Discussion Paper on Proposals to Create a Single Fiduciary Handbook and Revise Pension Rules (2019-03-05)

Summary

This is a discussion paper issued by the Guernsey Financial Services Commission seeking industry feedback on proposals to consolidate the existing Codes of Practice for fiduciary businesses into a single Fiduciary Handbook, and to revise the Pension Rules issued in 2017. It is a consultative working document, not a final rule change, and asks a series of numbered questions for respondents to answer.

• Single Fiduciary Handbook: Proposes repealing the current Codes of Practice for Corporate Service Providers, Trust Service Providers and Foundation Service Providers and replacing them with one consolidated Handbook aligned with the GIFCS Standard on Trust and Corporate Service Providers.
• Pension services providers: Proposes repealing Chapters 2 to 9 (Conduct of Business) of the Pension Rules and absorbing equivalent requirements into the new Fiduciary Handbook, removing the current two tier regime; revised Pension Rules based on Chapter 10 would also be issued.
• Personal Fiduciary Licensees (PFLs): The Handbook would apply to both Full Fiduciary Licensees and PFLs, except that PFLs acting only as directors would remain under the Code of Practice for Company Directors.
• Client Money Rules: New rules would formalise segregation, reconciliation and control of client money held by licensed fiduciaries, moving toward GIFCS Standard E3 compliance.
• Outsourcing: New sector-specific outsourcing rules are proposed, with notification expected only for significant outsourcing arrangements and no supervisory approval required for sub-outsourcing.
• Terms of Business: Proposed revised rules would require written terms of business covering services, fees, exit fees, complaints handling and termination notice, extended to cover licensees carrying on trust business.
• Other areas: The Handbook would also address employee screening and training, conflicts of interest, record keeping, complaints, financial resources and insurance arrangements.
• Pension Rules feedback: Part 2 responds to industry feedback on the 2017 Pension Rules, mostly clarifying drafting and definitions (e.g. Appropriate Financial Adviser, occupational pension scheme, material scheme information, notification of key scheme details) without fundamental policy change.

No changes take effect from this paper itself; the Commission states that until new Pension Rules come into force, licensees must continue to comply with the current Pension Rules. Feedback received will inform a more detailed Consultation Paper and draft revised Pension Rules to be issued later.

Key obligations

• Responses to the Discussion Paper should be submitted by 30 April 2019 via the Commission's Consultation Hub
• Until new Pension Rules come into force, licensees must continue to comply with the current Pension Rules (No. 2 2017)

Applies to

Full Fiduciary Licensees (FFLs), Personal Fiduciary Licensees (PFLs), Corporate Service Providers, Trust Service Providers, Foundation Service Providers, Pension services providers/pension licensees

Deadlines

• 30 April 2019: Closing date for responses/feedback on the Discussion Paper
• 30 September 2018: End of the transitional period for compliance with the current Pension Rules (already passed at time of this paper, noted for context)