Banking Supervision (Annual Compliance Return) Rules and Guidance, 2021

Summary

These Rules and Guidance, made under section 40 of the Banking Supervision (Bailiwick of Guernsey) Law, 2020, set out what banking licensees must cover in their Annual Review and Annual Compliance Form submitted to the Guernsey Financial Services Commission. They apply to all banking licensees, including branches and subsidiaries, and detail the substantive areas to be reviewed, the statements to be completed, and submission deadlines.

• Annual Review scope: Licensees must review loan/asset classification and provisioning, control systems, financial record keeping and data systems, business activity oversight, Board responsibilities and conduct (against the Finance Sector Code of Corporate Governance), risk management, and the control environment, and report exceptions where shortcomings are found.
• Statement B: Licensees must confirm compliance with standard and additional licence conditions imposed by the Commission, disclosing any non-compliance, its cause, duration and remedial steps.
• Statement C: Licensees must confirm compliance with the requirement to undertake liquidity stress testing.
• Statement D: The Board must review the ICAAP at least once per financial year and confirm that regulatory capital remains adequate and compliant with Commission guidance.
• Annual Compliance Form: All licensees must complete and return the Annual Compliance Form (covering Statements A to D and the Corporate Governance Statement) within set timeframes tied to their financial year or group accounts publication.
• Immediate notification: Licensees must notify the Commission immediately on discovering deficiencies in any area covered by the Annual Compliance Form, including proposed remedial steps and supporting evidence on request.

The Rules came into force on 1 November 2021 and apply to all banking licensees unless the Commission grants a specific exclusion or modification.

Key obligations

• Licensees must ensure the Annual Review covers loans/asset classification/loss provisioning, control systems, financial record keeping and data systems, business activity oversight, Board responsibilities and conduct, risk management, and the control environment.
• Licensees must identify individuals employed within the Bailiwick who are responsible for risk management.
• Licensees must complete Statement B confirming compliance with standard and additional licence conditions, disclosing any non-compliance details in the Exceptions section.
• Licensees (as applicable) must complete Statement C confirming compliance with liquidity stress testing requirements.
• The Board must review the ICAAP at a minimum once per financial year and licensees must complete Statement D confirming the review and adequacy of capital.
• Every licensee must ensure the Annual Compliance Form (Statements A-D and Corporate Governance Statement) is correctly completed and returned to the Commission.
• Bailiwick-incorporated licensees must submit the Annual Compliance Form within three months of the end of the financial year it covers.
• Licensees not incorporated in the Bailiwick must submit the Annual Compliance Form within one month from publication of the audited accounts of the main group.
• A licensee must notify the Commission immediately upon discovering deficiencies in any area covered by the Annual Compliance Form, including proposed remedial steps, and provide supporting evidence on request.

Applies to

banking licensees, banks incorporated in the Bailiwick, branches, subsidiaries

Deadlines

• within three months of the end of the financial year: Annual Compliance Form submission deadline for licensees incorporated in the Bailiwick.
• within one month from the publication of the audited accounts of the main group: Annual Compliance Form submission deadline for licensees not incorporated in the Bailiwick.
• at a minimum once per financial year: Required frequency of the Board's review of the ICAAP.
• 1st November 2021: Commencement date of the Rules.
• immediately: Licensees must notify the Commission on discovery of deficiencies covered by the Annual Compliance Form.

Related documents

• This document is made under Banking Supervision (Bailiwick of Guernsey) Law, 2020