Non-Regulated Financial Services Businesses
The Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008 and the Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008 (Amendment) Ordinance, 2008 came into force on 30 July 2008.
The NRFSB Law creates a public register of non-regulated financial services businesses. Applications for registration must be made to the Commission, which will maintain the register on its website. The NRFSB Law states that, except in circumstances where the Commission has notice of any grounds upon which it could refuse an application for, or revoke, registration of a financial services business, the Commission has no obligation to make any enquiries concerning an application for registration or the continued registration of any non-regulated financial services business.
Repeal of the NRFSB Law
The NRFSB Law will be repealed on 1 July 2023 and replaced by provisions in The Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022. More information regarding the introduction of the LCF Law can be found on our website.
Firms previously registered as NRFSBs will need to apply for a licence under the new Law, unless they qualify for exemption. Firms which obtain their new licence before 1 July 2023 will be able to continue their business as usual.
Once licensed, firms will be required to follow Rules which will be published by the Commission. Those involved in providing credit or home finance in particular, must ensure that they have in place appropriate measures to safeguard the interests of customers.
Firms currently registered to conduct the activity of lending under the NRFSB Law, who do such lending through what are termed “regulated agreements”, will be required to be licensed and regulated accordingly under Part II of the LCF Law (unless otherwise exempted).
The Law will also introduce the licensing and regulation of “financial firm businesses” (“FFBs”). Firms which undertake any of the activities listed under Part A of Schedule 1 to the LCF Law, and which do not already hold a licence under one of the Bailiwick’s other regulatory Laws will be required to be licensed as an FFB under Part III of the LCF Law.
Type of financial services business carried out
The list below has been copied from the NRFSB Law. Please note that the types of financial services business requiring a FFB licence under the LCF Law are slightly different. This can be accessed in Schedule 1 to the LCF Law.
- Lending (including, without limitation, the provision of consumer credit or mortgage credit, factoring with or without recourse, financing of commercial transactions (including forfeiting) and advancing loans against cheques).
- Financial leasing.
- Operating a money service business (including, without limitation, a business providing money or value transmission services, currency exchange (bureau de change) and cheque cashing).
[3A. Buying, selling or arranging the buying or selling of, or otherwise dealing in, bullion or buying or selling postage stamps, except where
a) in the case of buying, selling or arranging the buying or selling of, or otherwise dealing in, bullion, the business consists only of buying, selling or arranging for the buying or selling of bullion, or otherwise dealing in bullion, where the value of each purchase, sale or deal does not exceed £10,000, in total, whether the transaction is executed in a single operation or in two or more operations which appear to be linked,
b) in the case of buying postage stamps, the business consists only of buying postage stamps where the value of each purchase does not exceed £10,000, in total, whether the transaction is executed in a single operation or in two or more operations which appear to be linked, and
c) in the case of selling postage stamps, the business consists only of selling postage stamps –
i) where the value of each sale does not exceed £10,000, in total, whether the transaction is executed in a single operation or in two or more operations which appear to be linked, or
ii) in the course of -
A) a postal services business carried on under the authority of a licence granted under the Post Office (Bailiwick of Guernsey) Law, 2001, or
B) a business authorized to sell postage stamps by the holder of a licence under that Law.]
- Facilitating or transmitting money or value through an informal money or value transfer system or network.
- Issuing, redeeming, managing or administering means of payment, means of payment includes, without limitation, credit, charge and debit cards, cheques, travellers' cheques, money orders and bankers' drafts [and electronic money].
- Providing financial guarantees or commitments.
- Trading (by way of spot, forward, swaps, futures, options, etc.) in -
(a) money market instruments (including, without limitation, cheques, bills and certificates of deposit),
(b) foreign exchange, exchange, interest rate or index instruments, and
(c) commodity futures, transferable securities or other negotiable instruments or financial assets.
- Participating in securities issues and the provision of financial services related to such issues, including, without limitation, underwriting or placement as agent (whether publicly or privately).
- Providing settlement or clearing services for financial assets including, without limitation, securities, derivative products or other negotiable instruments.
- Providing advice to undertakings on capital structure, industrial strategy or related questions, on mergers or the purchase of undertakings except where the advice is provided in the course of carrying on the business of a lawyer or accountant.
- Money broking.
- Money changing.
- Providing individual or collective portfolio management services or advice.
- Providing safe custody services.
- Providing services for the safekeeping or administration of cash or liquid securities on behalf of clients.
- Carrying on the business of a credit union.
- Accepting repayable funds other than deposits.
[17A. Otherwise investing, administering or managing funds or money on behalf of other persons.]