The States of Guernsey recently passed the Companies (Guernsey) Law 2008 (Insolvency) (Amendment) Ordinance 2020, making Guernsey an even more desirable forum for insolvency proceedings. The changes show that Guernsey is prepared to arm insolvency office holders with the necessary tools and powers to tackle, draw in and preserve the assets of an insolvent company for the benefit of creditors.
A shift in Guernsey's corporate and individual attitude towards the misuse of data is now central to the Office of the Data Protection Authority's (ODPA's) future approach to governance and enforcement in Guernsey. This article rounds up the key issues which the ODPA has communicated and which will dictate its approach, including changes in workplace culture and the delayed introduction of the self-funded charging system.
Wealth is increasing exponentially among some of the world's richest families to the extent that, for many of these families, it makes commercial sense to set up their own bespoke family office to look after their key operations – and they are increasingly looking to Guernsey as the place to do it. There are a range of factors as to why Guernsey is becoming a jurisdiction of choice in this regard, including political stability and the fact that it has the expertise and personnel to manage family offices well.
This article has been removed at the request of the contributing firm.
It is well known that new investment company listings have been relatively sporadic of late – this is not entirely due to Brexit, but it is clear that Brexit has stalled a number of fundraisings which have gone out to market. Fortunately, once there is some clarity on the way forward, there may be a race to market. Data from the London Stock Exchange (LSE) to the end of January 2019 shows that Guernsey is home to more non-UK incorporated companies listed on the LSE than any other jurisdiction globally.
Two recent cases in the Guernsey Royal Court – one relating to the variation of a settlement and one relating to the winding up of a trust – demonstrate the complex trusts cases that regularly come before the court. The first case involved an application from two mothers on behalf of their children, whose father is a famous professional footballer. In the second, an investment firm, as the sole member of a discretionary class of beneficiaries, applied for a trust to be terminated and the trust fund to be distributed to it.
The Income Tax (Substance Requirements) (Implementation) Regulations 2018, as amended, came into effect on 1 January 2019 and apply to accounting periods commencing on or after that date. The new economic substance requirements apply to certain Guernsey tax-resident companies and have been passed in order to comply with the EU Code of Conduct Group on Business Taxation. This article summarises the current position relating to the substance requirements for fund management companies.
Increasingly stark and startling messages relating to the environment and climate change are now commonplace in the media. That is why it is so refreshing to know that Guernsey is taking a leading role on the world stage and using its strengths to produce a significant positive impact, including through the implementation of the Guernsey Green Fund.
Employers want maximum restriction on employees who leave but must be careful not to overstep the mark as covenants which are unduly restrictive risk being struck out by the courts. As such, employers should be aware that disgruntled employees can file complaints with the Guernsey Competition and Regulatory Authority and might also bring civil actions for damages pursuant to Section 42 of the Competition Ordinance.
The Association of Investment Companies Code of Corporate Governance (AIC code) is a framework of best practice for the governance of investment companies. The new AIC code applies to accounting periods which began on or after 1 January 2019. As such, Guernsey boards are urged to (among other things) review their existing corporate governance arrangements and determine which code is applicable to their companies.
The government has approved new regulations which impose an economic substance test on Guernsey tax-resident companies in order to meet the requirements of the EU Code of Conduct Group. The regulations, which came into force on 1 January 2019, establish tests for tax-resident companies carrying on 'relevant activities', including fund management.
When applying to the court for an order with respect to a trust, it is important to consider how future circumstances are changing and how this might be provided for without the need for further recourse to the court. A recent case involving a Jersey trustee, which had applied to the Royal Court of Guernsey to vary an order previously made by the Royal Court and to invoke the court's power to construe a trustee power under its Public Trustee v Cooper jurisdiction, provides clarity in this regard.
The Guernsey Royal Court recently issued a regulatory decision on prohibition orders, fines and public statements. In this decision, the deputy bailiff found that the Guernsey Financial Services Commission did not have the jurisdiction or power to make prohibition orders that were limited in time; it only had the power to make unlimited prohibition orders (as in the United Kingdom) against the defendant – although it could have indicated when it might be appropriate for the defendant to reapply for a licence.
Two joint administrators recently applied to the Royal Court of Guernsey seeking an order that it issue the High Court of Justice of England and Wales with a letter of request to act in aid of and auxiliary to the Royal Court in recognising their appointment as administrators of a company. While the Royal Court has dealt with incoming letters of requests, in making the application, counsel was unaware of any case where the Royal Court's jurisdiction to issue a letter of request had previously been considered.
The Guernsey Financial Services Commission recently introduced the Guernsey Green Fund designation to provide investment managers with an opportunity to "assure investors that their investments are contributing to initiatives that have a positive environmental impact on the planet and in so doing inspire confidence that their investments are well regulated". The designation is available to registered and authorised schemes run in accordance with the Guernsey Green Fund Rules.
A variety of factors are fuelling a sustained boom in M&A activity around the world, including a number of mega-deals across a variety of sectors. Irrespective of deal size, a wide range of positive factors has driven deal volume. All of this is good news for the financial services community in Guernsey, which is seeing significant growth in work as a result – not least law firms with experienced M&A teams.
The Office for the Environment and Infrastructure recently announced that a new deposit protection scheme will be planned before the end of 2018. The announcement follows news that a local estate agent has ceased trading, leaving some tenants and landlords uncertain of their position with regard to rents and deposits that were being held by that agent. The proposal is likely to be that Guernsey should introduce a similar, if not identical, scheme to that already in place in Jersey.
The Guernsey Court of Appeal recently handed down its long-awaited judgment in M v St Anne's Trustees. On appeal, neither party had challenged the Guernsey Royal Court's decision that Guernsey law should follow Pitt v Holt. Instead, they had focused on arguing that there had been a breach of fiduciary duty and that the Royal Court should have exercised its discretion to grant relief.
The Financial Intelligence Service's recent refusal to consent to a proposed transaction under Guernsey's anti-money laundering reporting regime has resulted in the Royal Court deciding its first private law action between the person claiming the asset and the financial institution holding it. The decision clarifies the legal framework for determining the source of funds, which will be highly relevant to all regulated entities in Guernsey.