Gibraltar’s Financial Services Commission welcomes the publication today
of the report of the review team appointed by His Excellency the Governor
under Section 12A of the Financial Services Commission Act 1989.
This is the third review commissioned under the Act and was
requested by the Commission, in light of the rapidly changing regulatory
environment in the United Kingdom. The Commission is obliged by its founding
Act to match UK standards of supervision. The FSC considers it
important for it to seek independent verification that it continues to keep
pace with these developments.
A "good standard of financial services regulation
was highlighted in the report, which concluded that Gibraltar had a
"regulatory regime developed to a good standard and staffed by competent
regulators with a manifest determination to improve performance further."
Commissioner Marcus Killick said:
"We are naturally pleased that the Commission’s hard work to
maintain a robust regulatory regime has been independently validated. We
particularly welcome the commendations over our recent enhancements of
that regime as well as the support given to our proposals for the
future.
The report makes a number of recommendations which will be
considered. Many concern matters on which we were already taking action.
Others will no doubt help us in our future development.
The FSC is the only regulator that is judged, not only against
international standards, but also on how we match the policies and
practices of another vastly larger authority, which supervises one of
the biggest financial sectors in the world.
It is a tremendous tribute to the team that with 18 staff we have
received such a positive report. Nevertheless, we recognise the need to
continue our work, particularly in view of the fact that regulatory
standards around the world continue to change.
EU and other international regulatory standards constantly evolve. We
must continue to meet them in an efficient, effective and appropriate
manner, which meets the needs of the financial sector of Gibraltar and
the consumers it serves.
As part of our commitment to transparency we are publishing our
responses to the individual recommendations in the report on our website
and will regularly update these so that our stakeholders can monitor our
progress."
Four key areas of the FSC’s work were considered by the review team:
Anti-Money Laundering, Banking, Insurance and Investment Services.
The report concluded that the Commission’s supervisory activities, for
both Insurance and Investment services, established and implemented
standards that substantially matched UK legislation and practice.
Recommendations were made as to how the FSC could readily make the remaining
adjustments necessary to bring the FSC fully into line with recently
introduced UK regulatory developments. The Commission’s work towards
achieving this goal is already underway.
The team was also satisfied that the Commission’s approach to banking
supervision had succeeded in developing an effective supervisory structure
that established standards which met its obligations under the Financial
Services Commission Act to match those required by UK legislation and
supervisory practice.
Gibraltar’s anti-money laundering regime was judged more robust than that
of the UK in a number of areas, "even taking into account the different
risks posed by the business."
Some of the report’s recommendations fall outside of the Commission’s
control, including asking the Financial Services Authority to keep the
Commission fully informed on UK regulatory developments The Commission will
be drawing these ideas to the attention to the FSA and other relevant
authorities.
The findings of the report follow previous favourable reviews undertaken
of the Commission. In 2001, the IMF found that the Commission "carries
out its duties diligently and has an intimate knowledge of the institutions
under its supervision. The results of our assessments indicated that
supervision is generally effective and thorough and that Gibraltar ranks as
a well-developed supervisor." In 2001, an FATF report concluded that
"Gibraltar has in place a robust arsenal of legislation, regulations and
administrative practices to counter money laundering."
Commission Member Franco Cassar
has also welcomed the report.
"This is good news for Gibraltar’s financial services sector
which is based on sound regulatory practice.
It is also a tribute to the sensible, practical, and effective
regulatory system which has been implemented here by the Commissioner
and his team.
This independent assessment of the FSC’s regulatory performance
demonstrates that we continue to strike the careful balance between the
need to protect the consumer and allowing businesses the freedom to
operate successfully in a highly competitive world market.
The report also makes clear that Gibraltar’s regulatory approach
significantly matches and in some cases exceeds the standards accepted
as best practice in the UK."
Gibraltar’s Chamber of Commerce has congratulated the FSC on the report.
Peter Isola, President of the Gibraltar Chamber of Commerce, said:
"The review is an impartial endorsement of the international
standards which we operate in Gibraltar. It fully justifies the
confidence that the business community has in the FSC’s supervision of
the financial services sector on the Rock.
The report clearly shows how effective the FSC has been in maximizing
its comparatively small resources to achieve this level of regulation."
Legal and finance professionals have welcomed the report into the FSC.
Tony Provasoli, Chairman of the Gibraltar Finance Centre Council said:
"The reputation of the Rock depends on confidence and this report
provides independent verification that the regulatory regime in
Gibraltar is deserving of this confidence.
I believe that regulation, nevertheless, is a delicate balance
between applying high standards and reacting to market needs. The fact
that we achieve this in Gibraltar is a credit both to the Commissioner
himself and his team."