Engagement on the draft Banking Supervision (Bailiwick of Guernsey) Law, 2018 (2018-07-12)

Summary

This is the full text of the draft Banking Supervision (Bailiwick of Guernsey) Law, 2018 (a Projet de Loi), released by the Guernsey Financial Services Commission for engagement/consultation purposes. It would, if enacted, replace the existing banking supervision framework and comprehensively regulate deposit-taking business in the Bailiwick, covering licensing, conduct, supervision, information gathering, disclosure of information, compensation schemes, and offences.

• Licensing: Prohibits accepting deposits without a banking licence granted by the Commission; sets out application requirements, minimum licensing criteria (Schedule 2), and grounds for grant, refusal or surrender of licences.
• Supervised roles: Requires notification of and provides for Commission objection to holders of approved and vetted supervised roles, changes of role holders, and acquisition of additional voting power.
• Ongoing prudential requirements: Imposes minimum capital requirements, rules on annual returns and annual review, notification systems, large exposure reporting, and accounting/audit obligations, including auditor communications with the Commission.
• Information and enforcement powers: Gives the Commission powers to require information, appoint skilled persons, issue directions, and take disciplinary/appeal action, with associated offences and penalties (including director liability).
• Disclosure and compensation: Restricts disclosure of information obtained under the law (with permitted exceptions) and empowers establishment of a depositor compensation scheme.
• Fees and administration: Allows the Policy and Resources Committee to make regulations prescribing fees, exemptions, and other administrative and transitional matters, and sets rules for electronic submission of documents.

Because this is a draft law published for engagement rather than an enacted instrument, none of these provisions are yet legally binding; they represent the proposed replacement regime that licensed institutions and applicants should review and comment on before the law is finalised and brought into force.

Key obligations

• Under the draft law, a person must not accept deposits in the Bailiwick without a banking licence granted by the Commission.
• An applicant for a banking licence must apply in the form and manner required by the Commission and pay the prescribed fee.
• A person relying on an exemption must notify the Commission in writing within 14 days of becoming aware that the exemption no longer applies.
• An application for a banking licence is deemed withdrawn if required information is not provided within 3 months (or a longer specified period) plus 14 days after a further notice from the Commission.
• Licensed institutions would be required to notify the Commission of holders of approved and vetted supervised roles and of changes to those roles.
• Licensed institutions would be required to maintain minimum capital, submit annual returns and annual reviews, and make audited accounts available for inspection.
• Licensed institutions would be required to report large exposures to the Commission.
• Auditors of licensed institutions would be required to communicate certain matters to the Commission and attend meetings when requested.

Applies to

banks, licensed institutions, applicants for banking licences, holders of approved or vetted supervised roles, auditors of licensed institutions

Deadlines

• 14 days: Notice to the Commission required within 14 days of becoming aware that an exemption from the deposit-taking prohibition no longer applies.
• 3 months (or longer period specified by the Commission): Period within which an applicant must provide required information before an application for a banking licence is treated as deemed withdrawn.
• 14 days after notice: Further period after Commission notice of deemed withdrawal, after which an incomplete application is treated as withdrawn if information is still not provided.