In enforcement cases, the GFSC can seek to impose prohibitions on individuals to prevent them from continuing to work in the industry. Often, such prohibitions have been time-limited, although the GFSC could also issue lifetime prohibitions where the circumstances warranted such an approach.
In a recent enforcement case, however, the sanctions imposed on the respondent by one of the GFSC’s Senior Decision Makers, were appealed to the Royal Court.
Having considered the appeal, the Royal Court declared that two of the sanctions,
- the imposition of a time-limited prohibition and
- the disapplication of the six-directorships exemption from licensing under the Fiduciaries Law for a specified period, went beyond the scope of the GFSC’s legal powers.
Instead, the Royal Court decided that the GFSC should follow a similar approach taken by the UK Financial Conduct Authority and only issue indefinite prohibitions (i.e. “lifetime bans”) and disapply the six-directorships exemption indefinitely.
The GFSC always believed that its policy offered a more reasonable and proportionate approach to the imposition of enforcement sanctions.
In each case, the GFSC only sought to prohibit people for the minimum period that it thought necessary in all the circumstances.
The GFSC was therefore very concerned by the decision of the Royal Court, and decided to lodge an appeal with the Guernsey Court of Appeal, which handed down its Judgment yesterday afternoon . [click here to access the Judgment.
In essence, the Court of Appeal struck down the finding of the Royal Court that time-limiting prohibitions and disapplication of the six directorships exemption went beyond the scope of the GFSC’s legal powers.
Instead, the Court of Appeal confirmed that the GFSC had correctly interpreted the scope of its legal powers.
The GFSC can now again tailor prohibitions and disapplication of the six directorships exemption to the individual circumstances of each case, and make orders that are reasonable and proportionate in all the circumstances.
The GFSC will now proceed with the enforcement case involving Y, taking into account the guidance provided by the respective Courts.
- Y v GFSC (Royal Court, unreported, 47/2018)
- Section 3(1)(g) of the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000 permits people to hold up to six directorships without needing a personal fiduciary licence, unless that exemption has been disapplied by the GFSC following a finding that the person is not “fit and proper”.
- GFSC v Y (Court of Appeal, 17 June 2019)
Read the GFSC press release – https://www.gfsc.gg/news/article/commission’s-enforcement-powers