Transcript Trusts and Private Clients Seminar – The regulatory

Trusts and Private Clients Seminar –
“The regulatory environment”
Marcus Killick, Financial Services
Commissioner
Manchester - Thursday 24 February
2005
1
The Financial Services Commission (FSC) Mission
Statement
“To supervise and regulate Gibraltar’s
financial services to protect the public and
enhance Gibraltar as a quality financial
centre."
2
The Financial Services
Commission (FSC)
Created under the Financial Services
Commission Ordinance 1989,
therefore
One of the oldest independent
regulatory bodies offshore
Unitary regulator
Commitment to transparency of
approach
Policy of consultation
Risk-based, case-by-case approach
rather than “one size fits all”
3
Regulatory scope
Banking
Insurance
Investment Services
Mutual Funds/Collective Investment
Schemes
Fiduciaries/Company service
providers
4
FSC structure
Commissioner plus 18 staff
Divided by sector (Banking, insurance,
investment services, fiduciaries)
together with support staff
Sector specialisation allows for better
understanding of and relationship with
industry
5
Obligations on FSC regarding
supervision
Subject to EU directives and
regulations
Commitment to continuing to meet
relevant international standards
Statutory obligation to “match” UK in
supervisory standards
FSC has also adopted regulatory
objectives and principles of good
regulation similar to the FSA’s
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Quality control on the FSC
 The FSC has been the subject of three recent
independent reviews
 IMF 2001
 FATF 2002
 Statutory review 2004/5
 Each has been positive.
 "Gibraltar has in place a robust arsenal of legislation,
regulations and administrative practices to counter money
laundering". [FATF]
 “Supervision is generally effective and thorough and that
Gibraltar ranks as a well-developed supervisor".[IMF]
 “a regulatory regime developed to a good standard and
staffed by competent regulators with a manifest
determination to improve performance further”[Statutory
Review]
7
Fiduciaries In Gibraltar
8
Regulation of fiduciaries
 Regulated since 1991, first jurisdiction to regulate
activity
 Activities covered (by way of business) are:
Company Management
 Formation, management or administration of companies,
partnerships or other unincorporated bodies
 Provision of directorships
 Provision of company secretary or other officer (other than
director) of a company, partnership or other
unincorporated body
 Nominee shareholdings
 Registered office
Professional Trusteeship
 Holding out or soliciting for business as a professional
trustee
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Regulation
Fit and proper requirement
Subject to conduct of business
regulations
Subject to anti money laundering/
combating the funding of terrorism
obligations
Ongoing supervision, including on site
visits
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Conduct of business
obligations
 High standards of integrity and fair
dealing/conflicts of interest
 Due skill, care and diligence
 High standards of market practice
 Know your customer
 Handling of customer assets
 Maintenance of adequate financial
resources
 Proper internal organisation
 Relations with the Commissioner
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Anti money laundering/CFT
 For fiduciaries Gibraltar is fully 2nd Money
Laundering Directive Compliant
“Gibraltar’s standards with respect to the
application of the [Second Money Laundering]
Directive to professional trustees and company
managers exceed those in the UK”. Statutory
Review Para 4.28
 Gibraltar also already meets likely
obligations to be imposed under the Third
Directive. Therefore,
 No “evolutionary jump” issues when 3rd
Directive enters into effect, this provides
stability.
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Impact
 Reduction of abuse and incompetence
 No “nominee” directors
 No promises of “guaranteed” bank accounts,
 No “no records kept in jurisdiction” promises
 Policy re bearer shares (originals to be kept
under safe custody);
 Policy re unlimited Powers of Attorney (in scope
and time).
 Result
 Better professionalism,
 Better reputation;
 Greater client confidence.
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The future
“Approved” persons regime, also
covering,
 Corporate Governance
Role of non executive directors
Enhanced Training and Competency
requirements
14
Conclusion
Mature regulatory environment
Transparent
Known
Independently verified
Offering good client confidence, with
Good industry/regulator relationship
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