icsa guernsey conference 2017, 26 april

ICSA Guernsey Conference

St Pierre Park Hotel Spa & Golf Resort

Wednesday 26 April

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Password: HPH112233

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Welcome and introduction

Paul Smith, Vice Chairman

ICSA Guernsey Branch Council

The art of minute taking: new ICSA guidance

Peter Swabey FCIS, Policy and Research

Director, ICSA

The minuting of meetings

The minuting of meetings

Consultation published 23rd May

– closed 24th June

89 responses to 31 questions

2,759 answers

Summary of feedback now

published on

www.icsa.org.uk/minutetaking

http://www.icsa.org.uk/minutetaking

So what did we find ?

• Good minuting is a deceptively difficult and time consuming task

which is often under-valued, notably by directors. It is far more than

an administrative formality

• An enormous variety of minute taking practices

• Many people are absolutely convinced that they take minutes ‘the

right way’

BUT…..

So what did we find ?

There is no one-size fits all approach for minute-

writing and no ‘right way’ to draft minutes

• Context is always important and each chairman and each board will

have their own preference for minuting style

• It is up to each individual organisation to decide how best its

meetings should be recorded

What are minutes for?

• The purpose of minutes is to provide an accurate, impartial and

balanced internal record of the business transacted at a meeting

• Minutes should document the reasons for the decision and include

sufficient background information for future reference – or, perhaps,

for someone not at the meeting to understand why the board has

taken the decision that it has.

‘to record key points of discussion, record decisions and the reasons

for decisions, and agreed actions’

‘accurate’, ‘impartial’ ‘balanced’ ‘to demonstrate challenge’


In simple terms, their purpose is to record what

was done, not what was said but with sufficient

context to give assurance that it was done

properly


‘They should be the single source of truth, and should be a complete, self-standing record

(together with the papers). They should act as evidence of the meeting and as a record of

those matters discussed/noted, concerns raised, decisions made and, where considered

helpful, the rationale for those decisions, and demonstrate the directors acting in accordance

with their duties under the Companies Act.’

Sectoral variation:

• A charity or public sector organisation may focus more on ensuring there

is clear accountability visible through the minutes

• A regulated financial services company is more likely to focus on

providing evidence of robust decision making.

Who is responsible for the minutes?

• The Company Secretary … or other governance professional is

responsible to the chairman for the preparation and retention of

minutes

• The chairman and the other members of the board are responsible

for confirming their accuracy

• The person taking minutes should be properly qualified to do so – i.e.

they should have the necessary knowledge and skills

• Too often minuting a meeting is left (at short notice) to a junior

member of staff without the appropriate experience or training

The accuracy of minutes is the responsibility of the full board


Key skills of a good minute taker include being able to:

• listen to multiple voices at the same time and capture both their

arguments and tone

• summarise an argument accurately and record decisions taken and

action points on which to follow up

• identify which parts of the discussion are material and should be

recorded

• have the confidence to stand firm when someone asks them to

deviate from what they believe to be an accurate record

• have the confidence to ask for clarification

•

Listen to multiple voices

Listen to multiple voices ……


• Wherever possible, the company secretary should be supported at

the meeting by a suitably skilled minute taker if one with the

necessary skills is available

• It is generally a good idea for the company secretary to discuss with

the chairman before the meeting any relevant procedural issues

and, perhaps most importantly, how they can best support the

chairman

Drafting minutes

• It can take at least as long, often twice as long, to draft minutes as the

meeting itself took

• It may be helpful to develop a minute taking policy or style guide to set

the house style and conventions. This could be approved by the board

• Minutes are normally written in ‘reported speech’ style; they should not

be a verbatim record of the meeting

• The minutes should be clear, concise and free from any ambiguity as

they will serve as a source of contemporaneous evidence in any

judicial or regulatory proceedings

Drafting minutes – preliminary information

• The infrastructure of the meeting

• Who, where, when, what, how etc

• Quorum

• Directors’ duties

• Conflicts of interest

‘These items are not legal boilerplate and are important. The wording of

the guidance should be revised.’


Quorum

• A matter for each individual organisation

• Probably only need be mentioned if there were a lot of

absences, or a high quorum requirement such that there might

be doubt

• For example, if one or more directors have to absent themselves owing to a

conflict of interest

• Of course, if the chairman does mention quorum it should be

minuted

• It is the responsibility of the company secretary to be aware

whether the meeting is quorate at all times, and advise the

chairman should this not be the case


Conflict of interests

• Legal, regulatory and constitutional requirements must be observed

• Unless the sectoral regulator requires otherwise, it is reasonable only

to refer to conflicts of interest in the minutes where:

• the chairman or another board member raises the issue, which they might do if there is

a perceived risk of a conflict arising

• a potential or actual conflict of interest is declared by one or more of those present

• a conflicts register is circulated, tabled or reviewed as part of the business of the

meeting

• it is necessary to amend the conflicts register.

Drafting minutes – level of detail

• The degree of detail recorded will depend to a large extent on:

• the needs of the organization

• the sector in which it operates and the requirements of any regulator

• the working practices of the chairman, the board and the company secretary.

• As a minimum, however, we would expect minutes to include:

• the key points of discussion

• decisions made and, where appropriate, the reasons for them

• agreed actions, including a record of any delegated authority to act on behalf

of the company

Drafting minutes – naming names

• Individual contributions should not normally be attributed by name, but this

will be appropriate in some cases. Practice is changing in this area,

particularly in the corporate sector

• Demonstrate individual director participation and challenge

• Equally it became clear that the charity and public sectors have very

different practice whereby individual contributions are often attributed.

• Once again this is a matter for individual organisations

• Guidance includes suggestions on where it will usually or may be

appropriate


• Some strongly held views against recording detail

“The purpose of the minute is to record the decision. The minute should not

replicate what is in the board paper. The reason for the decision is unnecessary

detail, the paper could be referenced instead.”

Drafting minutes – dissent

Drafting minutes – dissent

• Most board decisions are reached by consensus

• However, in exceptional circumstances, where the whole board cannot

reach agreement, individual directors may request that their dissenting view

be recorded in the minutes. It is normal to comply with such requests

• The question of how dissent is recorded will be a matter of organisational

preference.

• One suggestion for specimen wording might be:

‘There was a robust discussion about x, with considerable challenge around

a, b, c and d. The board agreed to y, with Mr z requesting that his dissent

be recorded.’

Drafting minutes – other matters

• If board papers are received for noting and no decision is

required, then unless there is material discussion that needs to

be recorded, minutes should indicate that the relevant report

was ‘received (or reviewed, if that is what happened) and its

contents noted’

• Conflicts of interest

• Legal professional privilege

• Offshore companies

• “not for the minutes”

Drafting minutes – the regulator

• Minutes are increasingly used to demonstrate that the directors have

fulfilled their statutory duties• evidencing appropriate challenge in order to hold the executive to account

• showing that issues of risk and both shareholder and stakeholder impact have

been properly considered

• Minutes should facilitate regulatory oversight, but this is not their primary

purpose

• Nonetheless, those drafting minutes should be mindful of regulatory needs

• The well-written minutes of an effective board meeting should convey all

the assurance that a regulator requires

Review and approval of draft minutes

• Draft minutes should be clearly marked as such and amendments to the

draft minutes should be thought of as ‘enhancements’ rather than

‘corrections’

“Editing by board members who are ultimately responsible for the

accuracy should not be regarded as a failing on the part of the person

drafting the minutes but a sign that responsibilities are understood and

taken seriously.”

• Need to guard against attempts to rewrite history

• The audio recording of board meetings or the publication of board

minutes is not, generally, recommended

• Treatment of ‘post-meeting events’

• To redact or not to redact …..

Access to the minutes

• Who – auditors, regulators and other third parties

• For example, as a board responsibility, minutes should be included

as part of the board evaluation process

• What – unrestricted / restricted (e.g. senior audit partner) / view-only /

redacted

• How – electronically / minute book / electronic portal

• Publication of minutes

• Retention of minutes

Company secretary’s notes

• Great care should be taken with the company secretary’s notes of the

meeting, both in terms of content and retention. We recommend that

they are destroyed once the minutes to which they relate have been

approved

• Wide variety of practices

• Retention periods ranged from as soon as they were written up to

pretty much forever

‘only one version of the truth is required’

The minuting of meetings – only record of the meeting

Conclusion

• A very interesting and rewarding process

• 89 responses to a consultation – isn’t it great that there are so many

people with such strongly held views?

• All this may suggest that minute taking is a necessary yet thankless

task, but as one respondent to our consultation asked, how many

other people in an organisation get their work in front of the board as

frequently and consistently as company secretaries?

• Thanks to everyone who shared with us their wisdom and experience

gained from minuting literally countless meetings and, in particular, to

Colin Passmore at Simmons & Simmons and Carol Shutkever at

Herbert Smith Freehills for their guidance and support.

Further information

www.icsa.org.uk/minutetaking

http://www.icsa.org.uk/minutetaking

Thought leadership from ICSA

The Future of AGMsPeter Swabey FCIS, Policy and Research Director, ICSA

Chris Hodge, Policy Consultant, ICSA and former Director

of Corporate Governance, FRC

Susan Swabey FCIS, Company Secretary, Smith and

Nephew plc

Practical workshop: Cyber security

Rob Shapland, Principal Cyber Security

Consultant, First Base Technologies LLP

Rob Shapland, First Base Technologies LLP

Cyber Workshop

© First Base Technologies LLP 2017

Penetration Tester and Social Engineer at First Base Technologies since

2008

• Offensive Security Certified Professional – 24 hour exam

• Social Engineer – trained by Chris Hadnagy, world-renowned social

engineering expert

• Trained in Kidnap Escape and Evasion

• Published technical writer

• Media and conference speaker

• Fire jumper

Who is Rob Shapland?


Agenda


• Basic Cyber Security Requirements

• Secure the Human

• Secure the Technology

• Understanding the threat

• Understand that cyber security is not just a job for IT, it needs to be embedded in the entire firm

• The board needs to take ownership and responsibility for cyber security

• This needs to be filtered down to all staff by continual training and awareness

• Understand your key information assets and assess their vulnerability to attack

• Has responsibility for cyber risk been allocated? Is it on the risk register?

• Understand the impact if a data breach occurs (reputation, financial impact), and have a plan

• Understand who might attack – regular briefings to the board from CISO or industry experts

• Encourage information sharing with other firms

Basic Requirements


• Regular security awareness training, covering at a minimum:

Email Phishing

Social engineering

Safe use of social media

Passwords

• Email phishing testing

• Social engineering testing – telephone and building security

Step 1: Secure the Human


• Understand where your sensitive data is and who has access, then lock it

down. This includes in the cloud

• Think about who might attack you and the methods they would use

• Enforce strong passwords on all interfaces (including the wifi network)

• All external interfaces protected by two-factor authentication

• Regular patching on ALL devices

• Regular penetration testing of external and internal devices, and applications

• Email filters, endpoint protection

Step 2: Secure the Technology


Understanding the Threat


Consequences of an Incident …


• Reputational damage

• Loss of client confidence

• Reduction in market share

• Forfeit of competitive edge

• Loss of jobs

• Organisational failure

• Fines

Cyber Threat Actors


Nation States Global competition, national security, fraud

Organised Crime Illicit profit, fraud, identity theft

Actor Motivation

ActivistsIdeological, political, disenfranchised, malicious havoc

Terrorists Ideological, political

InsidersPersonal advantage, monetary gain, revenge, ideological

Individual Hackers Ego and peer approval, curiosity, ideological

CompetitorsCompetitive advantage, damage to competitor

Loss of intellectual property, disruption of systems, financial loss, regulatory issues

Loss of IP, financial loss, privacy issues, regulatory issues, damage to brand

Impact

Data destruction, disruption of systems, regulatory issues, damage to brand

Data destruction, disruption to systems, regulatory issues

Loss of intellectual property, disruption of systems, financial loss, regulatory issues

Data destruction, disruption of systems, regulatory issues, damage to brand

Loss of intellectual property, regulatory issues, damage to brand

What do these Threats have in Common?

Social Engineering

Obtaining something by exploiting trust or the ignorance or naivety of

others

It works on the human factor

… frequently called “the weakest link”!


More Information?


Email: [email protected]

Twitter: @rdshapland

LinkedIn: Rob Shapland

mailto:[email protected]

Join the conversation

@ICSA_News

#GuernseyConf17

Client Due Diligence

Tim Andrews, Director, Ipes

54

Tim AndrewsThe ID Register, Ipes

Welcome to the ID Register

Connect to

Create Profile Counterparties

DD Anyone anywhere

Risks Self Control

Screening

FATCA & CRS Relax & keep updated.

Continuously screened

Validation & evidence alerts

55

The ID Register

56

The ID Register

57

The ID Register

58

Due Diligence Pack

59

01/01/2014 31/12/201601/04/2014 01/07/2014 01/10/2014 01/01/2015 01/04/2015 01/07/2015 01/10/2015 01/01/2016 01/04/2016 01/07/2016 01/10/2016

30/06/2014

FATCA Goes Live

01/03/2015

Online DD Requested

30/04/2015

5/6ths Responses Received

31/05/2015

FATCA 2014 Reporting Submitted

01/10/2015

ID Register Begun

01/09/2016

Official Launch

22/07/2016

ID Register Live

01/04/2016

Panama Papers

Our Story

60

• We certified 8,500 investors for FATCA in 2014 and needed an efficient

solution.

• 5/6ths of investors responded online.

• FATCA and CRS information is a subset of KYC requirements.

• The ID Register is live with 10,500 investors and over 100 Fund groups

FAQs

61

Is this outsourcing? No.

Your firm is not delegating any services or

responsibilities to The ID Register. Your firm is entering

into a contract for services, these being the access to

an independent data source of Customer Due Diligence.

How does content comply with

AML/CFT requirements?The standards within The ID Register are driven from

the FATF Recommendations with specific consideration

being given to the AML/CFT requirements applicable to

UK and Channel Islands regulated businesses.

a. Certification Certification can be undertaken by two methods.

The first is through the digital certification method built

into the system where the profile owner uploads a

document and requests a suitably qualified person to

certify the document. This document will have

certification wording digitally imprinted into the

document.

The second is through the uploading and validation of

previously certified documents where the profile owner

will upload documents that have previously been

certified in wet ink.

How secure is the site? No site is immune from attack, but in important respects

The ID Register is even more secure than popular social

platforms:

• Fully encrypted database

• Penetration tested software

• Hosted on Azure

• Full SSL encryption from servers to browser

An improvement from paper, email and Excel.

FAQs

62

E-KYC has not come yet – why not?

What does the Regulator say?

Yes – in Guernsey from November 2015.

Can we outsource MLRO responsibility too?

Yes – Handbook & Thematic Review June 2016 with suitable training.

Incomplete, tech-heavy products

Document sharing, individuals only, in-house software, focussed on banks.

Someone else try it first

www.ipes.com/investorservices

My client list is private & cross contamination fears

Own your own data

63

http://www.gfsc.gg/The-Commission/Documents and Forms/20160608 - Financial Crime Training Thematic Review Report.pdf

http://www.ipes.com/investorservices

GRC professionals: increasing your value in the workplaceDavid Press, Managing Director, DMJ Recruitment

Rory Strong, Managing Consultant, DMJ Recruitment

Sharon Spruce, Learning and Development Specialist,

Skills Solutions

Hayley Tanguy, Director, Aztec Group

Maximising your skills in the workplace

How to climb the business ladder by increasing your value as an employee within your company

David Press, Managing Director – DMJ Rory Strong, Managing Consultant - DMJ www.dmjrecruitment.com

http://www.dmjrecruitment.com/

1. Be clear about your long term career objectives

Pursue this with intent



• Recognise your talents

• Understand your work and what it takes to do it well

• Be open-minded and flexible around what you are trying to do

• Plan ahead – what else could you be doing to shape out your skills.



2. Ask for more responsibility



• Manage your boss – take work of their hands, they will be grateful

• Ask to get involved in areas outside your remit to broaden your skills



3. Take Some Career Development Risks



• Chart a career path and involve management and HR in the process

• Speak your mind – voice opinions to show you are invested



4. Continual Professional Development



• The more skilled you are, the easier it will be for you to advance

• Become the ‘Go To’ person for specific matters

• Public speaking marks you out as an expert and a leader



5. Play Your Part in Developing Others



• Good managers attract talent, drive performance, engagement and retention

• Learning and development is very important to those early on in their career



6. Network, Network, Network



• Professional network is invaluable to developing your career

• Cultivate relationships with colleagues, mentors, contemporaries

• Great place to evaluate opportunities and problems



7. EQ versus IQ



• Understand the language around the board table

• Think about behaviour, how you execute your job and your impact on others.

• Be politically astute but non-political in how you do it. Remain neutral



8. Balance Work, Education and Fun



• Keep energy levels up – create fun!

• Encourage fresh thinking – is there a better way?



Networking lunch

Dysfunctional leadership in organisations

Dennis Tourish, Professor of Leadership and

Organisation Studies, University of Sussex

Dennis TourishProfessor of LeadershipSussex UniversityCo-editor of ‘Leadership’Email: [email protected]

DYSFUNCTIONAL LEADERSHIP IN CORPORATIONS

Ken LayAKA ‘Kenny Boy’

Jeffrey Skilling

Amazon April 2017 -180,007 books with ‘Leadership’ in their title. If you read one every day including weekends it would take you 493 years….

BUT – there are only168 books with ‘Followership’ in their title We have a fixation on leadership, though without followers there are no leaders…

SOME ASSUMPTIONS

• Followers should conform – mostly, do what they are told

• Leaders know best

(but do they always?)

• Dissent is resistance to be overcome

Who’s the bossBBC 2March 2016

KEY LEADERSHIP INSIGHT

The norm of reciprocity

‘I’m not going to Ted’s funeral.He won’t be coming to mine.’

INVOLVEMENT… AND POWER

WHAT ABOUT TRUST?

• Survey of 33,000 people in 28 countries

• CEO credibility dropped worldwide, by 12% from previous year

• At an all time low of 37% who say CEOs are ‘credible’

Edelman Trust Survey, 2017

‘You’re an evil bastard, Gilroy. I like that.’

A MAJOR SOURCE OF ERROR???

‘The temptation to tell aChief in a great positionthe things he most likesto hear is one of thecommonest explanationsof mistaken policy. Thusthe outlook of the leaderon whose decision fatefulevents depend is usuallyfar more sanguine thanthe brutal facts admit.’

Winston Churchill (1931)

INGRATIATION...

EFFECTS OF FLATTERY

• A study of 451 CEOs looked at the impact on them of more intense and frequent flattery (e.g., offering exaggerated compliments) and opinion conformity (e.g., expression of agreement even when people don't agree).

• Flattery and opinion conformity linked to CEOs having more favourable evaluations of their own strategic judgments and leadership skills, being less likely to make strategic changes when firm performance suffered, and more prone to lead firms that suffered persistently poor performance.

Hyuan Park, Westphal and Stern, ASQ, 2011

EFFECTS OF NARCISSISM

• Highly narcissistic CEOs less responsive to whether recent firm performance was good or bad - continued to make equally risky investments (e.g. acquisitions of new companies) regardless of recent performance. Their less narcissistic peers more cautious in bad times and tended to take bigger risks during good times.

Chatterjee and Hambrick, ASQ, 2011

IRRATIONAL BIAS–ILLUSORY SUPERIORITY

• 69% of drivers consciously worry about being killed when driving

• Only 1% believe they drive worse than average

• 98% think they are safer than, or as safe, as the average driver. Brake (Road Safety Charity) Survey of 800 UK adults, March 2011

MEA CULPA

• More than 90% of professors think they are in the top half of their profession!

Trivers, 2011

People are especially sensitive to negative input – the ‘automatic vigilance effect’

Which of these movies would you prefer to see?

HOW WE TREAT CRITICAL FEEDBACK

• Subjecting critical

feedback to criticism/ accepting positive feedback

• ‘I DON’T BELIEVE IT’

• Deny failure

• Alternative

facts??

http://images.google.co.uk/imgres?imgurl=http://www.mayer-immobilier.com/anim-i-dont-believe-it-VictorMeldrew.jpg&imgrefurl=http://www.mayer-immobilier.com/pg-1&h=300&w=300&sz=13&hl=en&start=1&tbnid=PSJQjoBbew2V-M:&tbnh=116&tbnw=116&prev=/images?q%3DVictor%2BMeldrew%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en

http://images.google.co.uk/imgres?imgurl=http://www.mayer-immobilier.com/anim-i-dont-believe-it-VictorMeldrew.jpg&imgrefurl=http://www.mayer-immobilier.com/pg-1&h=300&w=300&sz=13&hl=en&start=1&tbnid=PSJQjoBbew2V-M:&tbnh=116&tbnw=116&prev=/images?q%3DVictor%2BMeldrew%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en

WHAT CAN BE DONE?

• Seek out formal and informal contact with people as often as possible

WHAT CAN BE DONE?• Scrutinise positive

feedback more rigorously than negative feedback

• Institutionalise dissent into the decision-making process – e.g. promote/ cherish/ reward contrarians

• Create a culture that confronts ‘the brutal facts of reality’ – i.e. where the truth is heard

http://images.google.co.uk/imgres?imgurl=http://slapnose.com/images/blog/0606/0606-inconvenient-truth.jpg&imgrefurl=http://slapnose.com/archives/2006/06/26/an_inconvenient_truth/&h=520&w=379&sz=33&hl=en&start=32&tbnid=y8j31bn7WajfTM:&tbnh=131&tbnw=95&prev=/images?q%3Dtruth%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en%26sa%3DN

http://images.google.co.uk/imgres?imgurl=http://slapnose.com/images/blog/0606/0606-inconvenient-truth.jpg&imgrefurl=http://slapnose.com/archives/2006/06/26/an_inconvenient_truth/&h=520&w=379&sz=33&hl=en&start=32&tbnid=y8j31bn7WajfTM:&tbnh=131&tbnw=95&prev=/images?q%3Dtruth%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en%26sa%3DN

http://images.google.co.uk/imgres?imgurl=http://www.biblepicturegallery.com/Samples/ca/editors/sideline/An ostrich with his head in the sand.gif&imgrefurl=http://www.biblepicturegallery.com/pictures/Sideliners/An ostrich with his head in the sand ca.htm&h=480&w=640&sz=23&hl=en&start=14&tbnid=C6XpT2nu579vuM:&tbnh=103&tbnw=137&prev=/images?q%3Dostrich%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en

http://images.google.co.uk/imgres?imgurl=http://www.biblepicturegallery.com/Samples/ca/editors/sideline/An ostrich with his head in the sand.gif&imgrefurl=http://www.biblepicturegallery.com/pictures/Sideliners/An ostrich with his head in the sand ca.htm&h=480&w=640&sz=23&hl=en&start=14&tbnid=C6XpT2nu579vuM:&tbnh=103&tbnw=137&prev=/images?q%3Dostrich%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en

A CLIMATE WHERE THE TRUTH IS HEARD

Lead with questions,

not answers

Practice saying:

• ‘I don’t know’

• ‘What do you think?’

• ‘Where have we gone wrong?’

• ‘What could we do better?’

http://images.google.co.uk/imgres?imgurl=http://teaching.cs.uml.edu/~heines/images/questions.gif&imgrefurl=http://teaching.cs.uml.edu/~heines/images/&h=313&w=450&sz=59&hl=en&start=2&tbnid=QNgTCNRJ58ZjXM:&tbnh=88&tbnw=127&prev=/images?q%3Dquestions%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en

http://images.google.co.uk/imgres?imgurl=http://teaching.cs.uml.edu/~heines/images/questions.gif&imgrefurl=http://teaching.cs.uml.edu/~heines/images/&h=313&w=450&sz=59&hl=en&start=2&tbnid=QNgTCNRJ58ZjXM:&tbnh=88&tbnw=127&prev=/images?q%3Dquestions%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en

http://images.google.co.uk/imgres?imgurl=http://www.mod.uk/NR/rdonlyres/821677DF-C671-4B75-BC69-A1D20EE2823A/0/dumb_questions_693x984.jpg&imgrefurl=http://www.mod.uk/DefenceInternet/PictureViewers/DascSafetyPosterCatalogue2.htm&h=984&w=693&sz=112&hl=en&start=40&tbnid=TbBcHOeLNhbDMM:&tbnh=149&tbnw=105&prev=/images?q%3Dquestions%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en%26sa%3DN

http://images.google.co.uk/imgres?imgurl=http://www.mod.uk/NR/rdonlyres/821677DF-C671-4B75-BC69-A1D20EE2823A/0/dumb_questions_693x984.jpg&imgrefurl=http://www.mod.uk/DefenceInternet/PictureViewers/DascSafetyPosterCatalogue2.htm&h=984&w=693&sz=112&hl=en&start=40&tbnid=TbBcHOeLNhbDMM:&tbnh=149&tbnw=105&prev=/images?q%3Dquestions%26start%3D20%26ndsp%3D20%26svnum%3D10%26hl%3Den%26rls%3DGGLR,GGLR:2006-27,GGLR:en%26sa%3DN

A CLIMATE WHERE THE TRUTH IS HEARD

Engage in debate, not coercion

• Have chaotic meetings

• Loud debate

• Heated discussions

• Healthy conflict

[email protected]

Local update: Beneficial Ownership Register

Alan Bougourd, Registrar, Guernsey Registry

Current International Framework

“A beneficial owner in respect of a company means the natural person(s)

who directly or indirectly ultimately owns or controls the corporate entity”

- G8 Action Plan Principles (2013)

- G20 high-level principles (2014)

- World Bank / UNODC StAR Initiative (The Puppet Masters, 2011)

- OECD taxation initiatives: Global Forum on Transparency and the Common

Reporting Standard

- FATF 2014 Guidance on Transparency and Beneficial Ownership

Source – presentation by Alexandra Jour-Schroeder of the EC to Corporate Registers Forum 2017

FATF Recommendation

R.24:

Countries to ensure that there is adequate, accurate and timely information on BO

and control of legal persons that can be obtained or accessed in a timely fashion

by competent authorities

IO.5:

To ensure that legal persons and arrangements are prevented from misuse for

ML/FT, and BO information is available to competent authorities without

impediments

Source – presentation by Mr Kenneth Yap – ACRA Singapore to Corporate Registers Forum 2017

Why are we doing this?

European Commission View

Help business to know who they are doing business with

Help businesses and consumers protect themselves

Protect civil and environmental rights

Save money

Level the playing field

Detect crime


What is the EU doing?

Current EU Framework 4th AML / CTF Directive

Directive (EU) 2015/849 on the prevention of the use of the financial system for

the purpose of money laundering and terrorist financing (4th AML Directive)

•adopted on 20 May 2015;

•Transposition by EU – Member States on 26 June 2017.

Article 3(6): "[…] any natural person(s) who ultimately owns or controls the

customer and/or the natural person(s) on whose behalf a transaction or activity is

being conducted […]: (a)corporate entities and (b) trusts.


International Landscape *Source: UK Govt press release, “PM hosts major summit as part of global drive to

expose, punish and drive out corruption” (12 May 2016) As presented to Corporate Registers Forum 2017 by Mr Kenneth Yap

Transparency Versus Privacy

The Deal

UK view is that the benefit of limited liability is worth the price of transparency

Have they gone too far?

They currently only offer protection when the activities of certain companies can place their directors and

PSCs 2, or someone who lives with them, at serious risk of violence or intimidation. This could be due to

their involvement in a particular sector of commerce or industry. e.g. business licenced under the Animal

(Scientific Procedures) Act 1986, a director or PSC of a company active in the defence industry including a

readily traceable supplier to, or partner of an organisation in the above categories. A company that has

been targeted by activists or a member of a particular religious community where company activities

conflict with the principles of that religion.

This isn’t an exhaustive list, and making an application to restrict access to residential addresses

or to all information will depend on individual circumstances.

What have we done?

Agreement with the UK

In July 2016 there was an Exchange of Notes signed with the Government

confirming that Guernsey will establish a central Guernsey database of beneficial

ownership information

Project Board

The Project Board established in Dec 2016 with representatives from Government,

Industry, the GFSC, the Registry and Law Enforcement which continues to meet

regularly to progress the successful and secure implementation of the Register

Legislative developments

Legislation

Following consultation with industry, in February 2017 the States voted in favour of

a joint Policy Letter from the Policy & Resources Committee and the Committee for

Economic Development for the establishment of a Register of Beneficial

Ownership

In March 2017 The Beneficial Ownership of Legal Persons (Guernsey)

Law, 2017 was lodged for future debate

What are we doing?

Definition of Beneficial ownership

Following publication of the legislation, a consultation took place on the

regulations to define Beneficial Ownership

Where any right or interest comprises the property of an express trust, the trustee

or trustees of the trust are to be treated as having the benefit of that interest

Three Tier Test

• Ownership

• Control Through Other Means

• Position Held within the Legal Entity

Exemptions

25% Threshold

Resident Agent Exempt Companies

Who will have access?

Access is restricted to:

The Economic Crime Division of Law enforcement

Nominated individuals within the GFSC

Nominated individuals within the Registry

The Registrar can only disclose information for the purposes of:

Prevention, detection, investigation or prosecution of criminal conduct or non-

criminal penalties, intelligence services, Commission activities, income tax,

civil forfeiture, sanctions, gambling control, charity & not for profit obligations

Timeline

What we need you to do

Prepare

From 01 July any legal entity formed (N.b. LPs are not currently part of the

legislation) will need the following Beneficial Ownership to be included:

• Name

• Nationality

• Date of birth

• Principal residential address

• The date on which they became a BO (if post 01 July 2017)

• The basis on which the BO exists

What do we need you to do for your existing legal entities?

Prepare

From 01 July 2017 it will be possible for you to populate the BO Register with information on

existing legal entities

Identify the entities you consider will fall below the 25% threshold on a risk basis

We are considering the establishment of a Bulk Upload facility to be available in Autumn

2017 and would appreciate your input on whether this would be of interest to you

From January 2018 the BO Register will need to be fully populated and up-to-date to enable

the Annual Validation of the company to be filed

We are proposing that the AV period will be extended to the end of February 2018

Keeping the Register up-to-date

Maintenance

As soon as an entry appears on the BO Register there will be an obligation, within

14 days of the Resident Agent having been obliged to update the record of

beneficial owners, to file that update with the Registry

Sanctions

The sanctions applicable need to be persuasive so as to ensure compliance

The Registry will be responsible for Resident Agents that are not licensed and

the GFSC will be ensuring that Licensed Resident Agents are complying

You will need to provide evidence of the filings made

Enforcement

Penalties

Criminal penalties

Criminal Liabilities

Civil penalties

Disqualification Orders

Private Reprimands

Public Statements

Fees and Guidance

Fees

There will be no cost for the initial population of the Register

Subject to consultation, it is proposed that maintenance of the Register will incur a

filing fee, in a similar way as fees for updating directors are currently applied

Guidance

We will be issuing detailed guidance to presenters as the project develops

There is an obligation on you to ensure your Presenter Groups are up-to-date

and permissions are appropriate for your organisation

Visit www.guernseyregistry.com for guidance

http://www.guernseyregistry.com/

Possible Developments

Possible changes on BO registers being considered by the European

Commission

•Lower 25% threshold to 10% (in certain circumstances?)

•Replace access based on legitimate interest with free public access for profit making entities (not "family-

trusts")

•Registration of all trusts and public access to BO info of business-like trusts

-where the trustee is established

-Binding for EU Member States, including those who do not recognise trusts in their national law

•Interconnection of national registers via the EU Business Registers Interconnection System (BRIS)


What can we learn from others?

Lessons from UK Companies House

Forms have taken longer to process

They have had an increase in incorrect and incomplete filings

Customer contact has increased

Concern that it goes against general Government policy on deregulation

Filers become “tick box happy”

Source Presentation by UK Companies House to Corporate Registers Forum 2017

Todays Take-Away!

I’d sum up what you need to do in 3 sentences:

• Understand – the obligations on a Resident Agent

• Plan – for how you will assess what data needs to be provided and how you

intend to achieve this

• Test – your systems will make it easy for the GFSC / Registrar to check

compliance and for you to keep the Register up to date

If the Registry can offer any help whatsoever please do get in touch!

Other Registry Initiatives

Limited Partnership, LLP & Foundation AVs

APIs

IP Agents

Any Questions

Beneficial Ownership

Registry

IP

Thank you.

[email protected]

Brexit: what does it mean for Guernsey?Jonathan Le Tocq, External Affairs Minister, States of

Guernsey

Advocate Jon McLellan, Director of Legislative Drafting,

Law Officers of the Crown, Guernsey

Dr Andy Sloan, Director of Financial Stability, Guernsey

Financial Services Commission

WHAT #BREXIT MEANS FOR #GUERNSEY

JONATHAN LE TOCQ

THE ONLY THING THAT IS CONSTANT IS CHANGE.

Heraclitus



TREATY OF ROME, U.K. ACCESSION 1972, PROTOCOL 3

▸ “Third Country” status

▸Exception for trade in goods

▸Responsibility regarding rights of EU citizens

▸As a Third Country we have...

‣ negotiated access to financial markets

‣ voluntarily enacted sanctions where appropriate

‣ obtained equivalence status in regulatory matters


PRIORITY AREAS IDENTIFIED

▸Financial services

▸Customs

▸Fisheries and Agriculture

▸Free movement of people


THE FUTURE▸New trading opportunities

▸Enhanced international identity

▸Greater constitutional autonomy

▸Making the most of our acquired skills, innovation, legal

system, secure & appropriate regulatory framework

▸Building on reputation of stability as a "safe haven"

[LE] ROCHER D’HOSPITALITÉ ET DE LIBERTÉ...OÙ VIT LE PETIT PEUPLE DE LA MER... L’ÎLE DE GUERNESEY.Victor Hugo

Thank you.

Sample presentation

icsa guernsey conference 2017, 26 april

Government & Nonprofit