"We must enable growth, not regulate it into obscurity"

In a high-level speech entitled “Enabling Growth – Digital and Sustainable Finance”, the Commission’s Director General, William Mason, set out a pro-growth and pragmatic regulatory agenda that puts economic prosperity and financial stability ahead of the precautionary principle.  William was speaking at an event organised by STEP, Guernsey branch and the Guernsey Association of Trustees.

On sustainable finance, he highlighted Guernsey’s pioneering role with the creation of the world’s first regulated green fund regime in 2018 and an innovative green insurance capital regime in 2020 but he reinforced a shift in emphasis:

• no plans to impose mandatory ISSB/IFRS sustainability disclosure standards in the foreseeable future;
• new Guidance Note on anti-greenwashing to be issued next month, making clear that existing licensing criteria already prohibits greenwashing so new rules are not necessary; and
• the Commission’s proposals to broaden the Finance Sector Code of Corporate Governance to require boards to consider environmental matters holistically rather than narrowly focus on net zero.

On digital finance, he explained the Commission’s work to help make Guernsey one of Europe’s most hospitable jurisdictions: 

• a consultation paper to be launched in December on regulatory changes to support tokenisation, stablecoins and digital asset custody;
• encouragement for widespread adoption of AI across all financial sectors, warning that failure to automate manual processes risks obsolescence; and
• rebranding of the innovation “soundbox” as a fully-fledged sandbox complimented by an enhanced concierge service for firms wishing to launch innovative products or services.

Concluding on financial stability, he argued that long-term stability is best achieved through sustained economic growth rather than “the stability of the graveyard”. Regulators who seek to eliminate all risk ultimately make jurisdictions poorer and less resilient.

“We have no interest in simply guarding souls waiting to cross the River Styx. We want to be the regulator of the alive, the innovating, the growing and the prospering,” he noted, commenting on the incentives for public servants to adopt risk adverse approaches and how this can inhibit growth and prosperity.

A copy of the speech is available here, and a copy of the PowerPoint slides can be found here.