Consultation Paper on Proposals to Create a Single Fiduciary Handbook (September 2019)

Summary

This is the September 2019 consultation paper in which the Guernsey Financial Services Commission (GFSC) proposed to consolidate the various rulebooks applying to licensed fiduciaries into a single Fiduciary Handbook (later titled the Fiduciary Rules and Guidance, 2020). The version of the document reviewed also incorporates the Commission's subsequent feedback statement (February 2020) summarising consultation responses and the resulting final Rules, which were appended in draft form to the original paper.

• Consolidation: The proposal replaces six existing instruments (the CSP, FSP, TSP and Company Directors Codes of Practice, the Regulation of Fiduciaries (Accounts) Rules 2001, the Financial Resources Requirements Rules 2018, and Rules 1 to 9 of the Pension Licensees Conduct of Business Rules) with one consolidated set of Rules and Guidance.
• Scope: Covers corporate governance and effective management, conduct of business (including client money, terms of business, complaints handling), prudential requirements (insurance and financial resources), cooperation with the Commission, and record keeping.
• Key policy changes noted in the feedback statement: Client money rules were clarified (pooled accounts, risk based reconciliation), a minimum six year record retention period was introduced, an outsourcing definition and contingency planning guidance were added, data breach notification triggers were recalibrated, and complaints handling rules were simplified.
• Pensions: Conduct of business elements of the Pension Rules are to be folded into the new Handbook, with a separate concurrent consultation covering pension specific requirements.

The consultation itself closed on 7 November 2019. According to the appended feedback statement, the Commission finalised the Rules (cited as The Fiduciary Rules 2020) to come into operation on 31 December 2020, with licensees given until 1 January 2021 to achieve full compliance, and required to complete amendments to internal controls by 31 December 2020.

Key obligations

• Interested parties wishing to comment on the proposals needed to respond before the consultation closing date of 7 November 2019
• Licensees must complete amendments to their internal controls to ensure compliance with the finalised Fiduciary Rules by 31 December 2020
• Licensees must comply with the provisions of the new Fiduciary Rules and Guidance from 1 January 2021
• Licensed fiduciaries must maintain records for a minimum retention period of six years, or longer where required by applicable law
• Full fiduciary licensees must continue to comply with the Financial Resource Requirement Rules (now consolidated into the new Rules)
• Licensees must maintain a breaches register logging all instances of non-compliance with the Rules
• Licensees must ensure clients are informed of the terms of business

Applies to

Licensed fiduciaries, Corporate Service Providers (CSP), Trust Service Providers (TSP), Foundation Service Providers (FSP), Company Directors, Pension Service Providers (PSP), full fiduciary licensees, personal fiduciary licensees

Deadlines

• 7 November 2019: Closing date for responses to the Consultation Paper
• 31 December 2020: Fiduciary Rules 2020 come into operation; licensees must complete internal control amendments to ensure compliance by this date
• 1 January 2021: Date from which licensees are required to comply with the provisions of the new Fiduciary Rules and Guidance, per the feedback statement