securities investment business

Who is caught

The core instrument is the Protection of Investors (Bailiwick of Guernsey) Law, 2020, which governs investment business and collective investment schemes in Guernsey. It captures anyone carrying on, or holding out as carrying on, controlled investment business in or from the Bailiwick, together with collective investment schemes and their operators. The Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 sits alongside it and applies its enforcement toolkit to licensees under the Protection of Investors Law (controlled investment business), among other regulated sectors.

• Controlled investment business: Persons carrying on controlled investment business in or from the Bailiwick, including Bailiwick bodies carrying on such business outside the Bailiwick, and applicants for a licence, are within scope of the Protection of Investors Law.
• Collective investment schemes: Authorised or registered collective investment schemes and their operators, plus persons carrying on restricted activities in connection with such schemes, are caught.
• Individuals and role-holders: Holders of supervised (vetted or approved) roles, and auditors of licensees and schemes, are within scope under the Protection of Investors Law.
• Alternative investment fund managers: The AIFMD Rules and Guidance, 2021 apply on an opt-in basis to Guernsey AIFMs, Guernsey depositaries of AIFs, and Non-Financial Asset AIF Depositaries who elect to comply.
• Investment exchange operators: The Regulated Investment Exchange Operator Rules and Guidance, 2024 apply to any person licensed to operate an investment exchange under the Protection of Investors Law.
• Prospectus issuers: The Prospectus Rules and Guidance, 2025 apply to prospectuses for registered investment schemes and offers of Category 2 controlled investments by Bailiwick-registered companies, limited partnerships or unit trusts, and to public offers of such investments in the Bailiwick regardless of the offeror's domicile.
• Insider dealing: The Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law, 1996 principally affects individuals dealing in, or disclosing information about, securities within Schedule 2, and professional intermediaries, where dealing occurs on a regulated market or via a professional intermediary.
• Tokenised arrangements: Guidance confirms that tokenising funds, securities or assets does not change underlying regulatory status; tokens with the features of a Category 2 controlled investment are regulated as such and require Protection of Investors Law licensing for restricted activities.

Sources: Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law, 1996 · Insider Dealing (Securities and Regulated Markets) Order, 1996 (Consolidated text) · AIFMD Rules and Guidance, 2021 · The Prospectus Rules and Guidance, 2025 · Regulated Investment Exchange Operator Rules and Guidance, 2024 · Guidance Note on the Tokenisation of Investments and Other Assets in the Bailiwick of Guernsey (July 2026)

Key duties

The central duty is licensing: no person may carry on, or hold out as carrying on, controlled investment business in or from the Bailiwick except under a Commission licence and in accordance with its conditions, and restricted activities in connection with collective investment schemes require the scheme to be authorised or registered. Continuing obligations then flow from the Protection of Investors Law and from Commission rules made under it.

Licensing and notifications

• Licence application: Applicants must supply the information, particulars, fee and supporting documents required, and comply with further information or report requests under section 3 of the Protection of Investors Law.
• Material changes: Where any fact, circumstance or previously supplied information changes after a licence application, the applicant must inform the Commission as soon as practicable and in any event within 14 days (or such other period as the Commission determines).
• Annual returns: Licensees and authorised or registered collective investment schemes must file an annual return with the Commission.
• Open and cooperative dealing: Under the Enforcement Powers Law, a licensee 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, and comply with information and document requests. Documents required to be submitted must be filed in electronic form as prescribed.
• Event notifications: Under the Conduct of Business Rules, licensees must notify the Commission of specified events including changes of name or address, key employee changes, proceedings, holding company and subsidiary changes, and proposed changes in restricted activity.

Governance, compliance and records

• Corporate governance: Under the Licensees (Conduct of Business) Rules and Guidance, 2021, boards must maintain policies and controls, appoint a chief executive and maintain a minimum number of Guernsey resident directors (one for administered licensees, two for others).
• Compliance function: Licensees must appoint a Guernsey-resident compliance officer, maintain a breaches register, keep written compliance procedures and review them at least annually, operate a compliance monitoring programme, and complete an annual compliance return.
• Records and audit: Licensees must keep accounting records, appoint an auditor, prepare audited financial statements and retain transaction, scheme and client records for set periods; Form 142 is used to submit audited financial statements and compliance returns.
• Client-facing duties: Licensees must categorise clients and notify them of their categorisation, issue contract notes with prescribed content, maintain a complaints procedure, maintain a conflicts of interest policy, and comply with client asset and client money account rules (including reconciling client money bank accounts at least monthly and holding client money with an Approved Bank).
• Training and competency: Licensees must maintain a documented training and competency scheme; Financial Advisers appointed on or after 1 January 2015 who are not fully qualified have 30 months to obtain an acceptable level 4 qualification, must complete at least 35 hours of CPD annually (21 structured), and require a valid annual Statement of Professional Standing.
• Outsourcing: Licensees outsourcing functions must conduct due diligence, put a binding written contract in place, ensure Commission and auditor access to records, retain ultimate responsibility, and engage the Commission at an early stage.

Prudential requirements

• Minimum net assets: Under the Licensees (Capital Adequacy) Rules and Guidance, 2021, licensees must maintain at all times the minimum net assets for their category, for example GBP 4,000,000 for a designated trustee or custodian of an open-ended scheme, and the greater of GBP 100,000 or an expenditure-based figure for a designated CIS administrator, calculated using the Schedule 1 framework.
• Insurance and liquidity: Licensees must maintain professional indemnity insurance and cover against employee dishonesty meeting the rule 2A.2 limits, and (unless exempt) a liquidity requirement equal to the greater of GBP 10,000 or 10 percent of annual audited expenditure.
• Immediate notification: Licensees must immediately notify the Commission of an actual or anticipated breach of financial resources or liquidity requirements, an auditor's intention to qualify accounts, or subsidiary or parent balance-sheet insolvency, with remedial steps.

Sector-specific regimes

• AIFMD opt-in: A Guernsey AIFM opting in must notify the Commission in writing, notify commencement of marketing in an EU Member State within 14 calendar days, notify material changes in advance, and meet capital, risk, liquidity, conduct, valuation, reporting and depositary requirements.
• Investment exchange operators: Operators must meet governance, compliance, conduct, client money, prudential and operational requirements, notify the Commission before constitutional changes, maintain a wind-down plan, and comply with periodic and ad hoc reporting.
• Prospectuses: Prospectuses within scope must contain the Part 2 mandatory content and the Schedule 1 statements, be circulated in accordance with Part 4, and communicate post-issue changes to investors under Part 5; directors, general partners, or the manager or trustee are responsible for compliance.

Sources: Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Protection of Investors (Bailiwick of Guernsey) Law, 2020 · AIFMD Rules and Guidance, 2021 · Licensees (Capital Adequacy) Rules and Guidance, 2021 (consolidated text) · Licensees (Conduct of Business) Rules and Guidance, 2021 (consolidated text) · The Prospectus Rules and Guidance, 2025 · Regulated Investment Exchange Operator Rules and Guidance, 2024 · Guidance Note on the Outsourcing of Functions by Entities Licensed Under The Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Guidance Note on Training and Competency Schemes (November 2021) · Explanatory Notes for Completion of Investment Audited Financial Statements and Compliance Returns (Licensee) – Form 142 (February 2025) · Client Money - Investment - Thematic Review 2024

Exemptions and carve-outs

The Protection of Investors Law allows certain persons or classes of person to be exempted from the licensing requirement, subject to conditions the Commission may impose, and permits restricted activities in connection with collective investment schemes subject to exceptions. Several designation instruments and rule-level carve-outs give this effect.

• Designated countries and territories: The Investor Protection (Designated Countries and Territories) Regulations recognise the investor protection laws of listed jurisdictions as adequate, creating a licensing exemption for promotion of controlled investments directed at Guernsey licensees. The 2017 Regulations list IOSCO MMoU signatory jurisdictions; the 1989 Regulations designate the UK, Jersey and Isle of Man; and the 1992 Regulations add the Republic of Ireland for Irish UCITS-type schemes.
• Conditions on the exemption: A promoter relying on the designated-country exemption must give the Commission a notice identifying the country or territory, naming each scheme, stating the manner of promotion, and certifying permission to promote in that manner. Under the 1989 Regulations a notification fee of GBP 500 per scheme applies, except where the designated territory is Jersey, in which case no fee is payable.
• AIFMD is opt-in: The AIFMD Rules and Guidance, 2021 apply only on an opt-in basis, so Guernsey AIFMs and depositaries are not subject to that regime unless they elect to comply.
• Prospectus Rules exclusions: The Prospectus Rules, 2025 do not apply to listed or exchange-traded offers on IOSCO-member-supervised exchanges, private investment funds, takeover code transactions, court-sanctioned schemes, employee share offers, scrip dividends, promotions solely to Professional Investors or to no more than 200 identified persons, offers with a minimum consideration of at least GBP 100,000, EU qualified-investor promotions, and Red Herring prospectuses.
• Insider dealing perimeter: No insider dealing offence arises unless the dealing occurred on a market listed under Section 9 (offender in the Bailiwick) or Section 10 (offender outside the Bailiwick) of the Insider Dealing (Securities and Regulated Markets) Order, and the Law also provides statutory and special defences (for example lack of expectation of profit and the Schedule 1 market maker and price stabilisation defences).

Sources: Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law, 1996 · Insider Dealing (Securities and Regulated Markets) Order, 1996 (Consolidated text) · Investor Protection (Designated Countries and Territories) (Republic of Ireland) Regulations, 1992 · Investor Protection (Designated Countries and Territories) (Bailiwick of Guernsey) Regulations, 2017 · Investor Protection (Designated Countries and Territories) Regulations, 1989 · AIFMD Rules and Guidance, 2021 · The Prospectus Rules and Guidance, 2025

Enforcement and penalties

Enforcement powers sit primarily in the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020, supplemented by criminal offences in the Protection of Investors Law and the Company Securities (Insider Dealing) Law, 1996. The Commission's toolkit is broad and the published enforcement statements show substantial financial penalties and prohibition orders in practice.

• Commission enforcement toolkit: Under the Enforcement Powers Law the Commission may impose enforcement requirements, suspend or revoke licences, disapply exemptions, make prohibition orders against individuals and disqualification orders against auditors and actuaries, and impose private reprimands, enforceable undertakings, public statements and discretionary and administrative financial penalties.
• Market abuse: The Enforcement Powers Law establishes a market abuse code and related offences and penalties, with Royal Court powers to impose financial penalties; the Code of Market Conduct explains how the Commission interprets that regime. Separately, the Protection of Investors (Market Abuse) Regulations, 2008 define the markets and controlled investments within scope of the statutory market abuse offence under the 1987 Law.
• Criminal offences (investment business): The Protection of Investors Law creates criminal offences for carrying on controlled investment business without a licence or in breach of the Law, with associated penalties, director liability provisions and a due diligence defence.
• Criminal offences (insider dealing): The Company Securities (Insider Dealing) Law, 1996 creates the criminal offence of insider dealing, with separate offences and sanctions for failing to cooperate with investigations or obstructing warrants.
• Example financial penalties: Published statements include a GBP 190,000 penalty on the Channel Islands Stock Exchange (2014), a GBP 203,000 penalty on Crescendo Advisors International Limited and GBP 33,810 on its Managing Director (2022), penalties of GBP 40,000 and GBP 20,000 on the former directors of Criteria Wealth Management (2020), and a revised GBP 100,000 penalty on Bordeaux Services (Guernsey) Limited. These were imposed under section 11D of the Financial Services Commission Law or section 39 of the Enforcement Powers Law.
• Example prohibitions: Prohibition orders have barred named individuals from controlled roles across the finance sectors for fixed periods (for example six and four year prohibitions in the Criteria Wealth matter, and multi-sector prohibitions running to 2029 in individual notices), often with the section 3(1)(g) Fiduciaries Law exemption disapplied for the same period.
• Form 142 accuracy: Inaccurate submissions on Form 142 can attract penalties under the Financial Services Commission (Fees and Administrative Penalties) Regulations, 2023.

Sources: Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 · Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Company Securities (Insider Dealing) (Bailiwick of Guernsey) Law, 1996 · Protection of Investors (Market Abuse) (Bailiwick of Guernsey) Regulations, 2008 · Code of Market Conduct · Explanatory Notes for Completion of Investment Audited Financial Statements and Compliance Returns (Licensee) – Form 142 (February 2025) · Crescendo Advisors International Limited, Mr Hamish Jebb Hamilton Few (2022-12-30) · Criteria Wealth Management Limited, Mark Peter Penney, Marc Adam Roxby (2020-05-04) · Capital Solutions Limited, Stillwater Worldwide Limited, Stillwater Investment Enterprise Limited, Philip Anthony John Montague, Terence Joseph Scullion, David John de Carteret (2017-06-14) · Bordeaux Services (Guernsey) Limited, Peter Gordon Radford, Neal Anthony Meader, Geoffrey Robert Tostevin (2016-09-07) · The Channel Islands Stock Exchange (2014-10-01) · Gordon, Martyn Paul (Date of Birth 22 July 1972) of La Corniche, La Mine Doree, Rue de la Boullerie, St Andrews, Guernsey, GY6 8XQ (2015-08-17)