Principles of Conduct of Finance Business

Summary

This document sets out ten high-level Principles of Conduct of Finance Business issued by the Guernsey Financial Services Commission. It establishes the standards of behaviour expected of financial institutions in their dealings with customers, counterparties and the Commission itself, rather than prescriptive rules with detailed procedures.

• Integrity: Observe high standards of integrity and fair dealing in conducting business.
• Skill, care and diligence: Act with due skill, care and diligence towards customers and counterparties.
• Conflicts of interest: Avoid conflicts of interest or manage them fairly through disclosure, confidentiality rules, declining to act, or other means; not unfairly place own interests above customers.
• Information about customers: Seek relevant information about customers' circumstances and investment objectives when advising or exercising discretion.
• Customer assets: Arrange proper protection of customer assets under its control, including segregation and identification, consistent with responsibilities accepted.
• Market practice: Observe high standards of market conduct and comply with any Commission-issued or approved codes of standards.
• Financial resources: Maintain adequate financial resources to meet business commitments and withstand relevant risks.
• Internal organisation: Organise and control internal affairs responsibly, keep proper records, and ensure staff are suitable, trained, supervised, with well-defined compliance procedures.
• Information for customers: Give customers comprehensible, timely information to make informed decisions, and provide a full and fair account of services performed.
• Relations with the Commission: Deal with the Commission openly and co-operatively, promptly disclosing matters that might reasonably be expected to be disclosed.

These principles function as overarching conduct standards rather than detailed rules; no specific deadlines, fees, or transitional arrangements are set out in the text itself.

Key obligations

• Observe high standards of integrity and fair dealing in business conduct
• Act with due skill, care and diligence towards customers and counterparties
• Avoid or fairly manage conflicts of interest, including through disclosure or declining to act
• Obtain relevant information about customers' circumstances and investment objectives before advising or exercising discretion
• Provide proper protection (e.g. segregation and identification) for customer assets under the institution's control
• Observe high standards of market conduct and comply with applicable Commission-issued codes of standards
• Maintain adequate financial resources to meet commitments and withstand business risks
• Maintain proper internal organisation, records, staff training, supervision and compliance procedures
• Give customers comprehensible, timely information to support informed decisions and account for services provided
• Deal openly and co-operatively with the Commission and promptly disclose matters reasonably expected to be disclosed

Applies to

financial institutions