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News
DLT Regulations come into force
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enhance IT intelligence databases, and liaise with the industry to “raise awareness of financial crime risks and the important role that firms play in ensuring that financial crime is identified and mitigated”. It will target “activities that dishonestly generate wealth for those engaged in a criminal conduct, or activities that protect the proceeds of illicit activities”, including bribery, corruption, fraud and market abuse.
Supervision of licensees has been stepped up and featured “intrusive interaction where necessary in order to protect consumers and policyholders”. Barrass said it was “critical that there be real and meaningful consequences where unacceptable behavior has occurred and our action in this area is underpinned by a real desire that those firms and individuals that pose an unacceptable risk to our regulatory objectives are controlled or removed from the financial services environment and that our work in this area serve as a credible deterrent to others.”
A Legislative Reform Programme to
overhaul financial services and related Gibraltar legislation should be complete by mid-2018 and as a result, the GFSC also hopes to gain a much greater financial deterrent.
Intervention used
In the review year a senior legal adviser was appointed and is supporting work “to address the legacy of poor performing insurance companies, particularly in relation to the application of our regulatory powers, including the appointment of skilled persons and inspectors”. This has enabling intervention in relevant companies, and the GFSC has “effectively resisted legal challenges to the use of our powers”.
Gibraltar is a net exporter of insurance - over 97% of premiums being written outside of Gibraltar's - with the UK accounting for in excess of 80% of premiums. The Commission was shaken by the unprecedented scale of the insolvency of insurance giant, Enterprise, in mid-July 2016 with a deficit of £96m and “a number of contraventions of insurance legis- lation”, the thrust of continuing investigations by the GFSC enforcement team.
There had been “a significant increase in insurance companies coming to Gibraltar”, Barrass said despite the prospect of Brexit, but GFSC was unable to provide comparative figures for license applications. “There is a strong attraction for companies outside of Gibraltar and outside of the UK to secure access to the UK, and Gibraltar is an attractive option”, she insisted.
Key to the jurisdiction being considered a credible regulator has been growing relationships and joint activity with European and international standard setting, regulatory and enforcement bodies. Establishment of the European Insurance and Occupational Pensions Authority - which GFSC helped to spearhead - for information exchange and supervisory collaboration in respect of firms, that have a presence or are active in multiple European jurisdictions, “is indicative of our pragmatic, inclusive approach”, Barrass emphasised and “has clearly illustrated our willingness to cooperate with regulatory counterparts to levels that previously have been largely unprecedented in the global regulatory environment.”
Ray Spencer
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Gibraltar International
www.gibraltarinternational.com