GUERNSEY Law and Practice Contributed by: Matthew Brehaut and Tom Carey, Carey Olsen
Carey Olsen Forum St Paul’s London EC2V 8AS UK
Tel: +44 (0) 20 7614 5620 Fax: +44 (0) 20 7628 0652 Email: matt.brehaut@careyolsen.com Web: www.careyolsen.com
1. Fintech Market 1.1 Evolution of the Fintech Market Digital Assets On 1 July 2023, the Lending, Credit and Finance (Bailiwick of Guernsey) Law 2022 (the “LCF Law” ) came into force. This introduced Guern - sey’s first “virtual asset service provider” (VASP) regime. Subject to certain limited exemptions, the LCF Law requires VASPs to be licensed with the Guernsey Financial Services Commission (GFSC). VASPs are also specified as “finan - cial services business” within the scope of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999 (the “Guernsey AML Law” ) and therefore subject to Guernsey’s AML legislation. Financial Platforms and Intermediation The LCF Law also imposes a licensing require - ment for the operation of a peer-to-peer plat - form, the operation of a crowdfunding platform, and the provision of alternative non-bank credit or finance intermediation.
AI One closed-ended fund based on machine learning (AI) investment strategies has been launched. Discussions are ongoing and fur - ther such investment funds are expected to be launched in the future. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models So far only one VASP licence has been issued in Guernsey. Guernsey has however seen the launch of a Bitcoin exchange-traded fund (ETF). Guernsey is also ideally positioned to facilitate the transition to “tokenisation” of traditional financial assets. Guernsey’s Electronic Transac - tions (Guernsey) Law 2000 ensures the validity of electronic transactions, data and signatures, and provides clarification on the legal validity of electronic agents and “smart contracts” increas - ingly utilised in permissioned tokens. Guernsey also regulates digital representations of fiat currencies and general securities and derivatives as traditional assets, as opposed to virtual assets ‒ meaning that the Protection of
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