasise that there should be no solicitation in relation to a particular controlled investment.
• For active negotiation activity in relation to discretionary management the comments are tailored to Guernsey and emphasise that there should be no solicitation in relation to a particular controlled investment.
• For activity relating to debit cards and credit cards on the bank’s initiative taking place by remote means of communication the answers are now YES as opposed to NO. This is due to change in interpretation following consultation with local experts – debit cards and credit cards may be offered on a cross-border basis into Guernsey if activity is restricted to promotion of debit cards issued and administered outside of Guernsey. Promotion of debit cards on the ground in Guernsey would be likely to require registration under the NRFSB Law, or from July 2023, a license under the LCF Law. Any credit agreement should not be entered into in Guernsey.
• For tolerated onsite activity relating to debit cards and credit cards following reverse solicitation the comments emphasise that no cards should be issued in Guernsey.

Non-material changes

• In a number of instances the comments for Grey zone/YES have been changed to reflect standardised comments that BRP has adopted as a result of using a new editing platform for the creation of manuals. The underlying reasoning has not changed.
• Several comments have been slightly reworded (without introducing material changes) to reflect the regulatory situation/current interpretation of the regulatory framework more accurately.

Implications for business relations with third parties

With respect to the provision of documentation to an EAM (such as documentation on the Bank’s banking and investment services, investment research and financial analysis or recommendation lists), the Country Manual distinguishes between the provision to an EAM for remittance to the end client on one hand and the provision to an EAM for the EAM’s own professional purposes on the other hand. The answers have been amended accordingly.

Regulatory Summary

This document has now a more user-friendly layout and reflects the changes contained in the RT.

BT Short Comparison

BRP has created a comparison document allowing users to quickly identify the modifications made compared to the previous version of the PB Manual (BT Short Comparison). The BT Short Comparison can be found on BRP’s platform (mybrponline) in the Search tab by entering in the Document Field “CM PB BT SHORT COMP” and “GUERNSEY” in the Target Country Field.

The BT Short Comparison should be read as follows:

The first column contains a short description of the activity in question. The second column contains the answers of the previous version of the Country Manual (online until the day of the alert). The third column contains the new answers of the most recent version of the Country Manual. Only the modified answers are displayed (in colour). If the answers in the new version are unchanged compared to the previous version, they are shaded in grey.

For more information, please contact us: info@brpsa.com

Best regards,