Lending, Credit & Finance Consultation Paper (July 2017)

Summary

This is a 2017 consultation paper (with an appended feedback statement dated Feb 2018) from the Guernsey Financial Services Commission proposing a new Lending, Credit & Finance (LCF) Law that would replace the Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law 2008. It sets out proposed licensing, conduct and consumer-protection rules for lending, credit and finance businesses operating in or from the Bailiwick, and for Bailiwick firms conducting such business elsewhere. The paper is a policy proposal only; no new law is yet in force, and the Commission indicates it will proceed via a Policy Letter to the States of Guernsey and eventual drafting of a Projet de Loi.

• Scope of proposed regulation: Firms providing lending, credit and finance products/services in or from the Bailiwick, and Bailiwick firms providing alternative financial services anywhere in the world, would become subject to licensing.
• Consumer protection focus: Proposals cover clear disclosure of loan terms, fees, charges, interest and APR, financial promotion controls, affordability/responsible lending assessments, and a possible right to cancel/cooling-off period.
• New business categories addressed: Class 1 alternative financial products and services, crowdfunding/P2P business models, and Class 3 consumer lending/credit/finance businesses, including regulation of Customer Due Diligence (CDD) platforms.
• Licensing and conduct: Draft minimum licensing criteria, a Regulated Activities Officer requirement (not necessarily Bailiwick-resident per feedback), and indicative Class 1 and Class 3 rules are set out in the appendices for comment.
• Feedback outcomes: Respondents were broadly supportive; the Commission noted proposed refinements including an appeals process for licence refusals, deemed compliance for firms already regulated in equivalent jurisdictions, and clarification of low-risk/out-of-scope activities.

The consultation closed on 15 September 2017 and the accompanying feedback statement (dated February 2018) summarises responses and next steps: the Commission intends to work with the Committee for Economic Development and Policy & Resources Committee toward a Policy Letter and eventual legislation (Projet de Loi) giving effect to the LCF Law. As a consultation and feedback document, it does not itself create binding legal obligations.

Applies to

lending, credit and finance businesses, consumer credit and finance firms, crowdfunding and peer-to-peer (P2P) platforms, Customer Due Diligence (CDD) platforms, non-regulated financial services businesses (NRFSBs), financial advisors, fintech businesses

Deadlines

• Monday, 15 September 2017: Deadline stated in the paper for submitting responses to the Lending, Credit & Finance Consultation Paper (consultation now closed).