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Editorial Comment
Overpowering the elephant
It was the first time there has been an “elephant in the room”, but that is what financial services minister Albert Isola considered the effect of Britain’s possible exit from the European Union - BREXIT - at the 16th annual Gibraltar Day in London. He was, if nothing else, being
pragmatic. The Gibraltar government is studying closely how the economy would
survive a BREXIT situation. Chief Minister Fabian Picardo has already determined: “For Gibraltar, the disastrous consequences of economic exclusion from our main trading bloc — in our case mostly in financial services — would be compounded by giving Spain a brand new opportunity to lock us out at the border,” he noted on the Politico Europe website. The common standards set by the European Commission, OECD and IMF, meant Gibraltar’s financial services operators could compete and prosper within the single market.
Yet at the same time the financial services sector was being wooed by ministers to ensure Gibraltar was on the list of favourable business jurisdictions when advising their clients, quite apart from perhaps, setting up operations themselves. Picardo hopes the newly selected developer of a large prime site, London & Regional Properties, would also open a local office in addition to ones it has in London, Ireland and Panama to administer its £9bn+ portfolio.
Picardo believes – and he’s almost certainly right - that Gibraltar’s 22,000 voting population will “vote in favour of remaining in Europe” in the 2016-17 referendum. The UK’s relationship with the EU needs to be “fixed, not thrown away”, he insists.
Providing a fast-track, inexpensive access to Europe for overseas investors utilising EU passporting remains a mainstay of Finance Centre marketing, but some feel other plus points should be more prominent. The adaptable and approachable financial services regulator, providing fast, simple and relatively inexpensive licensing, is an obvious target.
Indeed both Picardo and Isola were at pains to emphasise the positive role of the Financial Services Commission (FSC) when addressing more than 1,500 people at the City events in London’s Guildhall. Yet that should not be taken to mean the FSC is a soft touch: the moves to up the maximum potential FSC fines from £10,000 to a more realistically £200m deterrent are an indication that the regulator means business in protecting both consumers and investors. Reference to “serious issues” being exposed amongst a minority of Experienced Investor Fund Directors is worrying, because as the FSC notes, they stand to harm Gibraltar’s reputation.
The government has prepared legislation to establish a Financial Ombudsman to assist individuals when any wrongdoing is exposed, but this is unlikely to come into effect until well into next year whichever political party wins the next general election, expected in December.
The government’s Gibraltar Day pitch to the City, supported by private sector firms, was unashamedly about ‘togetherness’. Picardo forcibly made the point: “Rock & City together for mutual benefit and profit.”
The London Gibraltar Day event is “crucial”, and has spawned other ‘Gibraltar Days’ in Switzerland, Singapore and Hong Kong, to open up business opportunities.
Ray Spencer
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4 Gibraltar International www.gibraltarinternational.com
Contents
News p6
Developments buck BREXIT uncertainty to boost economy
Regulation p8
New ESMA Guidance Sets Out AIFMD Passporting Criteria for Non-EU Fund Manager
Tax p10
Gibraltar, an attractive alternative
Profile p12
Beauty products to trees - Gregory Butcher interview
Regulation p16
Better consumer protection needs huge lift to ‘paltry’ fine limit
Nov/Dec/Jan 2015/16
Volume 21/ Number 4
Telecomms p18
Tuning into TV leads to broadband wars
Banking p22
The Bank Cultural Revolution
Tax p24
UK Residential Property Tax Changes
Property p26
Gibraltar, “on a roll”
Funds p28
Slow down prompts study of new business fronts
Business round up p30