The Commission urges anyone considering investing in Bitcoins or Bitcoin related investments to act with extreme caution. There are signs that the current valuations of Bitcoins are being enhanced by speculative investment flows. Whilst we appreciate some of those holding Bitcoins over the last 12 months may have made very good financial returns, we would encourage all potential investors to remember that Bitcoins are not backed by underlying assets and that it is possible that those investing in them could see very large losses rather than good returns with the risks being very similar to those associated with gambling.
Mini-bonds became popular in the UK after the financial crisis. They are issued by small companies as a means of raising money. This is an alternative method of finance for the company (the issuer) to borrowing from a bank. Because the company issuing the bonds may be very small and just starting out, these are high risk investments with correspondingly high yields. Consequently, mini-bonds have been attractive to people seeking higher interest rates in the continuing low interest rate environment. Mini-bonds are not traded on a stock exchange and so are only repayable by the company at maturity.
Mini-bonds are not directly authorised by the Commission nor by the FCA and, in the UK, are not covered by the Financial Services Compensation Scheme (“FSCS”). Similarly, there is no compensation scheme for those who invest in mini-bonds offered by local companies.
The Commission urges anyone considering investing in mini-bonds to act with caution. Whilst the interest rate offered by the issuing company may appear attractive in comparison to the interest rates available, for example, on fixed term deposits, mini-bonds carry a higher level of risk. You should consider these risks very carefully. In extreme, if the company issuing the mini-bonds were to fail, you could lose all the money that you invested.
Whilst we appreciate that some mini-bonds may have made, or offer, very good financial returns, we would encourage all potential investors to remember that mini-bonds are not necessarily backed by underlying assets. It is possible that those investing in them could see very large losses rather than good returns.
If you think you may be a victim of a payment fraud, you should contact your bank or card provider in the first instance, and then report it to Guernsey Police. Likewise, if you have lost money to an investment fraud you should contact Guernsey Police. More information can be found here.
Yes, there has been a Scheme in place since November 2008. More information can be found here.
You can find out more on the Scheme’s dedicated website, a link to which can be found here.
Most high street banks offer a ‘basic bank account’, which are particularly designed for people with poor credit histories, who can have difficulty opening other types of bank accounts. More information on this can be found here.
The Current Account Switch Service is a free-to-use account switching service, which is offered by some of the high street banks in Guernsey. Your bank will be able to tell you if they offer this service locally. More information can be found here.
If you wish to make a complaint against a bank, you can find more information here.
Yes, the Channel Islands Financial Ombudsman was established on the 16 November 2015 and is situated in Jersey. Click here for further information.
Unless the provider is licensed by the Commission for another reason, e.g. a bank, the Commission does not regulate firms or individuals that advise on, arrange, or manage loans. This includes mortgages, personal loans and car loans. More information can be found here.
The Commission would suggest that you get in touch with your bank in the first instance. More information can be found here.
If you learn that a collective investment scheme (CIS) in which you have invested money has been liquidated, and you have not received the entire amount of the value of your investment, you should address your complaint directly to the liquidator of the CIS. You will need to provide documentation which shows the valuation of your investment.
You may also wish to make a complaint to your pension fund administrator, if you feel the advice it gave to you did not meet your requirements in terms of the suitability of the category of investments it made on your behalf. If the complaint is not resolved to your satisfaction, you may then wish to refer it to the Channel Islands Financial Ombudsman.
The Collective Investment Schemes (Compensation of Investors) Rules 1988 (as amended) provide for compensation for investors in Class A schemes, of up to £5m in any year. Subject to this limit, the maximum compensation payable per investor is 90% of the first £50,000, and 30% of the balance, up to £100,000 (1.e. a maximum total of £60,000).
To date, no call has been made on the compensation scheme.
There is no compensation scheme covering investors in Class B schemes, Class Q schemes, or closed ended investment schemes.
All companies, limited partnerships and limited liability partnerships wishing to be formed in the Bailiwick of Guernsey must first be set up at the Guernsey Registry. In other words, they need to be ‘registered’ at the company registry.
In order to carry out any financial activity such as banking, insurance, investment or fiduciary services in the Bailiwick of Guernsey, a business must obtain a licence from the Commission.
Prescribed business is the term used for firms of legal professionals, accountants and estate agents carrying on business in or from within the Bailiwick of Guernsey.
These are financial services businesses which are required to be registered with, but not regulated, by the Commission. Again, this is different to being registered at the Guernsey Registry.
Top 5 tips:
- If you decide to seek financial advice, or buy a financial product from outside of the Bailiwick, be aware of the risks involved.
- Ensure that the person or firm is also licensed and regulated in the relevant jurisdiction.
- Financial providers who are not licensed in the Bailiwick should not be approaching you.
- If you are approached by a financial provider from outside the Bailiwick, please advise the Commission.
- It is advisable to check whether the particular jurisdiction has a deposit or investor compensation scheme in force, whether you would be covered, and what level of cover it offers.
The term ICO refers to a digital way of raising funds from the public using a virtual currency, also known as cryptocurrency. An ICO can also be known as ‘token sale’ or ‘coin sale’. They are very high-risk speculative investments.
ICO issuers accept a cryptocurrency, like Bitcoin or Ether, in exchange for a proprietary ‘coin’ or ‘token’ that is related to a specific firm or project. ICOs may represent a share in a firm, a prepayment voucher for future services or in some cases offer no discernible value at all. Often ICO projects are in a very early stage of development.
The Commission, along with several other regulators, has issued an advisory notice regarding the risks of investing in an ICO. Most ICOs are unregulated. This means that it is unlikely that there will be any investor protections if anything goes wrong with an investment in an ICO. As with other cryptocurrencies, the value of the investment is volatile and has the potential for fraud. The Commission would not expect ICOs to be sold to, or bought by, retail investors. Anyone considering buying an ICO should carry out full research on the ICO project and be prepared to lose the entire value of their investment.
Further information about ring-fencing can be found here
Pensions are effectively a long term savings plan. Pensions are a good way of saving for your retirement. The Commission has issued a Helpsheet on pensions which is available here.
Authorised Push Payment (APP) fraud happens when fraudsters deceive consumers or individuals at a business to send them a payment under false pretences, to a bank account controlled by the fraudster.
This can be as simple as fraudsters requesting payment for goods that do not exist, invoices being issued for services which have not been carried out, or if, for example, an individual’s online banking has been hacked or intercepted.
More information can be found here
ATMs in Guernsey will operate as normal. Similarly, there is no suggestion that you will be unable to use bank cards in ATMs in the UK or Europe, in much the same way that you are already able to use your card when you travel to other non-EU countries such as Australia or America.
You will still be able to receive and make Sterling payments to and from your bank account after Brexit.
There could be potential changes to the regulatory framework resulting in changes to cross-border transactions between the UK and EU. This could impact the charges/fees and time taken to process such payments.
There is no reason for mobile apps not to work.
Visa and MasterCard should continue to work.
Customers may experience changes with cross-border transactions between the UK and the EU, specifically relating to charges and the time taken to process payments, due to potential regulatory changes.
There is no suggestion that PayPal will not work.
There may be changes made to the Terms and Conditions of use. You may refer to the official website for any updates.
There is no suggestion that you will be unable to buy foreign currency after Brexit.
When entering France from outside the EU with cash, whether by plane or boat, you are required to declare to Customs at the French port of entry any amount held that is equal to or exceeding 10,000 Euros (or its equivalent value in other currencies).
Similarly, if you are entering or leaving the Bailiwick of Guernsey and are carrying cash in equivalent value of 10,000 Euros or more, you must declare this to a Border Agency Officer.
There is no indication at this present time that this is to change with Brexit, but you may refer to the official French Customs website (in English) for any updates, and also the States of Guernsey website.
According to MoneyGram, it is not anticipated that there will be any noticeable differences in the way they service accounts. MoneyGram should continue to work.
The Commission does not specifically license insurers outside of the Bailiwick, but instead treats insurers from particular jurisdictions as “recognised insurers”. Recognised insurers are those incorporated and regulated in countries with similar regulatory standards as Guernsey, and a list of those countries is published on the Commission’s website, a link to which can be found here.
The only exception to the above recognition regime is third party motor insurance, which must be authorised by the Commission. A list of authorised motor insurers is also provided via the link above.
There are no current plans to make any changes to this regime as a result of Brexit.
If you will be driving in the EU, you must ensure that you have a valid driving licence for the country in which you will be driving, as this may affect the validity of your insurance policy. More information about the potential changes to driving licence provisions can be found here.
Further information on driving abroad can be found here.
If you currently have an International Driving Permit, you should still be able to drive in a number of EU countries.
It is important to note that, in order to be properly insured, you must hold a valid driving licence for the country in which you will be driving. Some EU countries may require additional insurance paper work e.g. a ‘green card’ even if you hold an International Driving Permit. The States of Guernsey have issued the following document here, which provides further guidance.
Further information on driving abroad can be found here.
If you have an International Driving Permit, and valid insurance, you should still be able to take your car to a number of EU countries. In some EU countries there may be a requirement put in place for additional insurance paperwork e.g. a ‘green card’. A valid driving licence for the country in which you will be driving is necessary to ensure your car insurance is valid. The States of Guernsey have issued the following document here, which provides further guidance.
Further information on driving abroad can be found here.
There is no indication that you will be unable to receive dividends from EU companies and funds. But, it is important to note that there may potentially be changes to the taxation of dividends, for example withholding tax rates may change which might affect your tax position.