A FINANCIAL services ombudsman is likely to be funded by the island’s regulator. The States Policy Council is expected to publish a further consultation paper also recommending that a separate department of the Guernsey Financial Services Commission administer it.

It is more than two years since the first consultation document was issued and it proposed that a scheme would cover all business regulated by the commission, plus other activities such as lending, pensions and possibly consumer credit.

The Finance Industry Policy Advisory Group is now considering a second consultation paper.

Both the Policy Council and the GFSC agree that it would be more cost-efficient for an existing body to operate such a scheme, said the latter’s director-general, Peter Neville.

Significant changes to the original proposals are likely to be that decisions should be binding on both the complainant and the institution and that the scheme should, in more difficult cases, be able to recover its costs from the institution.

The ombudsman and other similar issues are handled by the GFSC’s policy and international affairs division.

It has day-to-day responsibility for the anti-money-laundering and counter-terrorist financing framework and deals with major policy issues.

Recommendations made in the International Monetary Fund’s report on the Bailiwick’s financial regulation were issued for consultation in July 2003, although the majority of changes will be made later this year.

Among other issues dealt with by the division included the signings of memoranda of understanding with overseas regulators, including Malta and the UK.

Changes to company law also regained momentum and, following talks with the Crown officers, it was agreed to promote an amendment law including detailed investment provisions and an increase in the maximum disqualification period for directors from five to 15 years.

A consultation document on these was published in March.

Other work done by the division included the collation of statistics from 151 institutions for submission to the IMF for its coordinated portfolio investment survey.

These figures, representing 935 entities, showed that the total value of cross-border investments at the end of 2002 was US$85.1bn, an increase of $17.6bn on the previous year.

The increase was due to the amount of reportable securities held and the weakening of the dollar during the year, which had a significant impact on the results.