Consolidated text PROJET DE LOI ENTITLED. The Financial Services Commission (Bailiwick of Guernsey) Law, 1987 * [CONSOLIDATED TEXT] NOTE

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1 PROJET DE LOI ENTITLED The Financial Services Commission (Bailiwick of Guernsey) Law, 1987 * [CONSOLIDATED TEXT] NOTE This consolidated version of the enactment incorporates all amendments listed in the footnote below. It has been prepared for the Guernsey Law website and is believed to be accurate and up to date, but it is not authoritative and has no legal effect. No warranty is given that the text is free of errors and omissions, and no liability is accepted for any loss arising from its use. The authoritative text of the enactment and of the amending instruments may be obtained from Her Majesty's Greffier, Royal Court House, Guernsey, GY1 2PB. * Ordres en Conseil Vol. XXX, p. 243; as amended by the Uniform Scale of Fines (Bailiwick of Guernsey) Law, 1989 (Ordres en Conseil Vol. XXXI, p. 278); the States Committees (Constitution and Amendment) (Guernsey) Law, 1991 (No. XX of 1991, Ordres en Conseil Vol. XXXII, p. 471); the Banking Supervision (Bailiwick of Guernsey) Law, 1994 (No. XIII of 1994, Ordres en Conseil Vol. XXV(1), p. 271); the Protection of Investors (Amendment) (Bailiwick of Guernsey) Law, 1997 (No. II of 1997, Ordres en Conseil Vol. XXXVII, p. 24); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002 (No. XVII of 2002, Ordres en Conseil Vol. XLII(2), p. 644); the Insurance Business (Bailiwick of Guernsey) Law, 2002 (No. XXI of 2002, Ordres en Conseil Vol. XLII(2), p. 766); the Public Trustee (Bailiwick of Guernsey) Law, 2002 (No. III of 2003, Ordres en Conseil Vol. XLIII(1), p. 49); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2003 (No. XXII of 2003, Ordres en Conseil Vol. XLIII(2), p. 574); the Financial Services Commission (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008 (No. XIX of 2008); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2008 (No. XXIII of 2008); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) (No. 2) Law, 2008 (No. XXIV of 2008); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2010 (No. XIX of 2010); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2012 (No. III of 2013); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2016 (No. ** of 2017); the Financial Services Ombudsman (Bailiwick of Guernsey) Law, 2014 (No. I of 2015); the Machinery of Government (Transfer of Functions) (Guernsey) Ordinance, 2003 (No. XXXIII of 2003, Recueil d' Ordonnances Tome XXIX, p. 406); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Ordinance, 2005 (No. XXXIV of 2005, Recueil d' Ordonnances Tome XXX, p. 722); the Guernsey Financial Services Commission (Transfer of Functions) (Fees) (Bailiwick of Guernsey) Ordinance, 2015 (No. XII of 2015); the Sark General Purposes and Advisory and Finance and Commerce Committees (Transfer of Functions) (Guernsey) Ordinance, 2015 (No. XX of 2015); the Sark General Purposes and Finance Committee (Transfer of Functions) (Guernsey) Ordinance, 2015 (No. XXXIX of 2015); the Single Euro Payments Area (Guernsey) Ordinance, 2016 (No. II of 2016); the Organisation of States' Affairs (Transfer of Functions) Ordinance, 2016 (No. IX of 2016); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Ordinance, 2016 (No. XXII of 2016); the Transfer of Funds (Alderney) Ordinance, 2017 (Alderney Ordinance No. III of 2017); the Transfer of Funds (Guernsey) Ordinance, 2017 (No. ** of 2017); the Transfer of Funds (Sark) Ordinance, 2017 (Sark Ordinance No. X of 2017); the Disclosure (Financial Services Commission) (Bailiwick of Guernsey) (Amendment) Ordinance, 2017 (No. XIX of 2017); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Regulations, 2009 (G.S.I. No. 29 of 2009); the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Regulations, 2017 (G.S.I. No. 49 of 2017). See also the Deputy Bailiff (Guernsey) Law, 1969 (Ordres en Conseil Vol. XXII, p. 122); the Sark General Purposes and Finance Committee (Transfer of Functions) (Guernsey) Ordinance, 2009 (No. XXXIII of 2009, Recueil d' Ordonnances Tome XXXIII, p. 617); the Financial Services Commission (Administrative Financial Penalties) (Bailiwick of Guernsey) Regulations, 2016 (G.S.I. No. 87 of 2016). This Law is prospectively amended by the Beneficial Ownership of Legal Persons (Guernsey) Law, 2017 (No. VI of 2017). States of Guernsey 1

2 States of Guernsey States of Guernsey 2

3 PROJET DE LOI ENTITLED The Financial Services Commission (Bailiwick of Guernsey) Law, 1987 ARRANGEMENT OF SECTIONS Establishment and functions of the Commission 1. The Guernsey Financial Services Commission. 2. Functions of the Commission. 3. Transfer of statutory functions to the Commission. The Commission and the States 4. Status of the Commission. 5. Provision of information to the Policy & Resources Committee. 6. Annual report. 7. Guidance and directions. Powers of the Commission 8. General powers of the Commission. 9. Contractual powers. 10. Powers as to property. 11. Appointment, remuneration etc. of staff. 11A. Publication of regulations, etc. General enforcement powers of the Commission 11B. Disqualification orders against auditors. 11C. Public statements. 11D. Discretionary financial penalties. 11E. Notice of intended decision. 11F. Notice of decision. 11G. Disclosure of reasons for decisions. 11H. Appeals against decisions. 11I. Administrative financial penalties. 11J. Powers under prescribed Laws not affected. 12. The Commission' s funds. 13. Fees and charges Grants to the Commission. Borrowing by the Commission. 16. Investment of surplus funds. Financial provisions States of Guernsey 3

4 17. Exemption from income tax. 18. Accounts, audit, internal controls and corporate governance. Administrative provisions 19. Delegation to members and officers. 20. Execution of documents. 21. Confidentiality. 21A. Co-operation with foreign authorities. 21B. Investigations in support of foreign authorities. 21C. Site visits. 21D. Information from third parties. 21E. Duties of confidentiality not broken by disclosure to regulators. Miscellaneous and general 22. Liability of members, officers and servants. 23. Power of the States to exclude liability. 24. Interpretation. 25. General provisions as to subordinate legislation. 26. Transitional provisions and savings. 27. Citation. 28. Commencement. SCHEDULE 1 SCHEDULE 2 SCHEDULE 3 The Guernsey Financial Services Commission. Amendments to other enactments. Transitional provisions and savings. States of Guernsey 4

5 PROJET DE LOI ENTITLED The Financial Services Commission (Bailiwick of Guernsey) Law, 1987 THE STATES, in pursuance of their Resolution of the 1 st day of May 1986, have approved the following provisions which, subject to the Sanction of Her Most Excellent Majesty in Council, shall have force of law in the Bailiwick of Guernsey. Establishment and functions of the Commission The Guernsey Financial Services Commission. 1. (1) There is established by, and in accordance with the provisions of, this Law a body to be known as the Guernsey Financial Services Commission. (2) The Commission is a body corporate with perpetual succession and a common seal, and is capable of suing and being sued in its corporate name. (3) Schedule 1 has effect as respects the constitution and proceedings of the Commission. NOTE The following cases have referred to this Law: Amazing Global Technologies Limited and Kingston Management (Guernsey) Limited (2012) (Unreported, Royal Court, 11th June) (Guernsey Judgment No. 29/2012); Bordeaux Services (Guernsey) Limited et al v. The Guernsey Financial Services Commission (2016) (Unreported, Royal Court, 11th May) (Guernsey Judgment No 18/2016); David John Merrien v. Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) (2016) (Unreported, Royal Court, (250915) 9th June) (Guernsey Judgment No 23/2016); Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) v. David John Merrien (2016) (Unreported, Court of Appeal, 17th March) (Guernsey Judgment No 24/2016). States of Guernsey 5

6 Functions of the Commission. 2. (1) The functions of the Commission are referred to in this Law as "general functions" and "statutory functions". (2) The general functions of the Commission are to take such steps as the Commission considers necessary or expedient for the [...] effective supervision of finance business in the Bailiwick, to provide for the Committee, or the [Policy and Finance Committee] of the States of Alderney [or the [Policy and Performance Committee] of the Chief Pleas of Sark when either of such committees] so requests, reports, advice and assistance on any matter connected with finance business, (c) to prepare and submit to the Committee or the [Policy and Finance Committee] of the States of Alderney [or the [Policy and Performance Committee] of the Chief Pleas of Sark], either at the request of one of those committees or of its own motion, recommendations and schemes for the statutory regulation of finance business and generally for the revision of legislation appertaining to companies and other forms of business undertakings, [(d) the countering of financial crime and of the financing of terrorism; and in this paragraph "financial crime" includes any offence involving (i) fraud or dishonesty, (ii) misconduct in, or misuse of information States of Guernsey 6

7 relating to, a financial market, or (iii) handling the proceeds of crime, and "offence" includes an act or omission which would be an offence if it had taken place in the Bailiwick,] [[(e)] to take such steps as the Commission considers necessary or expedient for (i) maintaining confidence in the Bailiwick' s financial services sector, and (ii) the safety, soundness and integrity of that part of the Bailiwick' s financial services sector for which it has supervisory responsibility, [ ] [(ea) to enable (i) the Office of the Financial Service Ombudsman (established by section 1 of the Financial Services Ombudsman (Bailiwick of Guernsey) Law, 2014), or (ii) any person to whom it has delegated a function or power, to carry out its functions or exercise any of its powers, including but not limited to the provision of information which would be confidential for the purposes of section 21, or any other provision, of this Law, or of any other enactment.] (f) all such other functions as the States may by Resolution assign to the Commission.] States of Guernsey 7

8 [(2A) [ The exercise of the general functions of the Commission may include], without limitation the establishment and ongoing support of bodies and organisations the functions of which include or are important or relevant to (i)... (ii)... (iii) the protection of the public, or (iv) the protection and enhancement of the reputation of the Bailiwick as a financial centre, the approaching, at the request of third parties or otherwise, of persons engaged or otherwise connected with that sector of the Bailiwick economy which carries on finance business for statistical information for analysis and, where appropriate, for onward transmission to third parties, (c) the provision to the Committee, the Policy and Finance Committee of the States of Alderney and the [Policy and Performance Committee] of the Chief Pleas of Sark, when any of such committees so requests, and subject to the agreement of the Commission, of statistical information relating to that sector of the Bailiwick economy which carries on finance business.] [ (2AB) Notwithstanding the repeal on the 28 th October, 2008 by the Financial Services Commission (Amendment) (Bailiwick of Guernsey) Law, 2008 States of Guernsey 8

9 of subparagraphs (i) and (ii) of subsection (2A), the Commission shall be deemed, between that date and the 23 rd November, 2010 (when the States resolved pursuant to section 2(2)(f) that the general functions of the Commission shall include the taking of such steps as the Commission considers necessary or expedient for participating in the ownership and governance of the GTA University Centre, including (without limitation) to act as protector of the charitable trust declared on the 6 th June, 1996 by which the Finance Training Agency Trust was constituted, and to fund and support the GTA University Centre) to have had power to perform those functions in all respects as if the said subparagraphs (i) and (ii) had not been repealed.] [(2B) The Committee may, after consultation with the Commission, make (and subsequently amend and repeal) regulations requiring the provision by persons described in subsection (2A) of statistical information: and any such regulations may create offences and prescribe penalties for contraventions or failures to comply with the regulations.] (3) The statutory functions of the Commission are the functions transferred to it by section 3, any functions assigned to it by or under any enactment [...], (c) to provide for the Committee, when the Committee so requests, reports, advice and assistance in relation to the exercise of the Committee' s functions under any enactment relating to finance business. (4) In the exercise of its [...] functions the Commission may take into account any matter which it considers appropriate, but shall in particular have regard to [ the protection of the public interest, including] the protection of the public against financial loss due to dishonesty, incompetence or malpractice by persons States of Guernsey 9

10 carrying on finance business, and the protection and enhancement of the reputation of the Bailiwick as a financial centre. NOTES In section 2, the words omitted in square brackets in paragraph of subsection (2) were repealed by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2008, section 2, with effect from 28th October, 2008; the words in the first and second pairs of square brackets in paragraph of subsection (2) were substituted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002, respectively section 1(i) and section 1(ii), with effect from 1st November, 2002; the words "Policy and Performance Committee" in square brackets, wherever occurring, were substituted by the Sark General Purposes and Finance Committee (Transfer of Functions) (Guernsey) Ordinance, 2015, section 3, with effect from 25th June, 2015; 1 the words in the first pair of square brackets in paragraph (c) of subsection (2) were substituted, and the words in the second pair of square brackets therein were inserted, by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002, respectively section 1(i) and section 1(ii), with effect from 1st November, 2002; paragraph (d) of subsection (2) was inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002, section 1(c), with effect from 1st November, 2002; paragraph (e) of subsection (2) (which paragraph was originally relettered, by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002, section 1(c), with effect from 1st November, 2002) was substituted, and paragraph (f) of subsection (2) was inserted, by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) (No. 2) Law, 2008, section 2, with effect from 28th October, 2008; paragraph (ea) of subsection (2) (not, as shown incorrectly in the printed version of the 2014 Law, subsection (1)) was inserted and the word omitted in square brackets in paragraph (e)(ii) of subsection (2) (not, as shown incorrectly in the printed version of the 2014 Law, subsection (1)) was repealed by the Financial Services Ombudsman (Bailiwick of Guernsey) Law, 2014, section 25(2), respectively paragraph and paragraph, with effect from 30th January, 2015; subsection (2A) and subsection (2B) were inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002, section 1(d), with effect from 1st November, 2002; the words in the first pair of square brackets within subsection (2A) States of Guernsey 10

11 were substituted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2008, section 3, with effect from 28th October, 2008; sub-paragraph (i) and sub-paragraph (ii) of paragraph of subsection (2A) were repealed by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2008, section 3, with effect from 28th October, 2008; subsection (2AB) was inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2012, section 2, with effect from 7th January, 2013; the words omitted in square brackets in, first, paragraph of subsection (3) and, second, subsection (4) were repealed by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002, respectively section 1(e) and section 1(f), with effect from 1st November, 2002; the words in square brackets in paragraph of subsection (4) were inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2002, section 1(g), with effect from 1st November, The following cases have referred to section 2: Amazing Global Technologies Limited and Kingston Management (Guernsey) Limited (2012) (Unreported, Royal Court, 11th June) (Guernsey Judgment No. 29/2012); Bordeaux Services (Guernsey) Limited et al v. The Guernsey Financial Services Commission (2016) (Unreported, Royal Court, 11th May) (Guernsey Judgment No 18/2016); David John Merrien v. Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) (2016) (Unreported, Royal Court, (250915) 9th June) (Guernsey Judgment No 23/2016); Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) v. David John Merrien (2016) (Unreported, Court of Appeal, 17th March) (Guernsey Judgment No 24/2016). The functions, rights and liabilities of the Sark General Purposes and Finance Committee and of its Chairman arising under or by virtue of this Law were transferred to and vested in, respectively, the Sark Policy and Performance Committee and its Chairman by the Sark General Purposes and Finance Committee (Transfer of Functions) (Guernsey) Ordinance, 2015, section 1, with effect from 25th June, 2015, subject to the savings and transitional provisions in section 2 of the 2015 Ordinance. 2 Transfer of statutory functions to the Commission. 3. (1) There are hereby transferred to the Commission the functions which would, apart from the provisions of this section, be exercisable by the Committee in relation to... States of Guernsey 11

12 the granting of permission to use a word or expression in the name, description or title under which a person carries on business, under Part III of the Protection of Depositors, Companies and Prevention of Fraud (Bailiwick of Guernsey) Law, 1969, (c) the registration of insurers and regulation of insurance business under the Insurance Business (Guernsey) Law, 1986 b, (d) the authorisation and regulation of insurance managers under the Insurance Business (Guernsey) Law, 1986, (e) the approval of authorised insurers for the purposes of (i) section 3 of the Road Traffic (Compulsory Third-Party Insurance) (Guernsey) Law, 1936 c, (ii) section 1 of the Surf-Riding (Longboards) (Compulsory Third-Party Insurance) (Guernsey) Law, 1969 d, (iii) section 1 of the Vessels and Speedboats (Compulsory Third-Party Insurance, Mooring Charges and Removal of Boats) (Guernsey) b Ordre en Conseil No. XIII of c Ordres en Conseil Vol. X, p. 388; Vol. XV, p. 43; Vol. XVIII, pp. 35 and 257; Vol. XX, p. 247; Vol. XXIII, p. 227; Vol. XXIV. p. 250; No. III of 1979; No. XVII of 1983; No. XIII of d Ordres en Conseil Vol. XXII, pp. 2 and 53; Vol. XXIV, p. 250; No. XIII of States of Guernsey 12

13 Law, 1972 e, (f) the authorisation of collective investment schemes under Part II of the Protection of Investors (Bailiwick of Guernsey) Law, 1987 f, the making of rules under section 20 of that Law, and the regulation of authorised collective investment schemes under that Law, (g) the licensing of persons to carry on restricted activities in connection with controlled investment business under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, the making of rules under Part III of that Law and the regulation of controlled investment business under that Law, but nothing in this Law derogates from any power of the Committee, or confers any power on the Commission, to make orders or regulations. (2) For the purpose of the exercise of the functions transferred to it by this section the Commission is subject to all of the duties previously imposed on the Committee by or under any enactment and has, subject to the provisions of this Law, all of the powers and privileges previously conferred on the Committee by or under any enactment. (3) The enactments specified in Schedule 2 have effect subject to the amendments mentioned in that Schedule. e NOTES In section 3, paragraph of subsection (1) was repealed by the Banking Supervision (Bailiwick of Guernsey) Law, 1994, section 57(d), with effect from 1st October, Ordres en Conseil Vol. XXIII, p. 515; Vol. XXIV, p. 250; Ordinance No. XXIV of 1981; Ordre en Conseil No. XIII of f Ordre en Conseil No. XX of States of Guernsey 13

14 The Insurance Business (Guernsey) Law, 1986 has since been repealed by the Insurance Business (Bailiwick of Guernsey) Law, 2002, section 100(1), Schedule 6, Part I, with effect from 5th November, 2002, subject to the savings in, first, section 102 of the 2002 Law and, second, section 78 of the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, The Commission and the States Status of the Commission. 4. (1) The Commission is not a committee of the States, or a servant or agent of the States, and, except to the extent that this Law or any other enactment otherwise provides is not subject to any rule of law relating to committees of the States, does not have any right or privilege vested in committees of the States. (2) The Commission may consult and co-operate with any committee of the States in relation to matters concerning finance business. Provision of information to the [Policy & Resources Committee]. 5. Without prejudice to the generality of section 4(2), but subject to section 21, the Commission shall, when requested in writing by the Committee, furnish the Committee, to the best of the Commission' s ability, with such information as the Committee may require in relation to finance business in the Bailiwick. NOTE In section 5, the words in square brackets in the marginal note thereto were substituted by the Organisation of States' Affairs (Transfer of Functions) Ordinance, 2016, section 2, Schedule 1, paragraph 10, with effect from 1st May, Annual report. States of Guernsey 14

15 6. (1) The Commission shall, as soon as practicable in each year, make a report to the Committee on its activities during the preceding year; and [the President] of the Committee shall, as soon as practicable, submit that report for consideration by the States. (2) The annual report made pursuant to subsection (1) may refer to any aspect of the Commission' s functions and in particular may set out or refer to any guidance given to the Commission under section 7(1) during the preceding year, and shall set out any directions given to the Commission under section 7(1) during the preceding year. NOTE In section 6, the words in square brackets were substituted by the Organisation of States' Affairs (Transfer of Functions) Ordinance, 2016, section 2, Schedule 1, paragraph 10, with effect from 1st May, Guidance and directions. 7. (1) The Committee may, after consulting the Commission, give to the Commission written guidance of a general character, and written directions of a general character, [ ] concerning the policies to be followed by the Commission in relation to the [...] supervision of finance business in the Bailiwick and the manner in which any function of the Commission is to be carried out. functions (2) It is the duty of the Commission, in carrying out any of its States of Guernsey 15

16 to take into account any guidance given under paragraph of subsection (1), and to act in accordance with any directions given under paragraph of subsection (1). [(2A) Any guidance or direction given under this section may be given only in the public interest, and not to influence particular cases, must not prejudice the operational independence of the Commission by prescribing the specific manner in which the Commission should carry out its supervisory functions, and (c) must be published: provided that the guidance or direction may come into effect as soon as it is given.] (3) It is hereby declared for the avoidance of doubt that the Commission shall not be deemed to have acted unreasonably or beyond its powers in the exercise of any of its statutory functions by reason only of the fact that it has complied with its duty under subsection (2). NOTES In section 7, the words omitted in square brackets in paragraph of subsection (1) were repealed by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2008, section 4, with effect from 28th October, 2008; subsection (2A) was inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) (No. 2) Law, 2008, section 3, with effect from 28th October, In the printed version of this section, the carriage return in square brackets after "character" and preceding "concerning" in subsection (1) is shown, incorrectly, as omitted. States of Guernsey 16

17 Powers of the Commission General powers of the Commission. 8. (1) The Commission may do anything which appears to it to be conducive to the carrying out of its functions or to be incidental to their proper discharge. (2) Without prejudice to the generality of subsection (1) the Commission may, in connection with the carrying out of its general functions obtain information relating to the [supervision] of finance business in the Bailiwick and the [...] supervision of similar business carried on outside the Bailiwick, consult and seek the advice of such persons or bodies as it considers appropriate, (c) publish, in such manner as it considers appropriate, such information relating to its functions as it thinks fit, (d)... (3) This section relates only to the capacity of the Commission as a body corporate and does not authorise the disregard by the Commission of any enactment or rule of law. NOTES In section 8, the word in the first pair of square brackets in paragraph of subsection (2) was substituted, and the words omitted in the second pair of square brackets therein were repealed, by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2008, respectively section 5 and section 5, with effect from 28th October, 2008; States of Guernsey 17

18 paragraph (d) of subsection (2) was repealed by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2008, section 6, with effect from 28th October, The following case has referred to section 8: David John Merrien v. Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) (2016) (Unreported, Royal Court, (250915) 9th June) (Guernsey Judgment No 23/2016). Contractual powers. 9. (1) The Commission may enter into a contract, or make an arrangement, with any person for the provision of any service or any facility to facilitate the carrying out of the Commission' s functions, and may expend money generally for the proper purposes of the Commission. (2) The power conferred by subsection (1) includes power to open, operate and close banking accounts in the name of the Commission, to enter into, and pay any premium in respect of, contracts of insurance insuring the Commission, any member of the Commission, or any officer or servant of the Commission against (i) any risk to the Commission' s property, or (ii) any risk arising in connection with the carrying on of the Commission' s functions, including, without prejudice to the generality of the foregoing, the risk of a claim against the Commission in respect of any description of civil liability. Powers as to property. 10. (1) The Commission has all such powers in relation to the acquisition, use and disposal of property (whether realty or personalty) as are States of Guernsey 18

19 conducive to the carrying out of its functions. Commission may (2) Without prejudice to the generality of subsection (1), the acquire any land or building, or an interest in any land or building, by purchase, lease, sublease, easement or otherwise, deal generally with, and dispose of, by sale, lease, sublease, easement or otherwise, any land or building or an interest in any land or building, (c) acquire any furniture, equipment or other personalty, by purchase, hire, bailment or otherwise, (d) deal generally with, and dispose of, by sale, hire, bailment or otherwise, any furniture, equipment or other personalty. Appointment, remuneration etc. of staff. 11. (1) The Commission may appoint such officers and servants as it considers necessary for carrying out its functions[; and the most senior officer of the Commission shall have the title Director-General]. [(1A) The Director-General shall, subject to provisions of subsection (1B) and to the terms and conditions of his appointment as to resignation, hold office for a minimum term which shall be determined by the Commission. (1B) The Director-General may be dismissed from office by the Commission, but only on the following grounds that he has been absent from three consecutive meetings of the Commission without the Commission' s consent, States of Guernsey 19

20 that he has been declared insolvent, (c) that he is incapacitated by physical or mental illness, or (d) that he is otherwise unable or unfit to discharge the functions of Director-General, and if he is dismissed from office then public notice shall be given of the reasons for the dismissal. (1C) The power conferred by subsection (1A) to determine a minimum term of office may not be delegated to any of the Commission' s members or officers under section 19(1).] (2) An appointment under subsection (1) may be made on such terms as to remuneration, expenses, pensions and other conditions of service as the Commission thinks fit. (3) The Commission may establish and maintain such schemes, or make such other arrangements, as it thinks fit for the payment of pensions and other benefits in respect of its officers and servants. [(4) Without prejudice to the provisions of sections 22 and 23 (and of any Ordinance thereunder), the Commission shall take such steps as it considers necessary and reasonable to protect and indemnify its current and former members, officers and servants against any costs, claims, liabilities and proceedings arising from or in consequence of anything done or omitted to be done in the discharge or purported discharge by them of their functions as members, officers or, as the case may be, servants of the Commission.] NOTES In section 11, the words in square brackets in subsection (1) were inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, States of Guernsey 20

21 2002, section 1(h), with effect from 1st November, 2002; subsection (1A), subsection (1B) and subsection (1C) were inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2003, section 1(2), with effect from 14th August, 2003; subsection (4) was inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2003, section 1(3), with effect from 14th August, [Publication of regulations, etc. 11A. The Commission shall publish, in such manner as it considers best calculated to bring them to the attention of persons likely to be affected by them and the public in general, and subject to such charges (if any) as it may decide to levy to cover the costs of publication any regulations, rules, codes of conduct and guidance notes made by the Commission in pursuance of its functions, and any policies issued or applied by the Commission in respect of the granting, amendment, suspension and revocation by it, in pursuance of its statutory functions, of any licences, consents, registrations, permissions and authorisations.] NOTE Section 11A was inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2003, section 1(4), with effect from 14th August, [General enforcement powers of the Commission Disqualification orders against auditors. 11B. (1) Where the Commission is satisfied that a person who is or has been an auditor of a licensee has failed to comply with any duty imposed on him by States of Guernsey 21

22 or under the regulatory Laws, or is for any other reason unfit to be an auditor of a licensee (whether by reason of lacking the necessary skills or resources to carry out effectively his responsibilities as auditor or otherwise), or that for any other reason it is in the interests of the public or any class thereof to do so, the Commission may, subject to the provisions of section 11E, make an order (a "disqualification order") disqualifying him from being the auditor of any licensee or any particular class of licensee. (2) The Commission may, on the application of the person named in a disqualification order or of its own motion, and subject to the provisions of section 11E, vary or revoke a disqualification order. (3) A "licensee" means a person who holds or is deemed to hold a licence, consent, registration, permission or authorisation from the Commission under the regulatory Laws.] NOTE Section 11B (which was originally inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2003, section 1(4), with effect from 14th August, 2003) was repealed by the Financial Services Commission (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008, section 2, then inserted by section 3 of the same Law, with effect from 30th July, [Public statements. 11C. (1) Where the Commission is satisfied that a licensee, former licensee or relevant officer has contravened in a material particular a provision of, or made under, the prescribed Laws, or does not fulfil any of the minimum criteria for States of Guernsey 22

23 licensing specified in the regulatory Laws and applicable to him, it may, subject to the provisions of section 11E, publish a statement to that effect. (2) In deciding whether or not to publish a statement under this section and, if so, the terms thereof the Commission must take into consideration the following factors whether the contravention or non-fulfilment was brought to the attention of the Commission by the person concerned, the seriousness of the contravention or non-fulfilment, (c) whether or not the contravention or non-fulfilment was inadvertent, (d) what efforts, if any, have been made to rectify the contravention or non-fulfilment and to prevent a recurrence, (e) the potential financial consequences to the person concerned, and to third parties including customers and creditors of that person, of publishing a statement, and (f) the action taken by the Commission under this section in other cases. (3) A "relevant officer" means a person who when the contravention or non-fulfilment in question took place was a director, controller, partner, manager, general representative or authorised insurance representative of a licensee or former licensee.] States of Guernsey 23

24 NOTES Section 11C was inserted by the Financial Services Commission (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008, section 3, with effect from 30th July, The following case has referred to section 11C: Bordeaux Services (Guernsey) Limited et al v. The Guernsey Financial Services Commission (2016) (Unreported, Royal Court, 11th May) (Guernsey Judgment No 18/2016). [Discretionary financial penalties. 11D. (1) Where the Commission is satisfied that a licensee, former licensee or relevant officer has contravened in a material particular a provision of, or made under, the prescribed Laws, or does not fulfil any of the minimum criteria for licensing specified in the regulatory Laws and applicable to him, it may, subject to the provisions of section 11E, impose on him a penalty in respect of the contravention or non-fulfilment of such amount [not exceeding the relevant sum calculated in accordance with subsections (1A) and (1B)] as it considers appropriate. [ (1A) The relevant sum is in the case of a licensee or former licensee, but not a personal fiduciary licensee or former such licensee, 4,000,000, provided that any penalty of more than 300,000 shall not exceed 10% of the turnover of the licensee or former licensee in question, or in the case of a personal fiduciary licensee or former such licensee or a relevant officer, 400,000, States of Guernsey 24

25 and in this section the expression "personal fiduciary licensee" means the holder of a personal fiduciary licence within the meaning of the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, (1B) The [Policy & Resources Committee] may, after consultation with the Commission, the Policy and Finance Committee of the States of Alderney and the Policy and Performance Committee of the Chief Pleas of Sark, by regulation make such provision as it thinks fit for the purpose of carrying this section into effect including, without limitation, provision in respect of the meaning of the expressions "turnover" and "emoluments" for the purposes of this section, including without limitation the determination and basis of calculation thereof, and the banding of penalties under this section within the relevant sum calculated in accordance with subsections (1A) and (1B) and the criteria subject to which each band is to be applied, taking into consideration the factors set out in paragraphs to (g) of subsection (2). (1C) The Commission shall issue and publish, in such manner as it considers best calculated to bring it to the attention of persons likely to be affected by it and the public in general, guidance as to its general approach to enforcement. (1D) The States may by Ordinance amend this section.] (2) In deciding whether or not to impose a penalty under this section and, if so, the amount thereof the Commission must take into consideration the following factors whether the contravention or non-fulfilment was brought to the attention of the Commission by the person concerned, States of Guernsey 25

26 the seriousness of the contravention or non-fulfilment, (c) whether or not the contravention or non-fulfilment was inadvertent, (d) what efforts, if any, have been made to rectify the contravention or non-fulfilment and to prevent a recurrence, (e) the potential financial consequences to the person concerned, and to third parties including customers and creditors of that person, of imposing a penalty, and (f) the penalties imposed by the Commission in other cases. (3) Where a penalty is imposed on a person under this section, the Commission may publish his name and the amount of the penalty. (4) Any sums which the Commission receives in any calendar year in respect of penalties imposed under this section on persons who are licensees, former licensees or relevant officers for the purposes of a particular regulatory Law shall be taken into account by the Commission in determining the fees payable to it pursuant to that regulatory Law in the following calendar year or, if that is not reasonably practicable, in the subsequent calendar year.] NOTES Section 11D was inserted by the Financial Services Commission (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008, section 3, with effect from 30th July, In section 11D, first, the words in square brackets in subsection (1) were substituted, second, subsection (1A), subsection (1B), subsection (1C) and subsection (1D), third, paragraph (g) of subsection (2) and, fourth, States of Guernsey 26

27 subsection (6) were inserted by the Financial Services Commission (Bailiwick of Guernsey) (Amendment) Law, 2016, respectively section 2, section 3, section 4 and section 5, with effect from 13th November, 2017; the words "Policy & Resources Committee" in square brackets, wherever occurring, were substituted in accordance with the provisions of the Organisation of States' Affairs (Transfer of Functions) Ordinance, 2016, section 2, Schedule 1, paragraph 10, with effect from 1st May, The following cases have referred to section 11D: Bordeaux Services (Guernsey) Limited et al v. The Guernsey Financial Services Commission (2016) (Unreported, Royal Court, 11th May) (Guernsey Judgment No 18/2016); David John Merrien v. Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) (2016) (Unreported, Royal Court, (250915) 9th June) (Guernsey Judgment No 23/2016); Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) v. David John Merrien (2016) (Unreported, Court of Appeal, 17th March) (Guernsey Judgment No 24/2016). [Notice of intended decision. 11E. (1) Where the Commission proposes to make a decision in respect of which a right of appeal is conferred by section 11H it shall serve on the person concerned a notice in writing stating that the Commission is proposing to make the decision, stating the terms of, and the grounds for, the proposed decision, (c) stating that he may, within a period of 28 days beginning on the date of the notice, make written or oral representations to the Commission in respect of the proposed decision in such manner as the Commission may from time to time determine, and (d) giving particulars of the right of appeal which would be exercisable under section 11H if the Commission were to make the decision. States of Guernsey 27

28 (2) The Commission shall consider any representations made in response to a notice served under subsection (1) before giving further consideration to the proposed decision. (3) The period of 28 days mentioned in subsection (1)(c) may be reduced in any case in which the Commission considers it necessary to do so in the interests of the public or any class thereof, or any particular persons, or the reputation of the Bailiwick as a finance centre. If by reason of those interests the Commission considers that the decision in question needs to be taken immediately as a matter of urgency then the procedure prescribed in this section may be dispensed with altogether. (4) For the avoidance of doubt a notice about a proposal to publish a statement must set out the terms of the statement, and a notice about a proposal to impose a financial penalty must state the amount of the penalty.] NOTE Section 11E was inserted by the Financial Services Commission (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008, section 3, with effect from 30th July, [Notice of decision. 11F. Where the Commission decides (having taken into account, where appropriate, any representations made by the person concerned) to make a decision in respect of which a right of appeal is conferred by section 11H it shall serve on the person concerned notice in writing of the decision stating the terms of, and the grounds for, the decision, and States of Guernsey 28

29 giving particulars of the right of appeal conferred by section 11H.] NOTE Section 11F was inserted by the Financial Services Commission (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008, section 3, with effect from 30th July, [Disclosure of reasons for decisions. 11G. (1) Where the Commission makes a decision in respect of which a right of appeal is conferred by section 11H, the person concerned may, whether or not he institutes an appeal, but subject to the provisions of subsection (2), require the Commission to furnish him with a written statement of the reasons for the decision. (2) Subsection (1) does not require the Commission to specify any reason which would in its opinion involve the disclosure of confidential information the disclosure of which would be prejudicial to a criminal or regulatory investigation (whether in the Bailiwick or elsewhere). co-operation or relations with investigatory, regulatory or prosecuting authorities in any other place. or (c) a third party (wherever situated). (3) Where, pursuant to subsection (2), the Commission omits any matter from a statement of reasons, it shall inform the person concerned of the fact that there has been such an omission and give particulars of the right of appeal conferred by section 11H.] NOTE Section 11G was inserted by the Financial Services Commission (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008, section 3, with States of Guernsey 29

30 effect from 30th July, [Appeals against decisions. 11H. (1) A person aggrieved by a decision of the Commission to make or vary a disqualification order against him under section 11B, to refuse to vary or revoke a disqualification order made against him under section 11B, (c) to publish a statement relating to him under section 11C, (d) to impose a financial penalty on him under section 11D, (e) to publish his name under section 11D(3) as a person on whom such a penalty has been imposed, or (f) to omit, pursuant to section 11G(2), any matter from a statement of reasons given to him, may appeal to the Court against the decision. (2) The grounds of an appeal under this section are that the decision was ultra vires or there was some other error of law, the decision was unreasonable, (c) the decision was made in bad faith, (d) there was a lack of proportionality, or States of Guernsey 30

31 (e) there was a material error as to the facts or as to the procedure. (3) An appeal under this section shall be instituted within a period of 28 days immediately following the date of the notice of the Commission' s decision, and by summons served on the Chairman of the Commission stating the grounds and material facts on which the appellant relies. (4) The Commission may, where an appeal under this section has been instituted, apply to the Court, by summons served on the appellant, for an order that the appeal shall be dismissed for want of prosecution; and on hearing the application the Court may dismiss the appeal or dismiss the application (in either case on such terms and conditions as the Court may direct), or make such other order as the Court considers just. The provisions of this subsection are without prejudice to the inherent powers of the Court or to the provisions of rule 52 of the Royal Court Civil Rules, (5) On an appeal under this section the Court may set the decision of the Commission aside and, if the Court considers it appropriate to do so, remit the matter to the Commission with such directions as the Court thinks fit, or confirm the decision, in whole or in part. States of Guernsey 31

32 (6) On an appeal under this section against a decision of the Commission the Court may, on the application of the appellant, and on such terms as the Court thinks just, suspend or modify the operation of the decision pending the determination of the appeal. 11E(3). This subsection is without prejudice to the operation of section (7) An appeal against a decision to publish a statement in respect of a person shall be held in private unless the parties agree that all or part of the hearing should be held in public, or the Court so orders. (8) Where an appeal against a decision to publish a statement under section 11C or 11D(3) is upheld the Commission shall, if the appellant so requests, publish a statement of that fact. This subsection applies where pursuant to section 11E(3) the appellant did not have an opportunity to make representations before the decision was made. (9) An appeal from a decision of the Court under this section lies to the Court of Appeal on a question of law. (10) In this section "the Court" means the Royal Court sitting as an Ordinary Court, constituted by the Bailiff sitting unaccompanied by the Jurats; and for the purposes of an appeal under this section the Court may appoint one or more assessors to assist it in the determination of any matter before it.] NOTES Section 11H was inserted by the Financial Services Commission States of Guernsey 32

33 (Enforcement Powers) (Bailiwick of Guernsey) Law, 2008, section 3, with effect from 30th July, The following cases have referred to section 11H: Bordeaux Services (Guernsey) Limited et al v. The Guernsey Financial Services Commission (2016) (Unreported, Royal Court, 11th May) (Guernsey Judgment No 18/2016); David John Merrien v. Cees Schrauwers (Chairman of the Guernsey Financial Services Commission) (2016) (Unreported, Royal Court, (250915) 9th June) (Guernsey Judgment No 23/2016). In accordance with the provisions of the Financial Services Commission (Administrative Financial Penalties) (Bailiwick of Guernsey) Regulations, 2016, regulation 5, with effect from 1st January, 2017, the provisions of this section apply in relation to a decision of the Commission to impose a late penalty, as they apply in relation to a decision of the Commission described in subsection (1) of this section, except that the sole ground of appeal is that the decision was wrong. In accordance with the provisions of the Deputy Bailiff (Guernsey) Law, 1969, section 5(4), with effect from 9th September, 1969, in the event of the Deputy Bailiff discharging any functions or exercising any powers appertaining to the office of Bailiff which he is authorised to discharge or exercise under or by virtue of the 1969 Law, the provisions contained herein relating to the discharge of such functions or the exercise of such powers shall have effect as if the reference herein to the Bailiff included a reference to the Deputy Bailiff. [Administrative financial penalties. 11I. (1) The Commission may, after consultation with the Committee, the Policy and Finance Committee of the States of Alderney and the [Policy and Performance Committee] of the Chief Pleas of Sark, by regulation make such provision as it thinks fit in respect of the charging of administrative financial penalties for the late payment of fees or charges required to be paid, or the late filing or delivery of documents or information required to be filed or delivered, by or under the regulatory Laws. (2) Regulations under this section States of Guernsey 33