Guernsey consultation to update regs governing ‘non-regulated’ financial businesses
The Guernsey Financial Services Commission has issued a consultation paper that aims to update its regulations governing financial services businesses that fall outside of traditional banking and fund management channels.
The 103-page Lending, Credit & Finance Consultation Paper is aimed jointly at enabling Guernsey to accommodate the growing number of “innovative, often digitally-enabled, financial services which don’t neatly fit into the boxes marked banking, insurance, investment or fiduciary covered by current laws”, as well as to better protect Guernsey consumers and investors, “particularly those who are less financially able, from unscrupulous lending practises”, the GFSC says, in a summary of the LC&FCP‘s contents.
The consultation, unveiled last week, is the second to address the issue of a type of business now referred to on the Channel Island as Non-Regulated Financial Services Businesses, following the introduction in 2008 of legislation providing for such NRFSBs.
The proposed legislation would replace this existing NRFSB Law.
The consultation closes on 15 September.
In a statement accompanying the consultation paper, the GFSC noted that in addition to seeking to create “a stable and practical regulatory environment that enables the growth of electronically-enabled financial services, further to the States ambitions to develop this sector of the Bailiwick’s economy”, it also was hoping to establish a framework that would provide for peer-to-peer lending entities, crowd-funding platforms, customer due diligence platforms and green investment entities to establish themselves on the island.
Elements of the consultation paper that are intended to reinforce existing legislation covering lending practices are a separate category of regulation and are, the GFSC said, aimed at enabling it to better control the way non-banking financial entities lend money to Guernsey residents, and “to help defend vulnerable consumers from loan sharks and others employing dubious, non-transparent lending techniques which are currently almost entirely unregulated”.
Gillian Browning, who joined the GFSC in September, 2014 from the UK’s Financial Conduct Authority, as Fiduciary Supervision Policy & Innovations Director, said in a statement that the consultation paper was an “invitation” to those in the lending, credit and finance industries to help the organisation to build a regulatory regime “which is proportionate, protects consumers, stimulates the economy and further enhances the reputation of Bailiwick as a respected financial centre”.
To read and download the consultation paper, click here.