Enforcement Powers

This page explains, in general terms, enforcement by the Commission.  This page is not intended to be an exhaustive explanation of the scope of the Commission’s enforcement powers.  Parties with specific queries concerning the enforcement powers of the Commission should refer to the provisions of the laws listed below, and may wish to consider consulting a professional for further advice / information.

Introduction

Regulation, of itself, does not ensure compliance, that can only be assured by a combination of respect and competence, underpinned by enforcement.  International standards and assessments enjoin or encourage enforcement to ensure compliance, and regulatory performance is invariably coupled with compliance issues.
 
The Commission’s enforcement powers are derived principally from the following legislation:

  1. The Financial Services Commission (Bailiwick of Guernsey) Law, 1987,

  2. The Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020

  3. The Banking Supervision (Bailiwick of Guernsey) Law, 2020,

  4. The Regulation of Fiduciaries, Administration Businesses and Company Directors etc (Bailiwick of Guernsey) Law, 2020,

  5. The Insurance Business (Bailiwick of Guernsey) Law, 2002,

  6. The Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002,

  7. The Protection of Investors (Bailiwick of Guernsey) Law, 2020,

  8. The Prescribed Businesses (Bailiwick of Guernsey) Law, 2008,

  9. The Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008,

  10. The Financial Services Commission (Site Visits) (Bailiwick of Guernsey) Ordinance, 2008, and

  11. The Protection of Investors (Administration and Intervention) (Bailiwick of Guernsey) Ordinance, 2008

in each case, as amended, collectively, for the purposes of this document, “the Regulatory Laws”.
 
The Commission also performs other prescribed regulatory functions under other Bailiwick legislation.  These include:

  1. The Protection of Depositors, Companies and Prevention of Fraud (Bailiwick of Guernsey) Law, 1969,

  2. The Road Traffic (Compulsory Third-Party Insurance) (Guernsey) Law, 1936,

  3. The Road Traffic (Compulsory Third-Party Insurance) (Alderney) Law, 1950,

  4. The Surf-Riding (Long Boards) (Compulsory Third-Party Insurance) (Guernsey) Law, 1969,

  5. The Vessels and Speedboats (Compulsory Third-Party Insurance, Mooring Charges and Removal of Boats) (Guernsey) Law, 1972,

  6. The Transfer of Funds (Guernsey) Ordinance, 2007,

  7. The Transfer of Funds (Alderney) Ordinance, 2007,

  8. The Transfer of Funds (Sark) Ordinance, 2007,

  9. The Companies (Guernsey) Law, 2008,

  10. The Companies (Alderney) Law, 1994,

  11. The Foundations (Guernsey) Law, 2012,

  12. The Limited Liability Partnerships (Guernsey) Law, 2013,

  13. The Limited Partnerships (Guernsey) Law, 1995,

  14. The Companies Securities (Insider Dealing) (Bailiwick of Guernsey) Law, 1996,

in each case, as amended.
 
The Commission is also responsible for supervising regulated entities’ compliance with the regulatory requirements identified in the minimum licensing requirements of the Regulatory Laws.  These include the requirements of:

  1. The Companies (Guernsey) Law, 2008,

  2. The Companies (Alderney) Law, 1994,

  3. The Road Traffic (Compulsory Third-Party Insurance) (Guernsey) Law, 1936,

  4. The Road Traffic (Compulsory Third-Party Insurance) (Alderney) Law, 1950,

  5. The Surf-Riding (Long Boards) (Compulsory Third-Party Insurance) (Guernsey) Law, 1969,

  6. The Vessels and Speedboats (Compulsory Third-Party Insurance, Mooring Charges and Removal of Boats) (Guernsey) Law, 1972,

  7. The Steam Boilers (Insurance) Ordinance, 1952,

  8. The Insurance Business (Financial Guarantee Insurance: Special Provisions) (Guernsey) Law, 1996,

  9. The Criminal Justice (Proceeds of Crime)(Bailiwick of Guernsey) Law, 1999,

  10. The Disclosure (Bailiwick of Guernsey) Law, 2007,

  11. The Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law, 1991,

  12. The Terrorism and Crime (Bailiwick of Guernsey) Law, 2002,

  13. The Drug Trafficking (Bailiwick of Guernsey) Law, 2000, and

  14. The Transfer of Funds (Guernsey) Ordinance, 2007, the Transfer of Funds ; (Alderney) Ordinance, 2007 and the Transfer of Funds (Sark) Ordinance, 2007,

in each case, as amended, and Nos. 9-14 collectively (“the Bailiwick AML/CFT regime”).

Commission's Approach To Enforcement

The Commission’s use of its enforcement powers in any case is guided by the Commission’s Enforcement Policy (the “Policy”).  As noted in the Policy, “enforcement” includes all the means available to the Commission to achieve compliance with the regulatory regimes for which it is responsible.
 
Where sufficient and appropriate, the Commission will address regulatory contraventions or misconduct by agreement with the person concerned, through ongoing supervisory processes, and try to agree the implementation of a remedial action plan.
 
Where the nature of the contravention or misconduct is of sufficient seriousness, enforcement measures or a combination of remediation and enforcement measures may be warranted.  Where appropriate, the Commission will engage the party with a view to reaching agreed terms regarding these measures.  The Commission will determine the appropriateness of such engagement on a case by case basis.
 
The Explanatory Note on the Commission’s general approach to Enforcement and Enforcement Measures can be found here

The Commission has not included all of its powers in the Explanatory Note, but has focussed upon those enforcement measures about which it is most frequently asked questions.
 

Right To Appeal

The right to appeal against a decision of the Commission to impose an enforcement measure is prescribed in the Enforcement Powers Law.

Criminal Prosecution

The Commission is not a prosecuting authority, and does not have the power to bring criminal charges against a person or to undertake a criminal investigation into an apparent breach of the Regulatory Laws or the Bailiwick’s AML/CFT regime, for which the Commission undertakes supervisory functions.
Should the Commission come across, at any time, a suspected or apparent breach of a Regulatory Law or the Bailiwick’s AML/ CFT regime,  the Commission may refer the matter to HM Procureur (i.e. Attorney General), or may refer the matter directly to the law enforcement agencies – the Guernsey Police or Guernsey Border Agency. A decision whether to commence an investigation and/or bring criminal charges is a matter solely for HM Procureur.
 
The Commission will generally regard a breach of a Regulatory Law or the Bailiwick’s AML/ CFT regime as sufficiently serious if and to the extent that it poses a threat to clients or potential clients or to the reputation of the Bailiwick and/or where it casts doubt on the integrity, competence or financial standing of the person concerned. It will also be relevant if the breach was deliberate or premeditated rather than accidental, or if the party has failed to report the matter giving rise to the breach to the Commission.
 
Failure, inability or refusal to cooperate with the Commission to rectify a breach, and a history of past breaches or poor regulatory compliance (which may give grounds to believe that the breach is likely to be repeated and/or is part of a systemic failure) will also be taken into account. These factors are not exhaustive, but are intended to indicate the types of matters that may be referred for consideration by HM Procureur.  Ultimately, cases that may be referred will be assessed by the Commission on their merits on a case-by-case basis, and referral will not necessarily be made on every occasion.

Disclaimer

This article has been prepared for information purposes and does not constitute legal advice. The Commission does not accept any legal liability for any action that may be taken in response or as a result of the information contained in this article.