Preconditions

The FSC may disclose information to an overseas regulatory authority necessary to enable that authority to exercise its regulatory functions, including the conduct of civil or administrative investigations or enforcement proceedings, to enforce laws or regulations administered by the authority provided that;

• the Financial Services Commission's (FSC's) Chief Executive Officer (CEO) has satisfied himself that the intended recipient overseas authority is subject to adequate legal restrictions on further disclosures which must include a provision of an undertaking of confidentiality;
• the CEO receives an undertaking from the recipient foreign regulatory authority not to disclose the information provided without the consent of the Commissioner;
• the CEO is satisfied that the request for assistance by the foreign regulator is required for the purposes of the foreign regulator’s statutory functions, including the conduct of civil or administrative investigations or enforcement proceedings, to enforce laws or regulations administered by the authority.

Where a request for co-operation has been received, the CEO will need to take into account the following considerations:-

• whether the request relates to possible breaches in law or other regulatory requirements which have no close parallel in Gibraltar;
• the seriousness of the matter to which the request relates to, the importance to the request of the information sought in Gibraltar - “the Necessity Test”.

The Necessity Test

In a case heard in the Court of Appeal for Gibraltar (Financial Services Commissioner V The Queen (on the application of a Gibraltar company, X, Y and Z, other respondents)) it was determined that information may be disclosed if the necessity test was satisfied.  Essentially the conditions that need to be satisfied are:

That the information that has been requested has been acquired by the CEO in the course of carrying out his functions as CEO and is, therefore, to be regarded by him as confidential information by virtue of the relevant section of the Act.  In the absence of consent from all those individuals and bodies identified from that information, he is to remind himself that he cannot comply with the Request unless he is satisfied that one of the grounds in the relevant section of the Act exists.

In deciding whether to comply with the Request he has to ask himself the following questions:

• Is the requesting body an Authority, which appears to me to exercise functions similar to my own?
• Is the disclosure of the information necessary to assist the requesting body?
• If so, is it in the interests of the public in Gibraltar that I should disclose it to the requesting body?

The answer to all three of the above needs to be in the affirmative.