The Guernsey Financial Services Commission has published a feedback paper following a consultation.
As a result of industry comments, it made a number of changes to its draft rules and guidance. The new law is intended to ‘strike a balance between proportionate regulation and the protection of customers without unduly restricting the market and maintaining access to services from a variety of providers’.
GFSC director-general William Mason said that the new law introduced ‘reasonable levels of consumer credit protection to the Bailiwick’s residents for the first time’.
It has several parts, including provision for the regulation of fintech innovations around electronic platforms and virtual assets service providers such as crypto exchanges.
‘These are areas where reputable entrepreneurs require licensing to distinguish themselves from unregulated speculators and promoters. Our new regime should allow high quality fintech innovators to run their businesses from Guernsey,’ said Mr Mason.
Once the law comes into effect in full on 1 July 2023, firms carrying on business regulated by the law will need to be licensed and will need to follow the rules set out by the commission.
Licence applications can now be submitted to the commission. Applicants are encouraged to apply early and 50% discount on the application fee is being offered until the end of March.
The commission is expecting a considerable number of new licence applications and is aiming to process all applications received by 31 March by 1 July.
The Lending, Credit and Finance Law
THE structure of the new licensing scheme for providers falls into four broad categories – consumer credit and home finance; financial firm businesses; virtual asset service providers and fintech platforms, including peer-to-peer and crowdfunding platforms.
The commission said that its consultation exercise drew an ‘excellent’ response across a range of stakeholders, including the Guernsey Investment & Funds Association, Guernsey Association of Trustees, fiduciary licensees, and representatives of the fintech sector.
It included 19 providers of credit, including brokers, retailers and motor traders – the largest sector to respond – and 17 banks and other lenders.
‘Most responses broadly supported the commission’s approach to the implementation of the law and were largely content with the rules and guidance,’ the GFSC said. ‘Most responses recognised that regulation to protect consumers was needed.’
It has made a number of changes to the draft rules and guidance which are designed to strike a balance between proportionate regulation and the protection of customers without unduly restricting the market and maintaining access to services from a variety of providers.
The commission has clarified how the law will apply to existing businesses.
From July, anyone who provides credit or has entered into an agreement which is a ‘regulated agreement’ will require a licence under the relevant part of the law, unless they have an exemption.