Discussion Paper on Proposals to Revise the Bailiwick's Financial Regulatory Infrastructure for Lending, Credit & Finance (2016-08-26)

Summary

This is a Discussion Paper issued by the Guernsey Financial Services Commission seeking industry feedback on proposals to overhaul the regulatory regime for lending, credit and finance (LCF) activity in the Bailiwick. It proposes repealing the Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008 (NRFSB Law) and replacing it with a new Lending, Credit and Finance Law that would introduce consumer credit protections alongside existing AML/CFT and authorisation requirements.

• Category 1 LCF Licence: Applies to firms lending or providing credit facilities to retail clients, including Bailiwick individuals; must comply fully with new consumer credit controls and measures.
• Category 2 LCF Limited Licence: Applies to firms whose activities are connected to lending/credit/finance, including innovative financial service businesses with an institutional focus; permitted derogation from some controls.
• Category 3 LCF Registration: Applies to firms not involved in lending, credit or finance but required to register for AML/CFT purposes.
• Risk based exemptions / not required to register: Certain low risk activities may be excluded entirely from the new regime.
• Proposed substantive controls: Affordability checks on borrowers, clear and fair information disclosure, restrictions on misleading financial promotions/advertising, and coverage of innovative lending models such as crowdfunding and peer to peer lending.

The paper is explicitly a working document that does not prejudge any final decision by the Commission or the States of Guernsey; it is intended to inform a later, more detailed Consultation Paper. It does not itself create binding legal obligations but invites feedback from a wide range of stakeholders, including existing NRFSB registrants, banks, insurers, investment firms, fiduciaries, FinTech and lending platform operators, consumer bodies, and prescribed businesses.

Key obligations

• Interested parties wishing to respond must submit feedback on the Discussion Paper's proposals by Monday 24 October 2016, via the Citizen Space online portal or in writing to the Commission.

Applies to

Non-Regulated Financial Services Businesses (NRFSBs), Lending, Credit & Finance businesses, Banks, Insurance companies, Investment companies, Fund managers, Fiduciaries, FinTech / innovative financial service businesses, Prescribed businesses (legal professionals, accountants, estate agents), Consumer bodies and industry associations

Deadlines

• Monday 24 October 2016: Deadline for responses to the Discussion Paper on proposed changes to the Bailiwick's lending, credit and finance regulatory framework.