GFSC v Y - Judgment of the Court (2019-06-18)

Summary

This is a Guernsey Court of Appeal (Civil Division) judgment in an appeal and cross-appeal arising from GFSC enforcement action against an individual (anonymised as Y). It examines the scope of the GFSC's statutory powers to make prohibition orders, disapply director exemptions, impose fines, and issue public statements against persons found unfit to perform regulated activities.

Y, an accountant and former executive director of a GFSC-licensed fiduciary firm, had formed a dozen Guernsey companies for clients and advertised company formation services through his own accounting business without holding a licence under the Regulation of Fiduciaries, Administration Businesses and Company Directors etc Law, 2000. The GFSC's Final Notice found he had contravened that Law, was not fit and proper, and imposed a 4 year prohibition order, a 4 year removal of the paragraph (g) director exemption, a 13,000 pound fine, and a public statement. The Royal Court set aside the prohibition and exemption orders (holding such orders could not be time limited), upheld the fine, and required the public statement to be revised. The GFSC appealed the time limiting point; Y cross appealed the fitness findings and sanctions.

• Issue on appeal: Whether prohibition orders and exemption disapplications under the Fiduciaries Law (and equivalent provisions in the Insurance Managers and Insurance Intermediaries Law, Insurance Business Law, Banking Supervision Law and Protection of Investors Law) must always be indefinite, or may be limited to a fixed period.
• Cross-appeal issue: Whether Y should have been found to have contravened the Fiduciaries Law and to be unfit or so unfit as to justify the fine and other sanctions imposed by the GFSC.
• Orders under review: A Prohibition Order (restricting regulated functions), an Exemption Order (removing the section 3(1)(g) director exemption), a fine of 13,000 pounds, and a public Statement Order.

As a judicial decision interpreting the GFSC's enforcement powers, this document does not itself create new ongoing compliance obligations for regulated firms; it is a precedent clarifying how prohibition orders, exemption removals, fines and public statements may be structured and challenged under the Regulatory Laws.

Applies to

individuals performing regulated activities under the Fiduciaries Law, licensed fiduciaries, company directors relying on the paragraph (g) exemption, persons subject to GFSC enforcement under the FSC Law, Fiduciaries Law, IMII Law, Insurance Business Law, Banking Supervision Law and Protection of Investors Law