banking

Who is caught

Banking regulation in the Bailiwick of Guernsey centres on the Banking Supervision (Bailiwick of Guernsey) Law, 2020, which prohibits accepting deposits in the course of deposit-taking business without a banking licence granted by the Guernsey Financial Services Commission. Holding a banking licence is the trigger that brings an institution within the wider framework of rules, codes and reporting obligations administered by the Commission.

• Deposit-taking business: Any person carrying on deposit-taking business in the Bailiwick must hold a banking licence; applicants must supply prescribed statements, information, documents and fees (Banking Supervision Law, 2020).
• Licensed institutions: Ongoing rules distinguish banks incorporated within the Bailiwick from branches of banks incorporated outside it, with different accounts and reporting treatment (Accounts, Disclosure and Reporting Rules, 2021; BSL/2 guidance).
• Deposit compensation participants: Every holder of a Guernsey banking licence is automatically a participant in the Guernsey Banking Deposit Compensation Scheme (Deposit Compensation Scheme Ordinance, 2008).
• Payment service providers: The Transfer of Funds Ordinances for Guernsey, Alderney and Sark apply to payment service providers and intermediary payment service providers operating in or from the Bailiwick, using Banking Law investigatory powers.
• Enforcement reach: The Financial Services Business (Enforcement Powers) Law, 2020 applies to licensed banking institutions alongside other regulated sectors, including applicants and former licensees.
• Codes and guidance: The Code of Practice for Banks and the Finance Sector Code of Corporate Governance apply to banks licensed under the Banking Supervision Law, 2020.

Note that the Borrowing (Control) (Bailiwick of Guernsey) Law, 1946 is enabling legislation only, and the summary records that the operative Ordinance made under it was repealed in 2013, so its transaction controls do not currently appear to be in force.

Sources: Banking Supervision (Bailiwick of Guernsey) Law, 2020 · Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Banking Deposit Compensation Scheme (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated text) · Borrowing (Control) (Bailiwick of Guernsey) Law, 1946 · Financial Services Commission (Site Visits) (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated Text) · Transfer of Funds (Alderney) Ordinance, 2017 · Transfer of Funds (Guernsey) Ordinance, 2017 · Transfer of Funds (Sark) Ordinance, 2017 · Banking Supervision (Accounts, Disclosure and Reporting) Rules and Guidance, 2021 · Code of Practice for Banks · Finance Sector Code of Corporate Governance (Amended February 2026) · BSL2 General Guidance

Key duties

Licensed banks carry a layered set of continuing prudential, reporting, governance and notification obligations. The obligations that recur most and carry the clearest deadlines are the periodic prudential and financial-crime returns and the annual accounts and compliance filings.

Periodic returns

• Prudential BSL/2: Banks must submit the BSL/2 prudential return quarterly via the online portal, no later than close of business 28 calendar days after the reporting date, with modules varying between subsidiaries and branches; the Monetary Aggregates return (MA/1) is completed monthly.
• Liquidity returns: Guernsey-incorporated banks must submit a monthly LCR return and maintain an LCR of 100% or above at all times (or, where approved, an LMR above 100%), with breaches reported immediately; the NSFR is reported as a monitoring item.
• Large exposures: Banks must report large exposures to the Commission, including prior notification before certain new large exposures, quarterly notification, and reporting of any breach of limits (Large Exposure Rules, 2021).
• Financial Flows Return: Licensed banks (and Non-Bank Money Service Providers) must file the quarterly Financial Flows Return (Form 153) within two months of quarter end, including nil returns.
• Financial crime returns: Banking licensees must file an annual Financial Crime Risk Return for 1 July to 30 June by 31 October, plus the quarterly Financial Flows Return (Financial Crime Returns Rules, 2025 and 2026).

Accounts and annual compliance

• Audited accounts: Bailiwick-incorporated banks must prepare accounts on an approved standard and submit audited accounts, the auditor's report and any management letter within three months of completion; branches must provide the main group's audited accounts within one month of publication.
• Public disclosure: Bailiwick-incorporated licensees must publish online and make available on request their audited accounts and key metrics (CET1 CAR, LCR/LMR, Leverage Ratio, and NSFR once required) within one month of submitting accounts to the Commission.
• Annual Compliance Form: Licensees must complete the Annual Review and Annual Compliance Form (Statements A to D and a Corporate Governance Statement), filed within three months of financial year end for Bailiwick-incorporated banks or within one month of group accounts publication for others.
• Auditor reporting: Bank auditors must annually examine the BSL/2 returns and report to the Commission normally within two months, and escalate material errors or omissions themselves if management does not act.

Governance and notifications

• Deposit compensation: Licence holders must participate in the Deposit Compensation Scheme and pay annual fees, insurance levies and compensation levies; withdrawal is only possible after licence revocation or surrender with at least six months' written notice.
• Supervised role notifications: Licensees must notify the Commission of holders of, and changes or objections to, approved and vetted supervised roles, and of acquisitions or reductions of voting power; individuals in supervised roles must meet the Fit and Proper standard on appointment and on an ongoing basis.
• Cyber security: Licensees must identify assets and risks, maintain protective, detective and recovery controls under Board oversight, and notify the Commission as soon as reasonably practicable of significant cyber security events.
• Open dealing: Licensees must deal with the Commission in an open and co-operative manner and keep it promptly informed of anything that ought reasonably to be disclosed (Enforcement Powers Law, 2020).
• Deposit advertising: Any person other than a licensed institution wishing to advertise deposits in the Bailiwick must obtain prior written permission from the Commission, and all deposit advertisements must conform to the Association of Guernsey Banks' Code of Conduct.
• Capital and risk: Licensees must maintain minimum capital requirements, review the ICAAP at least annually, conduct liquidity stress testing, and maintain a Board-ratified Liquidity Management Policy reviewed annually.
• Annual fees: Firms licensed or registered on 1 January are liable for an annual fee, payable by the stated deadline to avoid a late payment penalty under the Administrative Financial Penalties Regulations, 2022.

Sources: Banking Supervision (Bailiwick of Guernsey) Law, 2020 · Banking Deposit Compensation Scheme (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated text) · Banking Supervision (Accounts, Disclosure and Reporting) Rules and Guidance, 2021 · Banking Supervision (Annual Compliance Return) Rules and Guidance, 2021 · Banking Supervision (Deposit Advertisements and Communications to the Commission) Rules, 2021 · Banking Supervision (Large Exposure) Rules and Guidance, 2021 · Cyber Security Rules and Guidance, 2021 · Financial Crime Returns Rules, 2025 · Code of Practice for Banks · FAQ on Annual Fees · Financial Flows Return (Form 153) Guidance · Fit and Proper Persons - Meeting the Criteria (February 2024) · Guidance Note on Bank Auditors' Reports on Guernsey Financial Services Commission Returns Used for Prudential Purposes · Guidance on Liquidity Risk Management (2017, reissued November 2021) · BSL2 General Guidance · Financial Crime Returns Rules, 2026

Exemptions and carve-outs

The framework provides exemptions from the deposit-taking prohibition, carve-outs from particular rules, and a general Commission discretion to modify application for individual licensees.

Deposit-taking exemptions

• Exempt transactions: Deposits accepted by charities (from other charities, or interest or premium free), industrial and provident societies (withdrawable share capital), advocates and solicitors acting under their professional accounts rules, and social, cultural or recreational clubs from members are exempt from the deposit-taking prohibition (1994 Regulations).
• Named exempt person: The Channel Islands Co-Operative Society Limited is an exempt person for deposits from members, subject to conditions including a combined share capital and loan exposure cap of 20,000 pounds per member.
• Schedule 1 exempt persons: The Banking Supervision Law, 2020 provides for exempted persons under Schedule 1; a person relying on an exemption must give the Commission written notice within 14 days of becoming aware that circumstances have changed so the exemption no longer applies.

Other carve-outs

• Incorporated cell companies: Licensed banks are excepted from the expanded prescription allowing companies to become or convert into incorporated cell companies, so they cannot use that route (Prescribed Classes Regulations, 2021).
• Financial crime returns: Certain categories are excluded from the Financial Crime Returns Rules altogether (for example personal fiduciary licence holders and general-insurance-only licensees), and bureau de change and cheque cashing are excluded from the Financial Flows Return.
• Commission discretion: Across the accounts, annual compliance, large exposure, cyber security and other rules, the Commission may by written notice exclude or modify the application of any provision for a specific licensee, and derogations from the accounts timeline require its prior written consent.
• Qualifying deposits: The Deposit Compensation Scheme defines which deposits qualify for compensation and excludes deposits linked to proceeds of crime, drug trafficking, terrorism or forfeiture convictions.

Sources: Banking Supervision (Bailiwick of Guernsey) Law, 2020 · Banking Deposit Compensation Scheme (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated text) · Banking Supervision (Bailiwick of Guernsey) Regulations, 1994 · Companies (Incorporated Cell Companies) (Prescribed Classes) Regulations, 2021 · Banking Supervision (Accounts, Disclosure and Reporting) Rules and Guidance, 2021 · Banking Supervision (Annual Compliance Return) Rules and Guidance, 2021 · Banking Supervision (Large Exposure) Rules and Guidance, 2021 · Cyber Security Rules and Guidance, 2021 · Financial Crime Returns Rules, 2025 · Financial Crime Returns Rules, 2026

Enforcement and penalties

Enforcement is centralised in the Commission's supervisory toolkit, supplemented by specific criminal offences in the individual instruments. The Financial Services Business (Enforcement Powers) Law, 2020 is the principal source of enforcement powers over licensed banks.

• Commission enforcement powers: The Enforcement Powers Law, 2020 allows the Commission to gather information, appoint inspectors, impose enforcement requirements, object to holders of supervised roles, suspend or revoke licences, make prohibition and disqualification orders, and impose discretionary and administrative financial penalties, public statements and reprimands.
• Banking Law offences: Under the Banking Supervision Law, 2020, contravention of the licensing prohibition, providing false information and related breaches are criminal offences, with liability extended to directors and unincorporated bodies in certain cases.
• Site visit offences: Obstructing or failing to comply with site visit requirements, making false or misleading statements, or falsifying, concealing or destroying relevant documents are offences punishable on summary conviction by up to 6 months' imprisonment and/or a level 5 fine, or on indictment by up to 2 years' imprisonment and/or a fine (Site Visits Ordinance, 2008).
• Transfer of funds offences: Contravening the modified EU Regulation, obstructing officials, unlawful disclosure or providing false information under the Transfer of Funds Ordinances are offences punishable on indictment by up to five years' imprisonment and/or a fine, or lesser penalties on summary conviction, with personal liability for directors and officers where consent, connivance or neglect is shown.
• Administrative financial penalties: Late or inaccurate Financial Flows Return submissions fall within scope of administrative financial penalties, and late payment of annual fees may incur a penalty under the Administrative Financial Penalties (Bailiwick of Guernsey) Regulations, 2022.
• Compensation scheme appeals: Participants dissatisfied with a Deposit Compensation Board decision may appeal to the Court on grounds including error of law, unreasonableness, bad faith, disproportionality or material factual or procedural error.

The Code of Practice for Banks and the Finance Sector Code of Corporate Governance are not themselves statements of law; non-compliance does not automatically trigger sanctions, but the Commission and the courts may take breaches into account when making decisions about a bank.

Sources: Banking Supervision (Bailiwick of Guernsey) Law, 2020 · Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Banking Deposit Compensation Scheme (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated text) · Financial Services Commission (Site Visits) (Bailiwick of Guernsey) Ordinance, 2008 (Consolidated Text) · Transfer of Funds (Alderney) Ordinance, 2017 · Transfer of Funds (Guernsey) Ordinance, 2017 · Transfer of Funds (Sark) Ordinance, 2017 · Code of Practice for Banks · Finance Sector Code of Corporate Governance (Amended February 2026) · FAQ on Annual Fees · Financial Flows Return (Form 153) Guidance