Fiduciary Supervision Policy and Innovations Division

Fiduciary Supervision Policy and Innovations Division

International, Innovations and In Perspective

Gillian Browning, Director Eamonn Finnerty, Deputy Director

Copyright of Guernsey Financial Services Commission

Presentation Overview • International

• Sector overview • Innovations

• What’s happening? • In perspective

• Overview of the Division • PRISM • Observations • 2015 Key Expectations


International


Existing Clients by Fiduciary Turnover

Canada 0.5%

USA 3.3%

Bermuda, Caribbean

& Latin America

0.4% Africa 2.1%

Middle East 5.3%

Russia 2.9%

China 0.6%

Europe 20.8%

Asia and Far East

2.4%

Australia & New Zealand

0.7%

Local 17.9%

South Africa 3.5%

South America

0.5%

Azerbaijan 0.8%

UK 37.5%


New Clients

Canada 0.9%

USA 3.0%

Bermuda, Caribbean

& Latin America

0.4% Africa 2.3%

Middle East 6.3%

Russia 1.4%

China 1.0%

Europe 17.6%

Asia and Far East

3.0%

Australia & New Zealand

0.3%

Local 24.6%

South Africa 5.1%

South America

0.1%

Azerbaijan 0.9%

UK 31.1%


Fiduciary Licensees by Type

Total number of fiduciary licensees = 187

Total number of fiduciary licensees = 192

International financial group

Privately owned - local

Personal Fiduciary Licensees

Lawyers and accountants

Privately owned - overseas

2013

37

17

66

42

25

2014

41

68

39

18 26


Total Assets by Ownership Peer Group

INTERNATIONAL FINANCIAL GROUP

LAWYERS AND ACCOUNTANTS

PRIVATELY OWNED - LOCAL

PRIVATELY OWNED - OVERSEAS

2013 2014

Assets £


New International Standard for Regulating Trust Company Businesses


Innovations


Innovations – GFSC Approach

Yes No


Our Recent Experience with Innovations


Non-Regulated Financial Services Businesses


NRFSB Revision


In Perspective • Overview of the Division • PRISM • Observations • 2015 Key Expectations


Resource Constrained

3385

11

Fiduciary sector staff numbers 2014 GFSC Fiduciary division staff numbers 2014 Copyright of Guernsey Financial Services Commission

The Team Gillian Browning

Director

Paul Evans Assistant Director

Helen Allen Senior Analyst

Sophie Richards Secretary

Celia Beecham Analyst

Nic Cleveland Assistant Director

Simon Taylor Senior Analyst

Alice Lindley Analyst

Jason Hart Analyst

Audrey Branch Deputy Director

Eamonn Finnerty Deputy Director


Probability Risk and Impact System - PRISM

Data Management

Operating Platform

Risk Based Supervision

Online Services


Supervision under PRISM

Risk mitigation

plan

Internal challenge

Assess risk probability

Engagement level

Impact category

• Check outcomes • Re-assess firm


Definitions • Impact – The degree of damage that a licensee, fund,

registered entity or group, could cause to its consumers, the financial system in the Bailiwick and elsewhere, the Bailiwick economy and the public were it to (a) fail; or (b) fail to observe proper standards of conduct.

• Probability risk - Is the likelihood of a problem

occurring.


Impact and Engagement Levels Engagement Level

High Medium High

Medium Low

Low

Firm Impact Continuous Assessment

Full Risk Assessment

Risk Assessment

Thematic & Trigger based supervision


Probability Risk Categories

• Strategy/Business Model Risk

• Governance Risk • Conduct Risk • Operational Risk • Financial Crime Risk

• Credit Risk • Market Risk • Capital Risk • Liquidity Risk • Insurance Risk • Environmental Risk


Reactive Supervision • Applies to all firms, particularly pertinent to the

supervision of low impact firms • Some examples of triggers:

• From the firm – regulatory return • From a customer – complaint • From other external sources • From Financial Crime Supervision & Policy

Division – e.g. following an AML/CFT visit


Potential Thematic Reviews

Corporate Governance

Client Money/Assets Outsourcing RATS

Innovations Trustee

Investment Duty

Financial Resources

Requirement Other?


Observations • Really ‘know your client’ • CDD at the heart of the business

• Embedded compliance culture

• Risks understood, measured, managed and mitigated • Collective understanding and knowledge in business Copyright of Guernsey Financial Services Commission

2015 Expectations

Risk Based Supervision

PRISM

Innovations

Online Submission

Policy Development

AML Visits

Thematics


Questions?


Documents

Fiduciary Supervision Policy and Innovations Division