EY’s Channel Islands Extended Assurance team want to ensure that you are aware of the current regulatory landscape in Guernsey and what actions your firm may need to, or wish to, proactively take. The team has a wealth of skills and experience in supporting firms in risk, compliance and business strategy and operations, including ensuring that firms’ policies, procedures and controls are in line with new regulatory standards.
The pan-Channel Islands team explains that as firms begin to look towards a post-pandemic landscape, it is more crucial than ever for them to reflect on the continued regulatory challenges being faced.
Have your say on the GFSC Revision of Laws Project consultation papers – closing 17 June
On 21 April 2021, the GFSC issued three consultation papers (“CPs”) relating to:
- Ancillary Vehicle Rules;
- Replacement of the current Fiduciary Rules, 2020 with the Fiduciary Rules, 2021; and
- Issuing of new statutory instruments relating to the New and Amended Laws covering the investment, insurance, fiduciary and banking sectors.
The GFSC is seeking feedback from all interested parties in order to ensure that the New and Amended Laws regime is practicable for firms in order to achieve successful implementation.
The new statutory instruments, concluding the Revision of Laws Project, will impact all firms across the financial services industry, so ensuring your views are represented is key. The consultations close on 17 June 2021 and can be found here GFSC - Consultation Hub.
Skilled Person Reviews – a reminder
The New and Amended Laws put a statutory footing around the use of Skilled Persons Reviews, which will bring greater clarity on how and why the GFSC uses third parties to assess firms at a supervisory, rather than enforcement level.
Specifically, the GFSC may require a Skilled Persons Review if it considers it necessary or desirable to do so either in the interests of the public or the reputation of the Bailiwick as a financial centre, or for the purpose of the performance of its functions. Furthermore, Skilled Persons Reviews may be in respect of not only the firm but also individuals who hold supervised roles such as directors and MLCO/MLROs.
The team are already seeing an increase in the use of Skilled Persons Reviews requested by the GFSC, prior to the Ordinance bringing these laws into effect. The use of independent reviews can demonstrate effective remediation of a project and root cause of an issue. Independent reviews can be commissioned prior to the commencement of GFSC risk mitigation programmes to evidence a proactive approach by the registered person.
New sanctions regime – review your client base
The GFSC advised on 29 April 2021 that a new sanctions regime has been implemented – The Sanctions (Implementation of UK Regimes) (Bailiwick of Guernsey) (Brexit) (Amendment - Global Anti-Corruption) Regulations, 2021 (“The Sanctions Regulations”). This follows implementation by the UK of a new sanctions regime (The Global Anti-Corruption Sanctions Regulations 2021) targeting individuals involved in serious corruption. 22 individuals have been designated under the regime, none of whom were previously designated under UK sanctions regimes.
Guernsey firms must immediately review their client base to ensure they do not have any accounts or any kind of relationship with any of the designated individuals. If so, any funds, other assets or economic resources must be frozen with immediate effect and reported to the Policy & Resources Committee immediately to ensure compliance with the obligations at section 14 of the Sanctions (Bailiwick of Guernsey) Law, 2018.
The implementation of this new sanctions regime stresses the importance of firms having robust controls and monitoring systems in place to be able to identify, immediately, connections to the ever-changing list of sanctioned individuals and countries. Transaction monitoring and screening for sanctioned individuals is also becoming an increased focus of the GFSC.
AML Handbook – deadlines are looming
With the deadline for firms to review all high-risk customer relationships having now passed, the next date looming is for all remaining relationships to be reviewed by 31 December 2021. Given that this will represent the large majority of the customer base for most firms, this is no small undertaking.
One way that firms are addressing this task is through the use of contracting staff on a temporary basis to assist with the backlog of their client file reviews. This is a useful tool in assisting the process and can also remove the risks associated with completing the remediation in-house, where there might be reliance on assumed knowledge rather than what is documented and evidenced in records. However, firms should ensure that the staff engaged for this are suitably skilled and experienced in these types of reviews in order that they do not expose themselves to further risk and comply with legal screening requirements.
More information on EY’s Channel Islands Extended Assurance team service line offerings and the support they can provide can be found here.
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This news release has been issued by EY Channel Islands.