Regulation Of Trust & Corporate Service Providers In Gibraltar - Acquarius

By Author: Acquarius
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Gibraltar's financial sector thrives under a strong yet balanced regulation, ensuring credibility, compliance, and a business-friendly environment.
It is bold to suggest that regulation of the Trust & Corporate Services Provider (TCSP) sector here in Gibraltar is world-class and amongst the best found anywhere. However, this is not just a nod to local interests but my honestly held view. Let me explain.
Robust regulation is crucial to the financial services industry. It is key to the sector’s development that has grown exponentially since “offshore” first became a thing seventy years ago.
More than providing protection to clients and their advisers, regulation adds to the overall credibility of a jurisdiction. It is a pillar upon which we rely to differentiate ourselves from our peers. – something we use to promote Gibraltar compared to other UK overseas territories, crown dependencies and the rest. Around twenty-five recognised international finance centres exist worldwide, although the number depends on the definition used. The EU, for example, continues to list more than forty on its website. ...
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Locally, the Gibraltar Financial Services Commission (GFSC) regulates the industry. Its stated aims are to protect consumers, while enhancing our reputation as a high-quality financial services centre and, crucially, promoting good business. Gibraltar is very well regulated - but not overly so. At both ends of the spectrum, there are locations where regulations are either lax – avoid those at all costs – and conversely some more risk averse centres that adopt a more draconian approach.
The mainstream financial centres – including all the British territories – follow the same basic rules but it is their tone and implementation that sets us apart. Gibraltar has built a hard-won, but fully deserved, reputation as a centre with decent legislation in place. Through proactive, dynamic interaction with its regulated entities, the rules are followed, and any transgressions swiftly dealt with. Decent, sustainable, business is the result.
The GFSC regulates all financial services activity locally, except the legal profession controlled by The Legal Services Regulatory Authority (LSRA). Its remit covers TSCPs such as Acquarius, together with auditors, banks and e-money institutions, payment services providers, funds and fund service providers, insurance companies, investment firms and insolvency practitioners.
Thus, the entire industry is served by a single authority operating to the same set of standards across its remit. Naturally, different rules apply to the various sectors involved but, under GFSC supervision, we all work together as one single regulated jurisdiction. To me, this is a concrete example of #TheGibraltarDifference at work. Life is more straightforward whilst in no way lowering standards.

To become regulated in Gibraltar, businesses must comply with GFSC requirements from the outset, i.e. when still in a “set up” phase; there is no “grace period” for sub-standard applications. Anyone dealing with a local financial services firm may rest assured that regulated status is conferred on a firm only when it – and its officers – have complied with all the rules. On an ongoing basis, firms must continue to comply with GFSC supervision that is both strictly but fairly enforced. If a firm loses its regulated status for any reason, it is out of business immediately.
Moreover, the GFSC acts immediately on those rare occasions where a firm falsely claims to have regulated status. This approach benefits all of us who abide by the rules as we work to enhance still further Gibraltar’s reputation as a fine place to do business.
Regulatory practice differs from place to place. For example, in the UK, Britain’s financial services are regulated by separate bodies – the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) both of which regulate banks and insurance companies. UK TCSPs must register separately with HMRC for supervision under the money laundering regulations, unless they are already supervised by another body.
For me, the single regulatory option is hugely advantageous. Granted, Gibraltar is a small jurisdiction compared to the UK and others, but regulatory standards are no less strictly enforced as a result. Moreover, as directors and officers are also regulated, an element of double protection is assured.
Having said all this, we do not live in a rose-tinted world. It would be foolish to pretend that Gibraltar has never had to deal with “bad actors” in its financial sector, but single regulation ensures swift remedial action is taken.
You or your clients may be considering an international finance centre in which to establish a trust, international headquarters or holding company, foundation and the rest. Look for one where regulation is not just prescribed in law but where implementation is both consistent and efficiently robust. The British have always maintained a reputation for decent regulatory standards and in Gibraltar, these are consistently upheld across the industry. Please get in touch, without obligation, to discuss your options.