Discussion Paper on the New Fiduciary Licence Categorisation (August 2020)

Summary

This is a 2020 GFSC discussion paper seeking feedback on how the new primary and secondary fiduciary licence categories, to be introduced under the 2020 Fiduciaries Law (draft at the time), should be defined and distinguished, particularly the meaning of actively trading for secondary licensees. It replaces the existing lead and joint licensee concepts under the fee regulations. It is a consultation only and does not itself impose binding requirements.

• Primary licence: Corresponds broadly to the current lead licensee; cannot have a corporate director on the board; no ownership restriction; may actively trade.
• Secondary licence: Corresponds broadly to the current joint licensee; may have or be a corporate director; may only be granted to a subsidiary or wholly owned entity of a primary licensee or its holding company; proposed to be prohibited from actively trading.
• Actively trading definition: Proposed to mean the charging or receipt of fees directly from third parties; the Commission asks whether respondents agree with this definition (Q1).
• Personal fiduciary licensees: Unchanged and not impacted by the 2020 Fiduciaries Law.
• Transition for lead licensees: Conversion to primary licence status is automatic; no action required.
• Transition for joint licensees: Conversion to secondary licence will require future rules, an agreement, and confirmation of qualification; no submission requested at this stage.

The Commission invites general comments on the proposals (Q2) and states it will use responses to inform a more detailed Consultation Paper to be issued later in 2020. Licensees anticipating difficulty complying with the 2020 Fiduciaries Law are asked to contact the Investment, Fiduciary and Pension Division.

Key obligations

• Existing full fiduciary licensees and interested parties are invited to submit comments on the proposed definition of actively trading and other proposals by the stated closing date
• Licensees anticipating difficulty complying with the 2020 Fiduciaries Law should contact the Commission's Investment, Fiduciary and Pension Division (ifpd@gfsc.gg)
• Licensees should consider the impact of the forthcoming changes and take necessary steps to ensure compliance if not already done so

Applies to

full fiduciary licensees (lead licensees), full fiduciary licensees (joint licensees), personal fiduciary licensees, corporate directors

Deadlines

• 5 October 2020: Closing date for responses/comments on the Discussion Paper