Rules and Guidance
All entities licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 to conduct controlled investment business are required to comply with the following rules and guidance:
- The Licensees (Conduct of Business) Rules and Guidance, 2021
- The Licensees (Capital Adequacy) Rules and Guidance, 2021
Where relevant the following rules and guidance should be complied with:
- Outsourcing of functions by entities licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 2020
- Principles of Conduct of Derivative Business
- Investment Exchange Rules, 1998
- Designated Territories Regulations, 1989
- Designated Territories Regulations, 1992
- Investor Protection (Designated Countries and Territories) (Amendment) (AIFMD) Regulations, 2015
Audit Requirements for Managers of Private Investment Funds
Where an entity licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 (“the POI Law”) acts solely as the manager to one or more Private Investment Fund (“PIF”), and does not undertake any other Controlled Investment Business, then the Commission will dis-apply the Licensees (Conduct of Business) Rules and Guidance, 2021 in respect of that Licensee. Furthermore, and pursuant to Section 43(9) of the POI Law, the Commission exempts entities which are licenced under the POI Law that act solely as the manager to one or more PIFs from the application of Section 43(1) of the POI Law (being the requirement to appoint an auditor). Therefore, the Commission does not require a PIF Manager to appoint an auditor or to prepare and submit audited accounts to the Commission (for itself as a Licensee). Whilst the above relates solely to the Commission’s requirements, such Licensees and their Directors and Administrators should remain mindful of any obligations of the Licensee to other parties in respect of these matters (for example the requirements contained in their constitutive documents, or any other legislation to which they may be subject). For the avoidance of doubt, the above comments relate to PIF Managers. The PIF itself is still required to appoint an auditor, and to prepare and submit audited accounts to the Commission in accordance with the Private Investment Fund Rules and Guidance (2), 2021.
Approach to Supervision;
The Investment, Fiduciary and Pension Division supervises its licensees by conducting regular desk based off-site monitoring supplemented by periodic on-site compliance visits.
Desk Based Monitoring
Licensees are required to comply with the Licensees (Conduct of Business) Rules and Guidance, 2021 and the notifications stipulated therein. In addition, Licensees are required to comply with the Licensees (Capital Adequacy) Rules and Guidance, 2021.
Some of the more common changes requiring notification are listed below:
Change of Name or Address
A licensee must notify the Commission of a change to its registered or equivalent name and of any change to its registered address or principal place of business.
Key employees
A licensee must notify the Commission of any changes to managers involved with the licensee's controlled investment business in Guernsey, the secretary of the licensee, the Compliance Officer, the Money Laundering Reporting Officer, and the Money Laundering Compliance Officer, and should include a statement of the reasons for the change. Licensees should remain aware that changes to certain of these positions requires the Commission's prior statement of no objection before they take place and reference should be made to Sections 39 to 42 of the Protection of Investors (Bailiwick of Guernsey) Law, 2020 in this respect.
Complaints
If a significant complaint remains unsettled for longer than three months, the licensee shall immediately inform the Commission and shall also advise the complainant that he may inform the Commission directly of his complaint.
Annual Compliance Return
All licensees must file annually with the Commission their compliance return using the Commissions on-line portal. Please refer to the Returns section for further information with regard to the requirements of the annual compliance return.
Compliance Visits
The Investment, Fiduciary and Pension Division performs regular visits to its licensees to enhance the Division's understanding of the licensee's business, and to review the risk management systems and internal controls in operation to ensure compliance with the Licensees (Conduct of Business) Rules and Guidance, 2021 and the Licensees (Capital Adequacy) Rules and Guidance, 2021.
Extension of Licence
Where a Licensee wishes to extend the Categories of Investments and/or Restricted Activities which it is licensed to conduct, an application form should be submitted.
Appointment of a Skilled Person
The Commission may appoint a Skilled Person to investigate and report directly to the Commission in order to mitigate and manage prudential, conduct or financial crime risks identified for a licensee. Further information about Skilled Persons is available in this Explanatory Note.