Guernsey regulator fines locally-based trust firm for compliance failures

Guernsey’s financial services regulator has fined a locally-based trust and corporate services provider,  Richmond Fiduciary Group Ltd, £45,500, after identifying what it said were a number of compliance failures in an investigation into the company that began in 2016.

In a statement posted on its website, the Guernsey Financial Services Commission said it considered it “reasonable and necessary” to take action against the company after “having concluded that [the Richmond Fiduciary Group] had failed to ensure compliance” with a number of Guernsey regulations governing fiduciaries, trusts and corporate services providers, as well as certain codes of practice.

The GFSC said that both the level and scope of the sanctions it was taking against the Richmond Fiduciary Group had been “tempered by the historic nature of the identified failures, the remediation process that was promptly undertaken by [the company] and the implementation [by Richmond] of a new compliance, risk and governance structure” following an initial visit in 2016 by GFSC officials, and their presentation of their findings.

The company had also “significantly strengthened its compliance function…expanded its compliance team by over a third in number, [and]  completed a restructure and remediation of its governance structure, its policies and procedures and its customer base,” the GFSC acknowledged.

Richmond Fiduciary Group executives didn’t immediately reply to a request for comment on Monday.

‘Serious instances of governance, operational failings’

In their 2016 visit, which the GFSC said took place between 29 February and 4 March of that year, and in a subsequent investigation, the commission’s officials had identified “serious instances of governance and operational failings, as well as failings in respect of [Richmond’s] compliance” with applicable anti-money-laundering/terrorism financing-related regulations.

“Many of the issues were repeat issues noted from an on-site visit carried out by the commission in June 2013 onwards, but the licensee had, in a number of instances, failed to effectively address these shortcomings until undertaking an extensive remediation programme in 2016,” the GFSC statement notes.

Nevertheless, “at all times, the directors of [Richmond] cooperated fully with the commission”, the GFSC noted, and because the company had agreed to settle “at an early stage of the process” it had been awarded a  30% discount in the fine it was ultimately given.

According to its website, the Richmond Fiduciary Group had been established in 1988, and offered fiduciary services “including professional trust and company formation and management” services. In February 2016, just weeks before the first GFSC visit, a new senior management team took over following a management buyout, led by then-managing director Mike Good.

At the time, the company was described as having a strong client base in Southern Africa, as well as into the UK and Europe, and was looking to increase its business in the area of international pensions.

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