Applicable Law
Licences are issued under The Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022 (“The LCF Law”).
Associated legislation, rules and guidance
Applicants are advised that further relevant information can be accessed from ‘Legislation and Guidance’ in the Lending, Credit and Finance section of our website.
Applicable financial services
The lending, credit and finance (‘LCF’) sector in the Bailiwick covers a broad range of services although some exemptions to licensing apply.
The LCF Law covers four areas, with activities licensed under different parts of the Law:
Consumer credit and home finance (Part II)
Credit providers - including banks, building societies and non-bank lenders who provide loans, home finance and consumer credit, as well as retailers who provide credit in their own right.
Ancillary service providers – including credit and home finance brokers, introducers who arrange finance for customers and debt administrators.
Financial firm businesses (Part III FFB)
Most former Non-Regulated Financial Services Businesses will fall into this category (although those offering consumer credit or home finance products will fall under Part II).
Virtual Asset Service Providers (Part III VASP)
Those carrying out virtual asset activities.
Operation of financial platforms and intermediaries (Part IV)
This includes crowdfunding platforms and peer to peer financial platforms.
Licensing requirement
From 1 July 2023, anyone wishing to provide services covered within the Law must have a licence, unless their activities are covered by one of the class exemptions published by the Commission, or they have been granted an individual exemption.
The requirement for licensing applies to existing arrangements as well as new agreements. This means that even if a firm or individual is not carrying out new business, they will need to be appropriately licensed (or exempted) for their existing book of business. This does not mean that there is a requirement to retrospectively review prior agreements, however going forward, the relevant conduct rules must be applied to ensure that customers are treated fairly.
Before completing an application form it is essential that applicants have regard to the scope of the LCF Law to establish if an application for licensing or an exemption is required. LCF licences may be issued to both corporate and personal applicants.
New licence applications
The content of an application pack will vary depending on the nature of the business activity being undertaken. Broadly, application packs will be required to contain the following:
- explanatory covering letter stating the rationale for the application submission;
- application form – please complete the relevant form for either companies/partnerships or individuals;
- activity-specific annex(es) – these are relevant to each type of licence or licences being applied for. For the most-part each annex contains a number of additional supplementary questions. These will allow the States of Guernsey and the Commission to gauge the existing population of firms undertaking LCF activities within the Bailiwick. Please only answer the relevant questions set(s);
- application fee – information regarding fees can be found on our website. For those conducting multiple activities, this will be a single fee in line with the highest of the applicable fees.
- copies of the documents requested as part of the application form; and
- relevant Online Personal Questionnaires (“OPQ”) and Online Appointments (“OA”) will also need to be submitted.
Discretionary exemption from licensing
The LCF Law enables the Commission to issue discretionary exemptions. An individual or firm may apply for a discretionary exemption where it conducts an activity that would fall within the scope of licensing under the LCF Law but is ineligible to utilise one of the existing classes of exemptions. The discretionary exemption application form can be found with the other LCF application forms.