19/08/22

GUERNSEY: GFSC offers consultations for businesses subject to new law.

As published on guernseypress.com, Friday 19 August, 2022.

Companies new to financial services regulation that are likely to be subject to the island’s new lending, credit and finance law will have a chance to meet the regulator next week to better understand their responsibilities.

Invitations have already been extended to a range of businesses for three separate sessions at the Guernsey Financial Services Commission’s office in Glategny Esplanade next week.

Tuesday will see a session for motor traders and garages that provide or arrange finance for customers, which will require a licence under the new law.

The following morning sees a session for non-bank lenders and businesses already registered as non-regulated financial services businesses under the existing law, and at lunchtime for firms that act as credit or home finance brokers or arrangers, and those providing other services ancillary to credit that may need a licence under the consumer finance provisions within the new law.

Other businesses that think they might come under the scope of the new law are also able to attend.

The commission said the intention was to allow businesses to seek clarification on issues raised in a consultation paper currently live.

It said the approach of the new law was to introduce proper regulation and consumer protection for the credit and finance sector.

Feedback from the industry has been for an approach aligned with but significantly streamlined in comparison with the UK.

‘We consider these new rules provide an approach which properly regulates the sector and provides appropriate protection for Bailiwick consumers within a framework that is considerably streamlined compared to that of the UK.

‘Consumers will benefit from the knowledge that their interests are safeguarded. Firms must treat customers fairly. They must provide information which is clear and sets out charges and interest rates in a manner that allows consumers to make fair comparisons and informed choices between providers, ensures that they understand the terms of agreements which they enter into, and are protected against misleading or unfair contract terms.

‘This is increasingly important as economic conditions become more difficult and consumer finances are stretched by higher prices and interest rate increases begin to take effect.’

The law also addresses fintech platforms operating crowdfunding, peer-to-peer lending, and virtual asset service providers, and introduces licensing for a wide range of activities related to cryptocurrencies and other virtual assets, required to meet international standards and the island’s forthcoming Moneyval assessment.

‘While the rules look daunting in their scope, and run to approximately 90 pages, they cover more than just consumer protection. For the majority of licensees, only a part of the rules apply,’ the commission added.