Gibraltar to transform authorisation processes with ‘staged approach’

The Gibraltar Financial Services Commission (GFSC) released, on 6 November, the response to a consultation on its proposed ‘Staged Application for Authorisation Approach’, which is designed to introduce a more structured and refined approach to the authorisation application process from the start of 2024.

“Ensuring the robustness and thoroughness of the regulatory permission process, which falls under the responsibility of the GFSC, is of paramount importance. Simultaneously, the aim is to expedite the regulatory application outcomes to leverage one of our key jurisdictional advantages, which is speed to market,” said Financial Services Minister Nigel Feetham.

“I extend my thanks to the GFSC for proactively engaging with the industry to gather their perspectives and for the numerous comprehensive responses received. I eagerly anticipate the implementation of the enhanced process commencing in 2024.”

The Staged Approach will allow the GFSC to apply a risk-based approach to applicants seeking to carry on one or more regulated activities under part 7 of the Financial Services Act 2019. It focuses on the submission of critical core information at an early stage to ensure that speed to market underpins the whole process while also meeting the GFSC’s regulatory objectives.

As such, the threshold conditions in the Act and any sector-specific threshold conditions, core business model, capital, key individuals, and key elements of the proposed operations of an application will be assessed first.

Once the GFSC is satisfied with the information received at each stage, it will then seek further information through the subsequent stages of the application process. This information will build on the core information already provided, progressing towards submission of all relevant application documents.

The Staged Application Process is designed to follow directly on from the pre-application process, which allows the GFSC to identify any concerns early on and avoids applicants submitting a full application (with the corresponding application fee) that is unlikely to be successful.

The application for authorisation process has been divided into three stages, which applicants will move through sequentially, with the addition of a fourth ‘mobilisation’ stage for applications from the Banking, E-Money, Investments Class 2 firms and Distributed Ledger Technology (DLT) sectors.

Each stage requires that specific documentation and information is provided as follows:

• Stage 1 – Business Model, Capital and Key Individuals.
• Stage 2 – Risks Framework, Financial Crime, Business Continuity, Corporate Governance and IT Systems.
• Stage 3 – Non-Financial Resources, Compliance Structure, Conduct of Business, Key Performance Indicators (KPIs), Consumer Duty and Operational Resilience.
• Stage 4 – Mobilisation – Systems Testing.

The GFSC intends to move applicants through the first three stages within a maximum period of six months, with a further period of three months for Stage 4 for the Insurance, Banking, Investments Class 2, E-Money and DLT sectors. The time taken to process an application will depend on the quality and extent of information provided by the applicant, as well as the timeliness of its submission.

“The response paper published today addresses key areas of feedback raised by industry following on from the consultation that was launched back in August,” said GFSC chief executive Kerry Blight. “The paper echoes our priority of ensuring speed to market and preserving the highest of international regulatory standards within the jurisdiction. We look forward to introducing the new staged approach at the start of 2024.”

“This is another example of the excellent and refreshing approach taken by the GFSC to ensure that Gibraltar not only remains competitive as an International Finance Centre, but also that it keeps evolving and remains easy to do business here,” said Nico van Zyl, Managing Director of Sovereign Trust (Gibraltar) Ltd.