MORE teeth will be given to the Guernsey Financial Services Commission, if the States agrees. The commission is moving to a more principle-based approach to regulation.

‘In such a framework, more flexibility is given to financial services businesses and, consequently, they carry more responsibility for the way they make use of that flexibility,’ said Chief Minister Mike Torode in this month’s Billet d’Etat.

‘The potential increased risk which this could bring to customers of those businesses and the reputation of the Bailiwick needs to be mitigated by a more flexible range of sanctions and by some potentially greater sanctions.’

The Policy Council proposes giving the commission the power to name and shame companies and impose discretionary penalties against anyone flouting the regulatory rules.

It also recommends that the Royal Court should hear appeals against the commission’s decisions.

In a separate report, the council recommends legislative changes to enhance the development of the finance sector.

It would also increase investor protection and help the finance industry to be seen as fair, efficient and transparent.

The proposed changes will affect The Protection of Investors Law, The Control of Borrowing Ordinance and The Company Securities (Insider Dealing) Law.

The Commerce and Employment Department also wants two insurance laws amended following recommendations from the GFSC.

It a letter to the department, it said the changes would ensure that Guernsey’s insurance laws remained up to date and continued to meet international requirements by operating in an appropriately regulated and efficient manner.

The Insurance Managers and Insurance Intermediaries Law and The Insurance Business Law would be affected.

The States will also be asked to approve three pieces of legislation: The Trusts (Guernsey) Law 2007; The Criminal justice (Aiding and Abetting etc.) (Bailiwick of Guernsey) Law, 2007; and The Transfer of Funds (Guernsey) Ordinance, 2007.