The Financial Services Act 1989 and Financial Services (Markets in Financial Instruments) Act 2006 provide the legal framework for the supervision of firms providing investment services and insurance mediation in or from within Gibraltar.
The powers to seek and obtain information from "relevant persons" are vested in the Financial Services Commissioner or any other person appointed by the Financial Services Commissioner to act on his behalf (known under the Act as the "appointed person"). The definition of relevant person under the Financial Services Act 1989 includes:
(a) a licensee, an authorised Gibraltar investment firm and an authorised European investment firm;
(b) an exempted person;
(c) the operator, trustee or custodian of an authorised or recognised collective investment scheme;
(d) any director or officer of an investment exchange or a clearing house;
(e) any person who is, or who has at any time been, directly or indirectly employed (whether or not under a contract of service) by any of the persons mentioned in paragraphs (a) to (c) above; and
(f) any person who has, or who has at any time had, any direct or indirect proprietary, financial or other interest in or connection with any of the persons mentioned in paragraphs (a) to (c) above.
Section 33 of the Financial Services Act 1989 sets out the powers to compel the production of information and documents. Under said section the authority may require a relevant person:(a) to attend before the Authority, or before a person duly appointed by the Authority in that behalf (an "appointed person") at a specified time and place, and to answer questions and otherwise furnish information appearing to the Authority or to the appointed person to be relevant to any investment business or controlled activity carried on by that person;
(b) to furnish the Authority or an appointed person on any occasion or at specified times or intervals, with such information, books or papers as the Authority or the appointed person may reasonably require about any specified matter relating to an investment business or to a controlled activity, being, if the Authority or the appointed person so requires, information verified in a specified manner.Section 34 extends the exercise of these powers to an application for a licence or authorisation or any person who appears to the authority to be carrying on an investment business or controlled activity.
Section 38 also grants powers allowing the Authority to appoint one or more persons to investigate and report on:
(a) the affairs of any person, including a person falling within paragraph (a) or paragraph (b) of section 32, suspected of carrying on an investment business or a controlled activity contrary to any of the provisions of this Act, or in a manner which is otherwise prejudicial to the public, to any investor or potential investor, or to the reputation of Gibraltar as a financial centre; or(b) the affairs of, or of the manager, operator, trustee or custodian of, an authorised or a recognised scheme, in so far as they relate to the activities carried on in or from within Gibraltar or any other collective investment scheme, if it appears to the Authority that it is in the interests of the investors or potential investors or of the reputation of Gibraltar as a financial centre so to do.
(c) the affairs of a recognised institution in relation to items 7 to 12 business suspected of being carried out in or from within Gibraltar in contravention of the provisions of this Act or any regulations or rules made hereunder or upon the request of the relevant supervisory authority and in such case the appointed person shall carry out the investigation in such manner as that supervisory authority may require and shall, if so required by the Authority, report on such investigation directly to that supervisory authority;
(d) for the purposes of paragraph (c) "relevant supervisory authority" shall have the meaning given to it in the Banking Act".
The appointed person under this section shall have the powers conferred on the Authority under and by section 33.
As a general rule all the information obtained under the Financial Services Act 1989 is confidential and may not be disclosed. Section 58(2) permits disclosure if it appears to be necessary:
(a) to enable the Authority to carry out any of its statutory functions; or
(b) in the interests of the prevention or detection of crime; or
(c) in connection with the discharge of any international obligation to which Gibraltar is subject; or
(d) to assist, in the interests of the public, any authority which appears to the Authority to exercise in a place outside Gibraltar functions corresponding to those of the Authority; or
(e) to comply with the directions of the Supreme Court
Section 29 of the Financial Services Act 1998 also specifically applies to any confidential information which -
(a) a person who works or has worked for the Authority or for any other person for the time being designated as a competent authority in relation to Gibraltar for the purposes of Article 22 of the Investment Services Directive or Article 9 of the Capital Adequacy Directive, or
(b) any auditor or expert instructed by the Authority or a person so designated,
has received in the course of discharging his duties as such a person, auditor or expert in relation to a Gibraltar investment firm or a European investment firm.
Section 29 states that Section 58(2) of the Financial Services Act 1989 shall not apply to information to which Section 29 applies. Information to which Section 29 applies shall not be disclosed by any person referred to in subsection (a) or subsection (b) above, or by any person receiving it directly or indirectly from such a person, except in any of the circumstances specified in paragraphs 1 to 7 of Article 25 of the Investment Services Directive, as amended by the Prudential Supervision Directive.
In addition, information received under Article 25.2 of the Investment Services Directive may not be communicated in the circumstances referred to in Article 25.7 of that Directive without the express consent of the competent authority from whom it was obtained.
Any person who contravenes any provision of Section 29 shall be guilty of an offence and liable -
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding level 5 on the standard scale or to both.