States hands GFSC powers to set fees

Deputies backed an ordinance presented by the Policy & Resources Committee to return that responsibility to the Guernsey Financial Services Commission – less than 10 years after taking it away.

Leading the proposal, treasury lead Mark Helyar said he would ordinarily be wary of giving such power to the regulator because of the risk of fee increases chasing away ‘the goose which is currently laying our golden eggs’.

However, he said the move was made necessary by the imminent inspection by the European anti-money laundering agency Moneyval.

‘We’re well advised by the fact that we have somebody very close to that organisation working for the States that on this occasion the inspection is going to be significantly more rigorous,’ said Deputy Helyar.

He insisted deputies must ‘do everything we possibly can to ensure the best possible outcomes we can from Moneyval – and one of the points of the inspection will be the independence of the GFSC’.

Four deputies voted against the proposal, including former Treasury & Resources minister Gavin St Pier.

He said Deputy Helyar had set out a ‘deeply flawed position’ by claiming the Assembly would have the ability to claw back fee-setting powers at a later date.

‘If this Assembly ever attempts to annul the fee-making regulations made by the commission, then it will be said that we are undermining the independence of the commission to raise the fees it needs in that given year,’ said Deputy St Pier.

He argued that international expectations were met adequately by the existing arrangement under which fees recommended by the GFSC after consultation are then approved by P&R.

P&R president Peter Ferbrache highlighted the importance of the finance industry. He said it accounted for 40% of the economy directly, with another 20% incidental to it. And he urged deputies to take note of the advice received from the unnamed States employee, who he said was ‘effectively, in appropriate circumstances, an assessor of Monevyal’.

He warned that defeating the proposal would be an indication that the States did not trust the regulator.

Another former T&R minister, Lyndon Trott, backed the proposal. He pointed out that if the UK government was unhappy with the performance of the Bank of England it had a mechanism by which to replace its governor.

‘Who regulates the regulator?’ he asked, rhetorically.

‘We do, and it’s a message that we should not be embarrassed to repeat to Moneyval when they visit.’

The ordinance was approved by 31 votes to four with two abstentions.