2021 Annual Report31st May 2022
The Commission has today published its 2021 annual report and financial statements.
The report notes that the combination of the vast quantitative easing undertaken across the developed world to combat Covid restrictions and the war in the Ukraine have crystallised the inflationary risk the Commission had previously highlighted. The fiscal and monetary responses to this inflation are likely to see increased financial stability risks in the year ahead. Firms need to be mindful of the effect these economic changes, possibly on a scale unseen in at least thirty years, may have on their customers, risk profiles and business models.
During 2021, the Commission initiated its second three-year business plan, a key tenet of which is the continuation of its long running project to prepare for the Bailiwick’s next inspection against the Financial Action Task Force (FATF)’s international standards for combatting money laundering and terrorist financing in 2023/4. The project has already delivered enhanced data returns and a review of the Commission’s supervisory and authorisation policy and procedures. The next phase will see an increased number of financial crime inspections and continued work to ensure that the money laundering and terrorist financing risks in the Bailiwick are understood and mitigated by all actors associated with financial services. Global expectations on countering money laundering and terrorist financing continue to evolve and the Bailiwick’s next evaluation by the Council of Europe’s regional FATF inspectorate called MONEYVAL will see greater emphasis on how well firms are applying measures which are commensurate with the money laundering and terrorist financing risks they face.
This year’s report includes carbon emissions reporting for the first time reflecting the Commission’s move towards becoming a net zero emissions regulator. We have witnessed an evolution of non-financial reporting and, in June 2021, the Commission enhanced the Finance Sector Code of Corporate Governance to ask firms and funds to consider their environmental preparedness and disclosures.
Reflecting the Commission’s commitment to help develop sustainable finance, during 2021 the Commission also amended the Guernsey Green Fund Rules - making two liberalisations based on industry feedback gathered during its thematic review of the Guernsey Green Fund Regime. These aim to reduce the administrative burden on funds while maintaining the integrity of the Guernsey Green Fund regime and investors’ confidence in it. Further to this innovation, the Commission also reformed its successful Private Investment Fund regime in 2021, providing two new innovative pathways designed to allow experienced and family office investors improved unbureaucratic access to regulated structures.
Commenting on the report, Commission Chairman, Julian Winser, said: “I was delighted to be appointed a Commissioner during 2021 and to take over as Chairman at the end of the year. The Commission will continue to work hard to ensure that the Bailiwick remains credible as a good place in which to do high quality business.”
Director General William Mason commented, “Working through the Covid restrictions proved tough for many at the Commission. I am immensely grateful for the fortitude my colleagues continued to show during 2021 after a gruelling 2020. In continuing to put the Bailiwick first in their work to both innovate and uphold standards they help the Bailiwick maintain the prosperity it currently enjoys thanks to its buoyant financial services sector.”