GAT News April 2017

Industry News April 2017

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GAT AGM &  Industry Event On Beneficial Ownership

Please save the date & time for the GAT AGM on 7th June 2017 at 5pm. Venue to be confirmed shortly.  Both Members and non-Members are invited to attend. Copies of the Branch regulations are available on request and a formal notice with booking form will be sent under separate cover.

Following the AGM there will be an Industry Event presenting & discussing variety of current topics related to the forthcoming Beneficial Ownership Register:

  • The States Policy on Beneficial Ownership (Richard Walker, SoG Director of Financial Crime & Regulatory Policy)
  • The Security of the System (Colin Vaudin, SoG Chief Information & Communications Officer)
  • Population of the Register (Alan Bougourd, SoG Registry, Registrar)
  • Disclosure of Information (Adie Hale, Financial Intelligence Services, Senior Investigation Officer)
  • Supervision of Resident Agents (GFSC)

An official invite and booking form will be sent under separate cover.

 

Use of Corporate Directors – Update from the GFSC

A number of GAT members have sought clarification on the GFSC’s views on the use of Corporate Directors and in particular in the light of commentary released following regulatory and enforcement action last year (principally arising out of the Bordeaux and Marlborough Trustees cases).

The concern being that where corporate director companies are used on the boards of client companies that the Commission may expect all decisions and corporate conduct to be fully recorded in the books of both the corporate director company and also within those of the client company. A further concern is that nominated officers of corporate director companies should report frequently on the underlying activity of the client companies.

The Fiduciary Division at the Commission have confirmed that they do not have a particular policy on the use of corporate director companies and their conduct and recognise that their use is widespread and aimed at helping ease the burden of corporate administration. The Commission believe that the manner in which they are used can be a matter of good governance and it is up to each regulated business to have appropriate policies and procedures in place on their use. The Commission do not consider that a general and prescriptive approach is appropriate but would expect as a minimum that adequate records are maintained at the corporate director company level to enable the licensee to properly assess the number of appointments it has and generally to manage its business risk. Typically it is expected that it will be the client company which will hold the detailed records of the business transacted and decisions made rather than being minuted (or duplicated) in the books of the corporate director company itself. As a minimum standard the records of the client company should evidence each decision, who was present and relevant matters considered as part of the decision making process.


 

The new financial resources requirement rules (“FRR Rules”)

The GFSC has circulated proposed Financial Resources Requirements Rules to licensed fiduciaries and other stakeholders with a request for comments by 19 June 2017.

The GAT Technical Committee has had some very helpful discussions with the GFSC about the reasons for introducing FRR Rules and the proposed Rules. The GFSC has considered our earlier points in the draft circulated, but it remains important that firms consider how the details of the proposed requirements would affect them. Due to the sensitivities around firms’ capital and finances, the GFSC are not conducting a public consultation and it is appropriate for firms to respond directly to them on any areas of concern. We would suggest that firms look particularly closely at the areas below:

Rule 3.5 – add-back of excess on PI insurance, for example:

  • whether this is clear where there are different layers or types of excess
  • how it would work if cover includes reinstatement(s) of excess
  • the impact arising from levels of excess being carried (e.g. a high excess set after consideration by the fiduciary’s own Board or under group cover), and
  • how this works if a firm is permitted to self-insure under Appendix 3 (e.g. is that treated as no excess);

Appendix 1, paragraph 2 – exclusion of WIP, for example:

  • how this would work on your firm’s quarterly or other billing cycle, and
  • are the terms clear, e.g. does “collectable” require a forward-looking review for any impairment, beyond a test of when payment is contractually due (followed by a trigger at 90 days overdue under paragraph 1);

Appendix 5, paragraph 5 – impact of excluding loans to related parties.

  • Again what impact would this have and is does it reach reasonable results in the context of the GFSC’s objective of addressing liquidity risk?

If those or other areas cause difficulties, we would expect the GFSC to find specific comments with worked examples more helpful and persuasive than general high level objections, given that they do need to meet the GIFCS Standard. It would be helpful if you were able to keep the Technical Committee informed of the general nature of issues being raised with the GFSC so we have an overview of those.  Please email: info@guernseytrustees.org


 

Use of Corporate Directors – Update from the GFSC

A number of GAT members have sought clarification on the GFSC’s views on the use of Corporate Directors and in particular in the light of commentary released following regulatory and enforcement action last year (principally arising out of the Bordeaux and Marlborough Trustees cases).

The concern being that where corporate director companies are used on the boards of client companies that the Commission may expect all decisions and corporate conduct to be fully recorded in the books of both the corporate director company and also within those of the client company. A further concern is that nominated officers of corporate director companies should report frequently on the underlying activity of the client companies.

The Fiduciary Division at the Commission have confirmed that they do not have a particular policy on the use of corporate director companies and their conduct and recognise that their use is widespread and aimed at helping ease the burden of corporate administration. The Commission believe that the manner in which they are used can be a matter of good governance and it is up to each regulated business to have appropriate policies and procedures in place on their use. The Commission do not consider that a general and prescriptive approach is appropriate but would expect as a minimum that adequate records are maintained at the corporate director company level to enable the licensee to properly assess the number of appointments it has and generally to manage its business risk. Typically it is expected that it will be the client company which will hold the detailed records of the business transacted and decisions made rather than being minuted (or duplicated) in the books of the corporate director company itself. As a minimum standard the records of the client company should evidence each decision, who was present and relevant matters considered as part of the decision making process.

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Summary Minutes

Summary Minutes of the meeting held on Tuesday 14 March 2017 can be found by downloading the document below:

20170311-summary_minutes_GIBA

 

Forthcoming Events

Remember to check our Events Calendar for Industry presentations and other events that may be of interest.

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STEP May Lectures

Lunchtime Lecture No. 9
Speakers: Jo Huxtable & Martin Popplewell, Deloittes
Topic: Tax Transparency – Update on developments impacting local service providers
Date: Tuesday 16th May, 2017
Time: 11.45am for 12pm
Venue: The Dorey Room, St James

Evening Lecture No. 9
Speaker: Richard Manyon, Payne Hicks Beach Solicitors
Topic: Removal of Trustees and Protectors
Date: Wednesday 17th May 2017
Time: 5.15pm for 5.30pm
Venue: The Dorey Room, St James

Please book your places here: http://www.stepguernsey.org/lectures/


STEP Summer Social

You are invited to an informal evening to find out more about your local STEP branch. STEP Committee Members will be on hand to share their knowledge and experience and discuss various topics such as “exam techniques”, “networking skills” and “Guernsey Finance updates”. There will be opportunities to find out more about STEP events and how you can join one of the STEP Subcommittees and we have invited representatives from The Guernsey Training Agency and CLT International.

This event is open to STEP Students, Members and anyone who would like to find our more about the benefits of joining STEP Guernsey.  To register your interest please email stepguernsey@step.org 


 

STEP Annual Conference

The STEP Guernsey Branch invites you to attend the annual STEP Conference, sponsored by Carey Olsen, held at Beau Sejour on Thursday 22nd June 2017 from 9am to 4.45pm.

The conference allows delegates to meet, network and gain important knowledge and technical updates from outstanding speakers in the industry.

Brexit is clearly the most significant change the business community has seen in many years and delegates can look forward to a keynote speech on the issue from Dr Savvas Savouri, the chief economist at Toscafund Asset Management. There will also be a panel discussion on how Britain’s exit from the EU will affect Guernsey in particular.

Joining Dr Savouri on the panel of speakers are Jennifer Smithson, partner at Macfarlanes; Christopher McLemore, attorney at Butler Snow; Matthew Guthrie and Edward Devenport, partners at Mourant Ozanne; Russell Clark, partner at Carey Olsen; Stuart Lawson of Northern Trust; Dominic Wheatley of We Are Guernsey; Jo Reeves of The States of Guernsey; Mark Pattimore Chair of GAT, Adele Perrot of Butterfield Group; and STEP chief executive, George Hodgson.

Alongside Brexit, topics up for discussion include global transparency, blockchain technology, classification of trusts in the US, and updates in Guernsey trust law. There will also be an update from STEP worldwide.

Early bird rates (available until 23:59 on 21 May):
STEP member = £150
Non-member = £180

Rates (from 22 May):
STEP member = £180
Non-member = £215

If you are a STEP member, ensure you use the discount code ‘Member’ when making your booking. To make individual or group bookings, please email admin@gta.gg.

 

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Guernsey Aviation Seminar – Aircraft registration and the Cape Town Convention

Guernsey’s first aviation seminar on 3rd May (08.45AM – 12.00 PM) will provide a commercial and legal update on aircraft registration in Guernsey and the Cape Town Convention.

Christopher Jones, Partner, Ogier will moderate the seminar. Professor Sir Roy Goode QC, leading legal luminary, author of many tomes and articles on international and commercial law, including the Official Commentary on the Convention on International Interests in Mobile Equipment and Protocol thereto on Matters Specific to Aircraft Equipment (‘the Cape Town Convention as applied to aircraft objects’) will give a talk on the Cape Town Convention.

Gus Paterson, Guernsey Aircraft Registrar and Director of Civil Aviation, will be explaining how the Registry works in practice.

Joost Groenenboom, Executive Director of SGI Aviation will explain operating leases in practice.

Please click here to book.

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Association of Data Protection Officers formed to help with GDPR best practice

Please click below to download a news release from the Associate of Data Protection Officers.

Association of Data Protection Offices

With the impending implementation of the General Data Protection Regulation (GDPR) requiring businesses to increase their focus in this area, an Association of Data Protection Officers (ADPO) has been set up to support local industry.

GDPR, which takes effect in May 2018, will see a major overhaul of Europe’s, and as a consequence Guernsey’s, data protection legislation that will impact all local businesses.

The ADPO will be hosting a launch event on Wednesday 17 May at 12.30pm at the Digital Greenhouse. You can RSVP here:http://adpo.co.uk/

Sponsor Articles

Items of relevance and interest to Members brought to you by GAT Sponsors.

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Briefing Notes

Sponsors Mourant Ozannes are pleased to circulate their recent updates:

It’s my privilege – or is it? – A look at who is the ‘client’ for the purposes of Legal Advice Privilege in Guernsey following the decision in The RBS Rights Issue Litigation [2016].

Reform of Guernsey’s Insolvency Laws – The States of Guernsey has approved proposals for reforming Guernsey’s insolvency laws and directed that the necessary legislative amendments be prepared. When introduced, the reforms will enhance the current corporate insolvency laws, giving greater protection to creditors and investors.

Royal Court refuses to sanction a scheme of arrangement compelling a share buy-back Update –  The Royal Court of Guernsey has refused to sanction a scheme of arrangement that sought to impose a compulsory buy-back of shares on minority shareholders.

 

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Information Security

Through various media we are reminded daily about the latest threats, large scale data leakages and high profile system breaches. Although the public typically only hears about attacks against high-profile companies, banks and governments, small to medium size businesses make prime targets for cybercriminals, competitors and disgruntled parties.

There are plenty of threats to our information and our business. Some of these are obvious such as unauthorised access to our network, compromised confidential information and destruction of records. Others are a little more obscure but must still be considered.

Information security is our responsibility and we must take action to ensure our systems, personnel and procedures are secure to protect our own businesses and the information of our clients. With so many information security seminars and service offerings, it’s hard to know where to start and what to do next to improve our overall security posture.

The international standard ISO 27001 formally specifies an Information Security Management System (ISMS). It defines activities concerning the management of information risks and is a framework allowing organisations to identify, analyse and address information risks. The ISMS ensures that continuous adjustments are made to fine tune processes in a fast changing environment.

There is no doubt that ISO27001 is the vanguard of information security but it is comprehensive and extremely challenging for a small-to-medium size business to achieve and maintain and requires a significant amount of investment and commitment. The time taken to implement such a standard is also considerable.

What has been missing is the ability for small to medium size businesses to create an achievable information security strategy and test regime that covers all aspects of the business to prove to clients, investors, suppliers and regulators that your business is secure and safe to do business with.

The situation is changing and alternative standards are emerging that bridge the gap between no ISMS and an ISO 27001 compliant ISMS. These standards are more easily achieved but still provide the assurances to your clients, investors and the regulators that you have the necessary systems and processes in place to protect data. Gap analysis can be used to quickly identify where systems are compliant and where changes need to be made.

About the Author
Matthew Neville has worked in the IT industry for 20 years. He has extensive knowledge of IT infrastructure and runs a team of people who provide complete system support. As security of both systems and information has become more critical he has focused more on this area and has qualified as a Certified Information Systems Security Professional (CISSP). Matthew can be contacted on 01481 701234 or by emailing matthew@asl.gg.

 

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