Acting as a Director – Do I Need a Personal Fiduciary Licence_ – ComsureComsure u s anti money laundering laws

Overview

Under the regulation of fiduciaries, administration businesses and company directors, etc (bailiwick of guernsey) law, 2000 (“the fiduciaries law”), acting as a director in or from within the bailiwick of any company or unincorporated body whether incorporated, registered or established in or under the laws of the bailiwick or elsewhere by way of business is a regulated activity. For the avoidance of doubt, “in or from within the bailiwick” includes in or from within guernsey, alderney and sark.

The fiduciaries law provides a number of exemptions from the requirement to hold a fiduciary licence. Section 3 of the fiduciaries law sets out these exemptions which include:

• acting as a director of a company (provided that no other services consisting of a regulated activity such as nominee shareholder is provided by the director) with an established place of business in the bailiwick (section 3(1)(b));

u s anti money laundering laws

• acting as a director of a company listed on a recognised stock exchange (section 3(1)(c));

• acting as a director of a company in the majority ownership of that director of his/ her close family (section 3(1)(d));

• acting as a director of a supervised company (section 3(1)(e)); and

• acting as a director of a company which is a subsidiary of a company that meets one of the requirements set out in the preceding bullet points (section 3(1)(f)).

There is one further exemption at section 3(1)(g) which permits an individual to hold directorships of up to 6 companies which do not fall into any of the categories of companies cited in the above bullet points. AML/CFT obligations

Whilst an individual utilising the exemption under section 3(1)(g) of the fiduciaries law does not require a personal fiduciary licence, he/she remains subject to the criminal justice (proceeds of crime)(bailiwick of guernsey) law, 1999 and is required to comply with the requirements in the criminal justice proceeds of crime regulations and the rules in the handbook for financial services businesses on countering financial crime and terrorist financing (“the handbook”), which can be found here.U s anti money laundering laws

This means that those individuals acting as director under this exemption must, among other things, undertake customer due diligence on the beneficial ownership of the companies they serve and carry out ongoing monitoring of the companies’ activities to the same regulatory standard as any other bailiwick financial services business. Disapplication of the six directorship exemption

The commission has the power to disapply the exemption under section 3(1)(g) of the fiduciaries law if it determines that, in having regard to the minimum criteria for licensing under schedule 1 to the fiduciaries law, an individual is not fit and proper to be a director of a company. This may include, but is not limited to, instances where the individual has failed to comply with any of the anti-money laundering and counter terrorism financing legislation and the rules of the handbook.U s anti money laundering laws

For the purposes of this FAQ, companies are “counted in” if they count towards an individual’s total of 6 directorships under section 3(1)(g) because no other exemption in section 3(1) covers them. On the other hand, where acting as a director of a company falls under any applicable exemptions under section 3(1), this will be “counted out”.

No. Section 3(1)(b) of the fiduciaries law provides an exemption for acting as a director of a company with an established place of business in the bailiwick provided that no services consisting of, or comprising a regulated activity such as acting as a nominee shareholder, are supplied to the company by the director. Established place of business (“EPB”)

Section 58 of the fiduciaries law defines EPB as being in relation to a company, and without limitation, does not include an office in the bailiwick at which is transacted only such administrative business as is necessary to enable that company to comply with the requirements of the companies (guernsey) law, 1994, the companies (alderney) law, 1994 or any corresponding legislation in force in any place outside the bailiwick.U s anti money laundering laws

For the avoidance of doubt, merely having a registered office or holding statutory documents or administrative records in guernsey sufficient to meet alderney or guernsey company law requirements does not amount to an EPB. The commission considers a company will be seen to have an EPB in the bailiwick if they have premises and staff of their own in the bailiwick.

A supervised company is:

• A company:

• which holds a licence to carry on controlled investment business under section 4 of the POI law or is exempt from the licensing under the POI law;

• which is an authorised fund under section 8 of the POI law; or

• which is a closed-ended investment company.

• A company which is licensed by the commission under the insurance business (bailiwick of guernsey) law, 2002 or which is exempt from such licensing; or

• A company which is a licensed institution within the meaning of the banking supervision (bailiwick of guernsey) law, 1994;

u s anti money laundering laws

• A company which is of any class or description prescribed for the purposes of this section by regulations.

In a rare occurrence where the ICC is not a supervised company, the directorship of the ICC and its incorporated cells will be counted separately as each incorporated cells has its own legal identity which is also distinct from the ICC. Accordingly, this ICC and its cells will be “counted in”. If the total numbers of directorship held are not greater than six, then this may fall under the exemption under section 3(1)(g) of the fiduciaries law. If the total number of directorship is more than six, then the individual in this scenario should contact the commission to discuss making an application for a personal fiduciary licence.

For the avoidance of doubt, the definition of ‘supervised company’ as defined at section 58 of the fiduciaries law does not include a company regulated under the insurance managers and insurance intermediaries (bailiwick of guernsey) law, 2002 (“the insurance managers law”).U s anti money laundering laws therefore, an individual acting as a director of a company regulated under the insurance managers law, would need to count that directorship as one of the ‘up to 6’ directorships available to them under section 3(1)(g) of the fiduciaries law.

For the avoidance of doubt, for the purposes of the fiduciaries law, a company A is a subsidiary of a company B if:

(a) company B controls the composition of company A’s board of directors; or

(b) company B holds more than half in nominal value of company A’s equity share capital; or

(c) company A is a subsidiary of any company which is company B’s subsidiary.

An individual wishing to apply for a discretionary exemption to enable them to act as a director of a registered fund and its subsidiaries will need to apply only once. However, the commission will time limit the discretionary exemption for a period of three years after which the individual will need to apply for, and be granted, a discretionary exemption if they wish to continue to act as a director of registered funds and their subsidiaries.U s anti money laundering laws if the application is successful and the discretionary exemption is granted, it will cover all registered funds you have acted or will act as a director for, as well as their subsidiary companies for that period.

The aim is for this discretionary exemption to cover the period until such a time the fiduciaries law is amended as part of the revision of laws project, when it is expected that a statutory exemption will be created for acting as a director of registered funds. More information on how to apply for a discretionary exemption for acting as a director of registered funds can be found here.

For the registered fund, you can apply for a discretionary exemption for acting as a director of registered funds. If the application is successful and the discretionary exemption is granted, it will cover all registered funds you have acted or will act as a director for, as well as their subsidiary companies.U s anti money laundering laws

As for the joint venture company of the registered fund, acting as a director of this joint venture company can be “counted out” only if the registered fund 1) controls the composition of the joint venture company’s board of directors or 2) holds more than half in nominal value of the joint venture company’s equity share capital. This is in line with the case of an authorised fund where section 3(1)(f) is applicable. Disclaimer

Whilst the commission has taken all reasonable steps to ensure that the information set out herein is accurate the commission does not accept any responsibility for errors or inaccuracies and notes sections 22 and 23 of the financial services commission (bailiwick of guernsey) law, 1987, and the financial services commission (limitation of liability) ordinance, 1990.

The materials in this note do not constitute financial or other professional advice.U s anti money laundering laws you should consult your professional adviser if you require advice.

Http://bit.Ly/2rg7hsa