Four Eyes Principle
The overriding requirement is for the four eyes (two individuals) criterion to be met on a continual basis and that individuals so assigned to fulfil these roles do so over the entire operations of the firm. It is not therefore possible to satisfy this criterion when different sets of eyes look over different parts of a firm’s operations. The four eyes criterion need not be satisfied at Board level alone. It is feasible for these functions to be conducted through the senior management of a firm.
These provisions are designed to ensure that at least two minds are applied both to the formulation and implementation of the policy of the firm. Both must demonstrate the qualities and application necessary to influence strategy, day-to-day policies and their implementation, and both must actually do so in practice. Both persons' judgements must be engaged in order that major errors leading to difficulties for the business as a whole are less likely to occur. Further, they must have sufficient experience and knowledge of the business and the necessary authority to detect and deal with any imprudence, dishonesty or other irregularities in the firm.
In determining whether a firm meets the four eyes criterion the FSC will consider:
- The seniority and authorities of the persons.
- Whether the individuals are conducting their roles on a day-to-day basis within Gibraltar.
A non-executive director, for example, would be automatically excluded from performing this role. Similarly, non-resident executive directors or non-resident executive managers would normally fail to meet this requirement. A person who is permanently employed in Gibraltar and discharges that employment in Gibraltar but resides in close proximity in Spain, will, for the purposes of this criterion, be considered “resident”.