GFSC’s annual report puts upbeat focus on life after Brexit

By Peter Schirmer

Help for the financial services industry in negotiating the Brexit process and its aftermath is promised by the Gibraltar Financial Services Commission in an up-beat annual report published this week.

The publication is accompanied by an extensive outline of the Commission’s ‘Business Plan’ for the period until the end of March next year, and comprehensive proposals of how it will function in the two following years.

The Commission plans to “position itself” in a way which supports both the Government and the financial services sector “to successfully and safely navigate the jurisdiction’s exit from the EU, and carefully manage the implications this may have for financial services providers and their customers, wherever they are located,” according to the main thrust of the eight-point plan.

Among the other aspirations outlined by the Commission’s CEO Samantha Barrass and her team is the promise “to be aware of the role innovation can play in adding value to the delivery of financial services to the consumers both in terms of choice n quality.”

It also promises always to be “pragmatic, proportionate and accessible in the way we supervise and apply regulatory requirements, and in the way we interact with stakeholders.”

And it adds that “priorities” for the year will include better communication with stakeholders by establishing and developing an ‘Enhanced Monitoring team’ which will ensure that the Commission’s senior management pay greater attention to individual firms.

And it points to the fact that this approach has already be outlined and explained to the Rock’s insurance industry.

This sector, the annual report discloses, accounts for 40 per cent of the Commission’s annual fee income of nearly £5.9 million, all but £80,000 of its entire revenue.

In their specific contributions to the annual report, both the Commission’s chairman Dr Jonathan Spencer and CEO Ms Barrass emphasise the importance of this sector to Gibraltar’s finance industry.
Mr Spencer refers to it as an “area of focus of ongoing work for the GFSC” which saw £4.8 billion gross premiums written from Gibraltar in the year under review.

“Following the success of a market-wide review exercise of firms' Solvency II balance sheet and solvency capital requirement calculations in 2016/2017, the GFSC conducted a subsequent tailored review in 2017 /2018 which assigned firms different quality assurance requirements based on the risk and complexity of their Solvency II reporting,” Mr Spencer writes.

And, in the broader context he adds: “The road ahead for Gibraltar as an international finance centre has seen the Commission develop and deliver a strategic engagement plan.”
“This has involved substantial proactive work with the various international standard setting bodies we belong to and cooperate with.”

“Our approach was a key pillar of our strategic communications plan and will be cemented and developed over the coming year to enhance and further progress our collaboration and international relationships.”

“It is essential that the Commission is seen domestically and internationally as an effective and credible regulator, and I believe that real strides have been made this year to cement our position in this regard.”

Looking to the future, Ms Barrass, who sees the past year as predominantly one of change, is “particularly mindful of the challenges, not just from Brexit, but also the considerable task of being ready to competently regulate the business models in firms who are coming through the new DLT (and ICO) regulatory framework.”

The underlying capital market characteristics of these business models take regulation into new areas, she writes.

“This has profound implications for our resourcing model and the coming year will see a strong focus on building our capacity and capability in this area.”

Currently the Commission employs 79 staff who earn salaries totalling slighly more than £5 million annually.

*The annual report and accounts will be reviewed in full in Friday’s Money Column.