Update

Regulatory hot topics – what Guernsey financial services businesses need to know

On Wednesday 21 May, Mourant welcomed guests to the third and final event in its 2025 Regulatory Hot Topics enforcement series in Guernsey, delivered by members of the firm's Regulatory team.

These interactive breakfast seminars are designed to keep senior financial services professionals up to date with the latest developments in the sector.

Below, we've outlined the key takeaways from the final session, where speakers Sally Rochester, Gordon Dawes, Helen Wyatt, and Matthew Parker covered topics ranging from cybersecurity to SARs – also addressing the consideration of human rights principles within the enforcement process.

Cyber risks and tech updates for Guernsey businesses 

• There is an increased focus from the Guernsey Financial Services Commission (GFSC) on technology with the creation of a new Technology Supervision Unit.
• The Unit will focus on ensuring that the Commission has the right skills to understand appropriately the newer technologies and cyber defences employed by the firms it regulates.
• We expect to see an increase in supervisory activity around cyber risk, particularly given how material it is to regulated businesses and the period of time since the cyber rules were introduced.
• It is timely for businesses to consider reviewing their cyber and technology risk management processes, either through internal or third-party review.

The right to independent review

• The GFSC has acknowledged that it is not an independent or impartial decision-maker, an element required by Article 6 of the European Convention on Human Rights. It has regressed by relying on senior decision-makers (who are GFSC officers), most of whom are London-based lawyers with no personal knowledge or experience of the industry, and who do not have assistance from lay assessors – an essential component of the now-disbanded non-statutory tribunal.
• The Royal Court, which could hear appeals using lay assessors, does not in practice do so, but this can be asked for in future. The appeal legislation has, to date, been so narrowly interpreted by the Courts that it does not, it is argued, give the full jurisdiction required to give the enforcement process Art. 6 compliance.
• The imminent Court of Appeal judgment in Fuller v GFSC should give many of the answers but the process is likely to remain unsatisfactory and requires reform. The GFSC is too close to the issues it is adjudicating upon and has shown itself to be a very determined litigator, appealing almost all decisions against it. The case of Weighbridge is the latest example. It appears, from the outside, positively to have resisted calls from the International Monetary Fund to reform and criticisms from the Courts. This is in stark contrast to the UK where the FCA must make its case de novo to the Upper Tribunal, which hears appeals.

Looking at SARs in light of the MONEYVAL recommendations 

• Consider undertaking a review of past Suspicious Activity Report (SAR) submissions, with a focus on their quality, the offences reported, and the timeliness of reporting, in the context of both the National Risk Assessment and internal business risk assessments, to understand what might be done better.
• To improve the quality of SAR filings, businesses should consider the measures they can put in place to facilitate proactive SARs based on suspicious funds flow and suspicious transaction activity.
• As the Guernsey authorities act upon Moneyval's recommendations, be ready to engage with outreach and guidance initiatives from the authorities and to review your own resources, guidance and training to ensure compliance with regulatory expectations.

How we can help

At Mourant, we provide comprehensive support across corporate law, consulting, and litigation. In the corporate space, we offer guidance on establishing structures and completing transactions, assessing authority chains and decision-making processes, documenting board and administrator decisions and concerns, and advising on licensing and exemption requirements.

Our Consulting practice can assist with preparing for regulatory visits, providing strategic support for remediation efforts, reviewing board effectiveness and corporate governance, offering post-remediation assurance, and evaluating the effectiveness of policies, procedures, and controls.

In litigation, we help stress test structures, identify weaknesses, and engage with regulators. We can also support with enforcement processes, including interviews, representations, settlement discussions, and the SDM process. Additionally, we advise on personal liability, employment, and insurance issues. This integrated approach ensures tailored solutions for each client's needs.