The disruption caused by worldwide measures to contain the coronavirus (COVID-19) pandemic, including the transition to home working, is creating significant challenges for financial services businesses, and, in particular, their need to comply with strict regulatory obligations and deadlines. In light of this the Guernsey Financial Services Commission (GFSC) has issued a statement granting some welcome flexibility to enable Guernsey-licensed financial services firms to meet their regulatory obligations.
These measures seek to strike a balance between enabling firms to overcome general operational challenges, whilst still maintaining the high quality of regulation which supports Guernsey's reputation as a stable and reliable jurisdiction for financial services:
- Regulatory returns which would normally be audited may now be submitted in unaudited form, with audited versions to follow by the end of October 2020 (although this date may be extended further depending on the developing situation). This is a general policy change and replaces the previous statement that the GFSC would consider requests on a case-by-case basis.
- The filing deadline for financial returns for insurers, insurance intermediaries and managers, investment firms, funds and fiduciaries is extended by one month. This means that firms with a calendar year end may now submit their reports in unaudited form by the end of May 2020.
If any firm is unable to achieve these revised deadlines, it is advised to contact the GFSC and explain the issues that it is facing, the steps being taken to remediate those issues and when it expects to be able to submit the return.
A full list of the returns affected by the above policy change is set out in the GFSC statement.
In view of the possible increased need to appoint alternate directors at short notice for key board meetings, the GFSC will expedite the approval of appointments where the proposed alternate is already known to the GFSC 'as a director of the relevant licensee's Designated Administrator or Insurance Manager'. It should be noted that it is still necessary for the alternate to submit an Online Appointment as normal, but the GFSC should also be contacted direct to ensure that this is expedited.
The GFSC also reminds directors of licensed insurers that they do not require prior GFSC approval to be appointed as an alternate director of another licensed insurer.
Changes to Business Plans
The GFSC does not expect to be notified of changes to a licensee's business plan as a result of increased home working. However, if a licensee is experiencing difficulties with complying with its regulatory obligations it should consult with the GFSC at the earliest practical opportunity.
The formation of a Special Purpose Insurer Cell must now be notified within fourteen days (rather than the previous seven). The relaxation of this rule remains in place until the end of October 2020 (unless extended further).
Certain deadlines relating to Risk Mitigation Programmes have been extended, the full details of which are set out in the GFSC statement.
The GFSC is continuing to keep the situation under review in order to ensure that the provision of financial services in Guernsey can continue without interruption and ensuring that regulatory rules are appropriate for the circumstances. We discuss these matters with the GFSC on a regular basis and so if any licensee is encountering any particular issues please do get in touch.
Read the full Guernsey Financial Services Commission statement.
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