Policy Framework FAQs
07 December 2018
States of Guernsey/Guernsey Finance
Financial Services Policy Framework FAQs
What is the financial services policy framework?
The financial services policy framework is an update of Guernsey’s strategy for financial services development, the first real overview for 10 years. It forms part of the Committee for Economic Development’s Economic Development Strategy, published earlier this year.
What is being planned?
The policy framework sets out our strategic approach to long-term prosperity, our ambitions for the financial services sector, our competitive offer, our priorities, the market position that we will seek to achieve, and the principles guiding our approach. It is positive, ambitious, and, importantly, achievable.
Why do we need to change?
In globally uncertain times, Guernsey continues to be a rock of stability and security. But global attitudes and changing patterns within markets combine to create a fundamental need to continually develop, adapt and re-orientate to meet the changing demands of a sophisticated global client base.
Is finance in Guernsey heading in a new direction?
We are seeking to strengthen our position in global finance. Growing our global specialisms is about positioning, principles and priorities. Beyond that, key to our success as a specialist global finance centre is the need to sustain and maintain our core, and to have a supportive environment for existing businesses to grow.
So what is new?
The strategy is all about adjacent growth – building on our existing capabilities to secure more business in a similar direction. We intend to deliberately tread similar paths which have led to our greatest successes. The longer-term aim is to create areas of competitive advantage and market leadership. We are looking for the opportunity to develop leadership positions, particularly where the flexibility of our regulatory and leadership regime supports developing such an opportunity, and particularly those areas where the market places high reliance on breadth and depth of expertise, and sophistication of service.
What are our core strengths in financial services today?
Responsible global citizen, engaging with and meeting global standards
Collaboration – industry, government and regulator all work together
Substance – a mature and diversified finance sector, underpinned by real substance and real activities
Specialist – specialist firms providing services to a sophisticated global client base
What are we looking to achieve?
Our common purpose is to ensure that Guernsey maintains its position as a leading specialist finance centre, with a growing focus on private wealth and capital services.
Where does support from the States come in?
The objectives and purpose of the framework are to:
Ensure commitment to the financial services sector is fully recognised
Ensure sufficient resources are deployed to support strategic goals
Ensure effective co-ordination between government, industry and regulator
Achieve employment, productivity and output growth of the sector
At home, we need to agree how much economic risk Guernsey wishes to take; ensure the population management policy supports our skills needs; implement a long-term skills development plan; strengthen transport and digital connectivity; and implement a telecoms sector strategy.
What is Guernsey Finance’s role?
The framework should help with more effective representation and promotion of Guernsey internationally as a specialist global finance centre.
What is the Guernsey Financial Services Commission’s role?
Regulation is a critical component of our competitive offer. Our regulatory approach has, and will continue to have, regard for the competitiveness of the Guernsey economy. Regulation will also continue to meet international standards, enable competition and innovation in financial services, and recognise the economic importance of financial services to the Guernsey economy.
Does it matter how Guernsey is seen outside the island?
Guernsey is a respected global citizen with a distinguished record of compliance and commitment to global standards relating to tax transparency. We have long been enthusiastic to comply with global standards which helps us to become stronger and more robust. Our three international economic objectives are to support global finance and growth; maintain simplicity and fiscal neutrality for clients; and adherence to global standards.
SPECIFIC DEVELOPMENT AREAS
Guernsey will look to develop electronic AML and customer due diligence and look to exploit developments to date in distributed ledger technology (blockchain).
Our strategy is to lead the way in the creation of a robust, efficient technology landscape that provides a safe, secure and efficient environment for the provision of specialist global financial services post-2020.
The mission is to be the forefront of the development of green and sustainable finance and to be a true leader in the field. The Guernsey Green Finance initiative and brand will be developed to build the island’s position as a leading green and sustainable finance centre.
Earlier in 2018 we launched the Guernsey Green Fund, the world’s first regulated green investment fund product. We have secured membership of the United Nations’ Financial Centres for Sustainability network and will develop our engagement to promote our offering and build on our leadership position.
Private capital and family office services
Guernsey has a long tradition of providing wealth management and fiduciary services to global high net worth individuals and their families. We believe that we can review our offer of sophisticated, discreet service of unrivalled depth and breadth to focus more deeply on services for private capital, private wealth and family office services.
The objective is for Guernsey to become front of mind among the global financial services community to provide specialist family office and private wealth services, while we hone our legal and regulatory approach to support the sector.
Wealth management and brokerage
For more than half a century Guernsey has developed an infrastructure of professional risk-management services and firms providing the capability required by the wealth and investment management and brokerage community.
Our objective in this market is to enhance the island’s competitive position in this area to be a potential location for managers seeking to develop a specialist spoke to London or New York operations.
Our objective is to become the domicile of choice for global multi-jurisdictional corporate pensions administration services for corporates across the UK, Asian and North American markets.
Build on the successful launch of the Private Investment Fund (PIF), and develop further niche products, particularly for the Far East and North American markets. Our aim is to become the natural home for sophisticated private capital and funds for global clients seeking specialism and the security and stability that Guernsey provides.
Guernsey’s insurance industry is a clear leader in Europe and has several niche leadership positions in global markets. We have identified opportunities to develop insurance-linked securities, where we will look to develop a true convergence capital regulatory product; the managing general agent model; pensions and longevity risk transfer; and the captive sector.
The days of global banking growth are behind us, but we remain welcoming to banks, particularly those seeking to provide private banking and corporate services to the fiduciary sector, and our focus on fintech development will enable the efficient exploitation of technology for banking services.
Improving our reach and connectivity in London is priority number one. Beyond that our focus is on the fast-growing pools of private capital in the Far East and North America. Our objectives include becoming the leading global specialist jurisdiction in private wealth and private capital space in the US; becoming the number one financial services trading partner for South Africa; and leveraging our long-term commitment to China to support the Chinese Belt and Road project.
The purpose of this policy Framework is to develop a sustainable future for Guernsey’s financial services sector, setting out a roadmap to ensure Guernsey’s finance sector continues to deliver growth for the next 10 years from 2020.
That future is as a global financial citizen; is green and sustainable finance; is growing our global specialisms. Success will be growing employment, a growing reputation, and a continuing role on the global financial stage.
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