Key changes to the GFSC enforcement explanatory notes: September 2025 update

Since the enforcement of the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020 (the Enforcement Powers Law) came into effect on 1 November 2021, the Guernsey Financial Services Commission (GFSC) has revised and released three key explanatory notes regarding its enforcement process.  

In light of recent feedback and comments by the Guernsey Royal Court, the GFSC has released further updates to its enforcement explanatory notes, which were previously last updated in September 2022.  

The purpose of the GFSC's update 

The recently published explanatory notes clarify the GFSC's rationalised approach to the enforcement process.  

The clear theme in the recent update is the GFSC's overarching philosophy and methodology in applying enforcement measures, which now emphasises proportionality, consistency, and regulatory effectiveness. These revisions reflect a more structured, transparent and balanced approach to regulatory action.  

What is also clear is that the GFSC's 2025 update promotes consistency and fairness in enforcement, which should enhance and encourage public confidence. Importantly, the update aligns Guernsey's approach with international standards, and the new guidance provides clarity to both regulated entities and individuals.  

Key changes to the GFSC enforcement explanatory notes 

1. Updated guidance on the GFSC's investigation and decision-making process

The GFSC's updated explanatory notes include a detailed focus on how investigations are conducted and how decisions are made. The new guidance signifies an effort by the GFSC to enhance transparency and procedural clarity on issues across the board, including the GFSC's enforcement powers, processes and sanctions. The revised notes include comprehensive sections on each enforcement measure, from licence suspension to winding-up orders.  

There are several notable changes to the framework, including substantial changes regarding the following:  

Disclosure of documents

The updated framework introduces clearer expectations around the disclosure of documents during the enforcement process. The GFSC now outlines which materials will be shared with the subject of enforcement, and at which stage – the aim is to improve procedural fairness and transparency. The process now includes clear timelines for disclosure, enforcement reports, and evidence relied upon. 

Selection and appointment of decision-maker 

The process for appointing a Senior Decision Maker (SDM) or Case Decision Committee (CDC) has been formalised. The GFSC now provides more detail on how decision-makers are selected, their independence and their role in ensuring impartiality. This change responds to concerns raise about fairness and reinforces the integrity of the decision-making process.  

The "minded to" notice and representations

The “minded to” notice remains a pivotal stage in the enforcement process. The revised notes clarify the structure and content of this notice, including the proposed sanctions and underlying rationale. Subjects are given a defined opportunity to make representations, with guidance on format, timing and how those representations will be considered. 

Decisions

Final decisions are now subject to a more structured process, with clearer documentation of reasoning and outcomes. The GFSC has committed to issuing decisions that are well-reasoned and transparent, including the basis for any sanctions imposed. This is intended to enhance accountability and consistency.  

Imposition of sanctions

The range of sanctions has been expanded and clarified. The GFSC now provides detailed guidance on when and how each sanction may be applied, including financial penalties, disqualification orders and enforceable undertakings. A banding system for penalties has been introduced, with specified behavioural indicators and aggravating or mitigating factors (read further details on this below).  

Appeals and time limits

The updated notes reinforce the statutory right to appeal and clarify the time limits for doing so. Subjects now receive clearer guidance on how to initiate an appeal, what grounds may be considered, and the procedural steps involved. This aims to ensure that appeal rights are accessible and well-understood. 

2. Clarified enforcement process 

The stages of enforcement have been more clearly defined. In summary, these now follow the process of: 

1. Executive review – this is conducted by the relevant Supervisory Division before any referral to the Enforcement Division (ED) 

2. Investigation and draft report – if accepted, the ED engages its statutory powers to initiate a formal investigation, this leads to a draft enforcement report  

3. Disclosure and representations – in the spirit of transparency, the subject receives the ED's relevant case materials (including the draft report and supporting evidence). The subject is then given a defined period to respond to the “minded to” notice  

4. Case Review Panel (CRP) – at this stage the CRP reviews the case, including the ED's recommendations and any representations the Subject has put up 

5. Appointment of decision-maker (SDM or CDC) – appointed to ensure impartiality, the SDM or CDC reviews all materials and makes a final determination 

6. Final decision (and possible sanctions) –  a reasoned decision is issued detailing findings, sanctions (if any), and rationale. The decision may include financial penalties, disqualification orders or other enforcement measures 

It is important to note that here onward, all matters will be dealt with under this updated 2025 process.  

3. Expanded enforcement measures 

Notably, the GFSC's recent updates include new or expanded guidance on:

• Licensing unregulated entities 

• Disqualification orders (directors, auditors, actuaries) 

• Enforceable undertakings and injunctions 

• Restitution orders and administration appointments 

• Public statements, private reprimands, financial penalties

 4. Other notable and updated approaches  

i. Publication and transparency

The updates introduce a stronger presumption in favour of publishing enforcement outcomes. The criteria for timing and scope has also been clarified. Going forward the GFSC will continue to publish lists of disqualified individuals and entities. 

ii. Financial penalties framework 

A notable change is regarding the penalties framework, which has been updated to introduce a "banding system" for discretionary penalties. In fleshing out the penalties framework, the GFSC will consider behavioural factors including: (i) seriousness, (ii) cooperation, (iii) public risk and (iv) prior history. 

iii. Appeals and procedural safeguards 

As mentioned above, there is now clearer guidance on rights of appeal and urgent cases. Subjects have a statutory right to appeal to the Royal Court within 28 days of a decision. Helpfully, the recent updates also introduce procedural safeguards specifically geared at achieving enhanced fairness, which the GFSC propose is achieved via the inclusion of audio-recorded meetings as well as the enabling of structured representation. 

Implications for firms and practitioners 

The GFSC’s recent publications undoubtedly provide greater clarity, in that firms can better anticipate regulatory steps and prepare accordingly. Another notable outcome is regarding reputational risk, as the GFSC's increased transparency may heighten public exposure. Finally, with these September 2025 updates the industry is now better placed in terms of compliance strategy. Firms and practitioners can adjust their internal processes informed by the GFSC's now expanded enforcement tools, which in turn calls for proactive governance reviews. 

Staying ahead of the curve - how Ogier can help

Internal circulation and client advisory

Sharing the GFSC's updated guidance with compliance and legal teams is a natural first step. This will equip all stakeholders to stay abreast with the GFSC's reorganised expectations. Firms and practitioners may consider issuing a summary to staff and clients alike, outlining the key changes arising from the GFSC's updates. This proactive measure helps to manage and maintain relations and expectations.  
 
Ogier offers a variety of support measures, including (amongst other services):

• assistance with providing internal briefings to the Board, legal and compliance teams, as well as key clients, NEDS and corporate directors, and

• tailored legal advice at the outset of any possible interaction with the GFSC to help navigate the updated process. 

Ongoing monitoring

Look out for further GFSC commentary and case examples. Ogier's website is always a safe landing page to keep up to date with any and all recent and significant industry changes.  

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice