Collaboration is Key to Island’s Finance Industry Success
Guernsey’s finance industry is built on a bedrock of collaboration. The close working relationships between the various sector associations, industry bodies, the government and the regulator support the success of the many firms based in the island.
Much of this collaboration is done by volunteers sitting on industry association committees such as Guernsey Society of Chartered & Certified Accountants (GSCCA), Guernsey Investment Funds Association (GIFA), Guernsey Association of Trustees (GAT) and Guernsey International Insurance Association (GIIA).
The Guernsey International Business Association (GIBA) is the representative body of the island’s financial services industry and engages regularly with the government and civil servants on a diverse range of issues affecting the industry.
GIBA also collaborates with other business associations such as the Institute of Directors, and supports firms with technical updates and tools like the new PDF which shows prospective finance industry employees the advantages of working in Guernsey.
‘The level of work that goes on in the associations and their committees is significant,’ says David Oxburgh, Chair of GIBA. ‘This support structure cannot be underestimated, it is one of the many reasons that Guernsey has much to offer the global finance industry.’
The recent work on the Income Tax (Substance Requirements) (Guernsey) (Amendment) Ordinance, 2018 is typical of the collaboration seen in the island and presented the biggest challenge in over a decade to international finance centres like Guernsey.
‘Guernsey needs to comply with these standards to avoid effective “blacklisting” by the EU and OECD, which would be hugely damaging to the island’s finance industry and ultimately our economy,’ explains Antony Mancini, Vice Chair of GIBA. ‘However, in complying it is vital that, as far as possible, existing business models – which largely meet the standards in practice – can be sustained under the new standards.’
The new legislation was approved by the States of Deliberation on 28 November 2018 following extensive work by a group of industry representatives drawn from the various sectors of the finance industry, who continue to work with Guernsey’s Revenue Service on developing the island’s new economic substance law, regulations and guidance.
‘This work has drawn on the expertise of our working group to understand how affected businesses work, how the international requirements can accommodate those business models and how internationally acceptable law and guidance should be framed,’ says Mr Mancini.
The GSCCA worked closely with the substance working group and continues to play a vital role in checking that the proposed regime fits within the existing tax legislative framework and will be workable for the different industry groups. Chair of the GSCCA’s Taxation Sub- Committee Jo Huxtable says: ‘The sub-committee meets quarterly and comprises representatives from a range of local firms. Our remit is to consider local and international tax developments impacting Guernsey and to work collaboratively as a committee, and sometimes with government, to ensure that the law and published practice make sense and are business friendly.’
These new international standards apply globally and consistently. So the Crown Dependencies, with similar businesses and challenges, need to find a common framework. There is no competitive advantage to be gained from differing rules and it is important for Guernsey, Jersey and the Isle of Man to work together.
The Guernsey Investment Funds Association (GIFA) is another group that proactively supports the local industry. Christopher Jehan, Vice Chairman of the GIFA Executive Committee, explains: ‘Within GIFA we have a number of sub-committees covering education, technical issues and marketing Guernsey’s fund industry in the UK and beyond.
‘GIFA provides training events for our members which are free to attend and to which the presenters give their time freely.
‘Our technical committee responds to regulatory consultations, and may escalate actions to GIFA’s Executive Committee. We engage directly both with the regulator and with government – with civil servants and politicians – to give the issues we are raising a higher profile.
‘For example, the new AML/CFT Handbook involved meetings with senior civil servants and senior Guernsey Financial Services Commission (GFSC) representatives on the same day to highlight the industry’s view. The engagement that followed from the GFSC resulted in significant changes in some areas.
‘Our marketing committee engages with Guernsey Finance with regard to roadshows and events, however in recent years we have also teamed up with the Alternative Investment Management Association (AIMA) to put on events in London outside of the work done with Guernsey Finance. We are looking to extend this by working with other associations on events both in London and potentially further afield.’
‘There are many other examples of collaboration,’ says Mr Oxburgh. ‘The Financial Services Policy Framework was the result of the work done by the Committee for Economic Development alongside Guernsey Finance, local politicians such as Gavin St Pier and Lyndon Trott, and key civil servants and representatives from the GFSC and GIBA.
‘The States of Guernsey’s Brexit working group is yet another example of how we are able to draw upon our industry expertise, for the greater good of the island’s economy.
‘It would not be an overstatement to say that our economy, of which the bedrock is the finance sector, is greatly boosted by the many volunteer hours given so freely by many islanders.’