Protected Cell Company (PCC) as Pension Service Provider (PSP) - Consultation Feedback (2024-12-17)

Summary

This is the Guernsey Financial Services Commission's feedback paper on its September 2024 consultation proposing that licensed Pension Service Providers (PSPs) be permitted to form as Protected Cell Companies (PCCs). All respondents, including the pensions industry body, supported the proposal. The Commission confirms it has made Regulations prescribing pension and gratuity service providers as a new class of company eligible to be formed as a PCC under section 437(1) of The Companies (Guernsey) Law, 2008, effective 20 December 2024.

• Cell use restriction: A licensed PSP formed as a PCC will be subject to a standard licence condition restricting use of its cells solely to holding and segregating pension scheme assets, in addition to standard fiduciary licence conditions.
• Prudential treatment: The financial resources rules (Rule 4.2 of the Fiduciary Rules and Guidance, 2021) apply at the PCC Core if the licensed PCC holds a primary fiduciary licence; if it holds a secondary fiduciary licence, section 4.2 of the Fiduciary Rules does not apply, consistent with treatment of other secondary licensees.
• Scope confirmed: The new eligible class covers regulated activity under section 2(1)(e) of the Fiduciaries Law, which includes both pension schemes and gratuity schemes.
• No wider expansion: The change does not extend PCC eligibility to any other non-pension fiduciary activity.

The substantive change takes legal effect through Regulations issued by the Commission, which came into force on 20 December 2024, rather than through amendment of the Companies Law itself.

Key obligations

• A licensed PSP formed as a PCC must comply with a licence condition restricting use of its cells solely for holding and segregating pension scheme (including gratuity scheme) assets
• A licensed PCC acting as a PSP must meet the minimum licensing criteria under Schedule 1 of the Fiduciaries Law and comply with all applicable fiduciary laws, rules and guidance
• A licensed PCC holding a primary fiduciary licence must satisfy the FRR Rules (Rule 4.2) at the PCC Core level
• A licensed PCC holding a secondary fiduciary licence is exempt from the FRR Rules (section 4.2), consistent with treatment of other secondary licensees

Applies to

Pension Service Providers (PSPs), licensed fiduciaries carrying out pension or gratuity activity, Protected Cell Companies (PCCs)

Deadlines

• 20 December 2024: Regulations prescribing pension and gratuity service providers as a new class of company eligible to be formed as a PCC come into effect
• 11 November 2024: Closing date for responses to the original consultation paper (already passed)