GUERNSEY Law and Practice Contributed by: Matthew Brehaut and Tom Carey, Carey Olsen
6.4 Listing Standards There are generally no Guernsey-specific requirements regarding the investment exchang - es/associated listing standards to be used by Guernsey-based exchanges and trading plat - forms. However, the GFSC would generally expect any such exchanges to be based in repu - table FATF jurisdictions. 6.5 Order Handling Rules See 3.3 Issues Relating to Best Execution of Customer Trades . The CoB Rules cover mat - ters such as corporate governance, compli - ance, accounting, fitness and propriety, client relations, record-keeping, client categorisation, complaints, client assets, and conflicts of inter - est. In terms of order handling, the CoB rules cover matters such as client order priority, timely execution, best execution, timely and fair alloca - tion, churning and switching, and staff dealing. 6.6 Rise of Peer-to-Peer Trading Platforms Historically, peer-to-peer trading platforms in Guernsey have been highly competitive in com - parison with traditional trading platforms. Also, they have typically charged lower fees. In terms of regulation, the POI Law regulates operating an investment exchange. The LCF Law now regulates peer-to-peer platforms relat - ing to lending activity and also regulates crowd - funding platforms (through which persons seek to raise money or other finance through the issue of general securities and derivatives). 6.7 Rules of Payment for Order Flow There are no specific Guernsey requirements beyond those set out in the CoB Rules.
POI Law The POI Law regulates “controlled investment business” . As explained in 2.2 Regulatory Regime , controlled investment business means certain “restricted activities” (ie, promotion, sub - scription, registration, dealing, management, administration, advising, custody, and operat - ing an investment exchange) in respect of “con- trolled investments” (being collective investment schemes and general securities and derivatives). The POI Law can therefore be seen as regulating certain restricted activities in respect of “tradi- tional” asset classes. LCF Law The LCF Law regulates “financial firm business” , which covers certain assets (such as currencies, bullion, means of payment, and commodities) not otherwise caught by the POI Law. This is principally to ensure that they are subject to Guernsey’s AML legislation. The LCF Law also regulates certain activities in relation to “virtual assets” , including: • exchange between virtual assets and fiat cur - rencies; • exchange between one or more forms of virtual asset; • transfer of virtual assets; • safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and • participation in and provision of financial ser - vices relating to an issuer’s offer and/or sale of a virtual asset. 6.3 Impact of the Emergence of Cryptocurrency Exchanges See 2.2 Regulatory Regime and 6.2 Regulation of Different Asset Classes .
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