FAQs

What is a financial services business?

A definition of financial services business is provided in Schedule 1 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 2007.

What AML/CFT requirements must be met by financial services businesses?

Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 as amended ("Schedule 3") and The Handbook on Countering Financial Crime and Terrorist Financing ("the Handbook") set out the Bailiwick's anti-money laundering and countering the financing of terrorism ("AML/CFT") framework.

The Handbook contains rules and guidance made by the Commission under Schedule 3, as well as references to other relevant legislation, for example, in respect of disclosures and UN, EU and other sanctions.

What is a prescribed business?

A prescribed business means any business of a type described in Paragraphs 1, 3 or 5 of Schedule 2 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999​.

What AML/CFT requirements must be met by prescribed businesses?

Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 as amended ("Schedule 3") and The Handbook on Countering Financial Crime and Terrorist Financing ("the Handbook") set out the Bailiwick's anti-money laundering and countering the financing of terrorism ("AML/CFT") framework.

The Handbook contains rules and guidance made by the Commission under Schedule 3, as well as references to other relevant legislation, for example, in respect of disclosures and UN, EU and other sanctions.

Does a person who wishes to conduct non-regulated financial service business or prescribed business in or from within the Bailiwick need the Commission’s prior approval?

Unless a person who wishes to carry on non-regulated financial services business or prescribed business can benefit from the exemption provisions in the law (see the FAQ on exemptions below), they must register with the Commission and meet the requirements of Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 as amended and the rules and guidance in the Handbook.  Details of how to apply are found in the New Applicants and the Registered Business pages of our website.

I understand that, if a business carries out non-regulated financial services business or prescribed business on an occasional or very limited basis, it is exempt from complying with the requirements of Schedule 3 and the Handbook. What does this mean?

Businesses undertaking non-financial services business as defined in Schedule 1 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 (“the Law”) on an incidental or occasional basis may not be required to register with the Commission or to meet the requirements of Schedule 3 to the Law and the rules in the Handbook.  To be excluded, your business must meet all of the criteria below (which appear in Paragraph 29 of Schedule 1 to the Law):

  1. The total turnover of that business, plus that of any other financial services business carried on by the same person, does not exceed £50,000 per annum,
  2. No occasional transactions are carried out in the course of such business, that is to say, any transaction involving more than £10,000, where no business relationship has been proposed or established, including such transactions carried out in a single operation or two or more operations that appear to be linked,
  3. The turnover of such business does not exceed 5% of the total turnover of the person carrying on such business,
  4. The business is ancillary, and directly related, to the main activity of the person carrying on the business,
  5. In the course of such business, money or value is not transmitted or such transmission is not facilitated by any means,
  6. The main activity of the person carrying on the business is not that of a financial services business,
  7. The business is provided only to customers of the main activity of the person carrying on the business and is not offered to the public, and
  8. The business is not carried on by a person who also carries on a business falling within paragraphs 20 to 23A of Part I of Schedule 1 to the Law.

Businesses undertaking prescribed business as defined in Schedule 2 to the Law on an incidental or occasional basis may not be required to register with the Commission or to meet the requirements of Schedule 3 to the Law and the rules in the Handbook.  To be excluded, your business must meet all of the criteria below (which appear in Paragraph 1(2) of Schedule 3 to the Law:

  1. The total turnover of the person carrying on the prescribed business in respect of the prescribed business does not exceed £50,000 per annum,
  2. The prescribed business – 
    1. If it is an estate agent, does not hold deposits, or 
    2. If it is a prescribed business other than an estate agent, does not carry out occasional transactions,
  3. The services of the prescribed business are provided only to customers or clients resident in the Bailiwick, and
  4. The funds received by the prescribed business are drawn on a bank operating from or within the Bailiwick.

If your business satisfies all of the above criteria you do not need to register with the Commission and you are not subject to the requirements of Schedule 3 or the Handbook.

Virtual currencies, crypto currencies and Initial Coin Offerings (“ICO”)

The Commission has a policy of encouraging innovation through initiatives such as our Innovation Soundbox, which offers a supportive environment where existing or future licencees can come and discuss ideas, innovations or future applications with our authorisations or supervisory experts. 

Globally, one specific area of innovation within financial services has been the increasing use of virtual, or crypto, currencies including in the development of Initial Coin Offerings (“ICO”), where an individual receives a token or coin in exchange for an investment into a company or alternative vehicle.

Whilst the Commission has already worked with firms using the underlying technology of these currencies, i.e. Blockchain, in common with other regulators around the world, the Commission believes there are significant risks in the use of virtual or crypto currencies especially for retail customers. Nevertheless, we understand that professional investors with a high risk appetite may wish to invest in this developing sector. 

Virtual or crypto currencies could interact with our regulatory laws in a number of ways and therefore any application would need to be assessed on its individual merits. We will assess any application by the same criteria we use for other asset types or structures, which means we would look to ensure that key controls are appropriate - for example around custody, liquidity, valuation of assets and investor information.

Our current Handbook for Financial Services Businesses on Countering Financial Crime and Terrorist Financing already permits the use of technology for customer due diligence and we would expect any applicant to demonstrate to us how it plans to comply within the Bailiwick’s current laws and rules, especially when establishing the identity of investors and beneficial owners.

Due to the significant risk of fraud and/or money laundering, we would be cautious about approving applications for ICOs which could then be traded on a secondary market.  We would also be cautious about the establishment of a digital currency exchange within the Bailiwick.

We continue to encourage firms or individuals to use our Innovation Soundbox to discuss potential applications and to meet with our Authorisations team at an early stage so we can help them understand what our key questions are likely to be when they make a formal application.