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IFCS group publishes new trust regulation standards

Monday, 20 October, 2014

The Group of International Finance Centre Supervisors (GIFCS) has issued a new standard on the regulation of trust and company service providers (TCSP), emphasising the need to identify the ultimate beneficial owners and beneficiaries of companies and trusts.

GIFCS, established in 1980, is a group of financial services supervisors with a core interest of promoting the adoption of international regulatory standards especially in the banking, fiduciary and AML/CFT arena. The new standard for TCSPs, formally adopted at GIFCS' plenary meeting last month, is the first of its type. It introduces a new minimum benchmark for businesses administering international trusts and companies to follow, complementing the international supervisory standards of the Basel Committee, IOSCO and IAIS.

The sections dealing with financial crime are underpinned by current Financial Action Task Force recommendations to prevent money laundering and the financing of terrorism. In particular, they set out the need for intermediaries to know who are the ultimate beneficial owners behind the companies, and the beneficiaries and key functionaries behind the trusts they administer – a matter that GIFCS has been promoting since 2002.

'An effective regulatory regime means that standards can be enforced and sanctions applied', noted Philip Nicol-Gent, who chaired the GIFCS working group that drafted the new standard. 'Only in this way can all jurisdictions demonstrate their determination to try to make sure that trusts and companies are not used for abusive purposes.'

STEP welcomed the new standard. 'It is vital that professionals in this sector meet the very highest standards in order to underpin confidence in the IFCs', commented Deputy Chief Executive George Hodgson. 'These benchmarks will help underpin these high standards and will play an important role in ensuring that IFCs are well placed to move forward in what is a rapidly changing market environment.'

Sources