This news item has been republished as since its release a number of clarifications have been sought.
The Finance Sector Code of Corporate Governance (“the Code”), issued in September 2011 with an effective date of 1 January 2012, stated the GFSC will require an assurance statement from companies confirming that the directors have considered the effectiveness of their corporate governance practices and are satisfied with their degree of compliance with the Principles set out in the Code, or the alternative codes accepted by the GFSC, in the context of the nature, scale and complexity of the business.
The Code continued that the GFSC would liaise with the finance sector on when and how the assurance statements should be provided. To that end a copy of the assurance statement to be completed by the companies covered by the Code can be found here. The assurance statement should cover the period commencing 1 January 2012 until the date of submission. Where possible the assurance statement should be submitted with the relevant Annual Return as required by the Fiduciary Services, Investment Business and Insurance Divisions or the S36C Annual Review as required by the Banking Division. Where this is not possible the assurance statement may be submitted separately but in either case it should be submitted by no later than 31 July 2012.
Only one assurance statement needs to be provided by a licensee. Where a licensee holds more than one licence the statement should be provided to the Division with which it has most contact. Insurers subject to the Licensed Insurers’ Corporate Governance Code (“the Insurers’ Code”) do not need to submit an assurance statement, however must continue to submit the summary of the extent of adherence to the corporate governance principles set out in the Insurers’ Code as required by The Insurance Business (Annual Return) Regulations, 2008. Companies which report against the UK Corporate Governance Code or the Association of Investment Companies Code of Corporate Governance are deemed to meet the Code; however, these companies are still required to submit an assurance statement.
With regard to Fiduciary licensees, the Commission generally reviews corporate governance at the lead licensee level, therefore only one assurance statement and review would normally be required. This is because the lead and joint licensees should have the same directors, policies, procedures and controls, and commonality of business. Where this is not the case, the licensee would have to give consideration to either preparing a separate assessment and review for the joint licensee in question or addressing that licensee’s position within the assessment and review for the lead licensee. The requirement to consider a joint licensee’s corporate governance is likely to depend upon how materially different the joint and lead licensees are.
All companies licensed or authorised/registered post 1 January 2012, but pre 31 July 2012, are required to submit an assurance statement prior to 31 July 2012 (or as soon after as is practicable). Any companies licensed or authorised/registered post 31 July 2012 are not required to submit an assurance statement until the further guidance referred to below has been issued by the Commission.
It is intended going forward that the assurance statement will be incorporated into the respective Annual Returns required by each of the Fiduciary Services, Investment Business and Insurance Divisions and into the S36C Annual Review required by the Banking Division however, for the time being it is a standalone document. The Commission will provide further guidance on the submission for the next period during early Q4 2012.
The Commission will be reviewing all submissions at 31 July 2012 and will write to any entities that have not made a submission and would be expected to have done so. Please note whilst the assurance statements do not for this year form part of the annual returns or annual reviews by any division, from next year they will and non-submission will then be a breach which is subject to the Financial Services Commission (Administrative Financial Penalties) (Bailiwick of Guernsey) Regulations, 2010.