Gibraltar Fund Industry Association Briefing Lonon June 2010


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Gibraltar Fund Industry Association Briefing Lonon June 2010

  1. 1. GFIA Briefing June 2010 “The Regulatory Environment” Marcus Killick Chief Executive Officer Financial Services Commission
  2. 2. Why do we exist? " To supervise and regulate Gibraltar’s financial services to protect the public and enhance Gibraltar as a quality financial centre."
  3. 3. Our statutory objectives <ul><li>To promote market confidence; </li></ul><ul><li>The reduction of systemic risk; </li></ul><ul><li>To promote public awareness; </li></ul><ul><li>To protect the reputation of Gibraltar; </li></ul><ul><li>The protection of consumers; and </li></ul><ul><li>The reduction of financial crime. </li></ul>
  4. 4. Areas under FSC supervision <ul><ul><li>Banking </li></ul></ul><ul><ul><li>Insurance </li></ul></ul><ul><ul><li>Investments (including mutual funds) </li></ul></ul><ul><ul><li>Company Management </li></ul></ul><ul><ul><li>Professional Trusteeship </li></ul></ul><ul><ul><li>Pension Trustees </li></ul></ul><ul><ul><li>Money transmission services </li></ul></ul><ul><ul><li>Bureau de change </li></ul></ul><ul><ul><li>Auditors </li></ul></ul>
  5. 5. Investment Services <ul><li>There are currently 37 firms that hold an authorisation under the Financial Services (Markets in Financial Instruments) Act 2006 (MiFID). All of these firms are required to participate in the Gibraltar Investor Compensation Scheme (GICS) </li></ul><ul><li>Each MiFID authorisation is accompanied by a permitted business schedule which lists the core activities and ancillary services that can be offered by the authorised firm. </li></ul><ul><li>Depending on the type of activity offered, a MiFID authorisation would be classified as a Category 1, 2 or 3 firm* (Category 1 firms being permitted to deal as principal having more onerous requirements). Each of these would carry differing licensing fees and differing levels of regulatory reporting and monitoring. </li></ul><ul><li>* Defined in the interpretation section of the Financial Services (Fees) Regulations 2010 </li></ul>
  6. 6. Funds <ul><li>There are a number of different fund structures available in Gibraltar however the most popular is that of the Experienced Investor Fund (EIF) which came into effect during 2005. This is a fund available only to experienced investors therefore is not a retail fund, and can not be offered to the general public. </li></ul>
  7. 7. Growth of Gibraltar as a specialised fund centre
  8. 8. FSC and Transparency <ul><li>Regulatory transparency is key to trust </li></ul><ul><li>FSC has placed a line by line assessment of its compliance with the “Combined Code of Corporate Governance “on its website </li></ul><ul><li>All external assessments and the FSC’s response/action is on our website </li></ul><ul><li>All policy/consultation papers contain the objective we are trying to achieve as well as our proposals </li></ul><ul><li>Quarterly publication of adherence to service standards </li></ul>
  9. 9. International standards <ul><li>FSC seeks to comply with relevant international standards established in; </li></ul><ul><ul><li>Insurance </li></ul></ul><ul><ul><li>Banking </li></ul></ul><ul><ul><li>Investments </li></ul></ul><ul><ul><li>Anti Money laundering </li></ul></ul><ul><li>We are members of; </li></ul><ul><ul><li>International Association of Insurance Supervisors </li></ul></ul><ul><ul><li>Offshore Group of Insurance Supervisors </li></ul></ul><ul><ul><li>International Organisation of Securities Commissions </li></ul></ul><ul><li>The FSC is required by statute to advise the Minister if, at any time, it considers it to be unable to supervise and regulate financial services business carried on in or from Gibraltar to internationally accepted standards </li></ul><ul><li>Our adherence to these standards is independently verified </li></ul>
  10. 10. International Standards EU Requirements <ul><li>As an EU jurisdiction we are required to apply all Directives and Regulations made under the Financial Services Action Plan </li></ul><ul><li>This gives us full passporting rights throughout the EU and, via the Gibraltar Order, the UK </li></ul><ul><li>In respect of EU legislation the FSC is required by statue to establish and implement standards and supervisory practices which match the standards and supervisory practices governing the provision of financial services within the United Kingdom. </li></ul>
  11. 11. Independent reviews <ul><li>Reviews undertaken include: </li></ul><ul><ul><li>First statutory review 1998 </li></ul></ul><ul><ul><li>Second Statutory review 1999 </li></ul></ul><ul><ul><li>IMF Assessment 2001 </li></ul></ul><ul><ul><li>Assessment against FATF standards 2002 </li></ul></ul><ul><ul><li>Third Statutory review 2004 </li></ul></ul><ul><ul><li>Second IMF assessment 2006 </li></ul></ul>
  12. 12. IMF Findings <ul><li>“ Gibraltar has a well-regulated financial sector” </li></ul><ul><li>The assessment found a high standard of compliance with the Basel Core Principles and the Insurance Core Principles. </li></ul><ul><li>The reputation of Gibraltar as a financial centre will depend on maintaining the independence of the Financial Services Commission (FSC). </li></ul><ul><li>In the area of Banking Supervision Gibraltar was fully compliant with 27 and largely compliant with 3 out of the 30 applicable international standards.  This was matched with 24 observed and 3 largely observed out of 28 applicable standards for Insurance Supervision. </li></ul><ul><li>These levels of compliance are amongst the highest achieved in an IMF review of any country. </li></ul>
  13. 13. The year ahead <ul><li>Impact of Global economic crisis and local regulatory response </li></ul><ul><li>G20 and EU post credit crisis developments. Supervisory Colleges etc </li></ul><ul><li>UCITS IV </li></ul><ul><li>AIFM </li></ul><ul><li>Fund regime changes </li></ul><ul><li>Implementation of revisions to our onsite and offsite monitoring programmes </li></ul>
  14. 14. The End <ul><li>For further Information please contact </li></ul><ul><li>[email_address] </li></ul><ul><li>00 350 20040283 </li></ul>