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Guernsey, China Sign MOU On Securities Regulation

by Jason Gorringe, Lowtax.net, London
25 November, 2013

Guernsey Financial Services Commission (GFSC) has signed a memorandum of understanding (MOU) with China Securities Regulatory Commission (CSRC), according to an announcement issued on November 18, 2013.

The agreement was signed by William Mason, Director General of the GFSC, and Xiao Gang, Chairman of the CSRC.

Mr Mason said: "Guernsey has high regulatory standards and this has been demonstrated to, and recognized by, the CSRC during the course of our discussions which have culminated in signing the MoU. The MoU provides the basis for a framework of cooperation and exchange of information between the two sets of authorities in relation to securities and futures business."

The MoU sets out a statement of intent to establish a framework for mutual assistance and to facilitate the exchange of information between the authorities to ensure compliance with their respective securities and futures laws or regulatory requirements in order to promote investor protection and the integrity of the investment products.

Mr Mason added: "Guernsey's financial services business is becoming ever more global and as such, it is vital that we ensure agreements such as these are in place to facilitate effective regulation and supervision going forward. Importantly, this MoU is also a prerequisite for Guernsey domiciled funds receiving a licence from the CSRC under the Qualified Foreign Institutional Investor (QFII) regime which provides a quota for external investment into Chinese capital markets."

The meeting with the CSRC took place on the first day of a week-long delegation by Guernsey officials to Beijing and Shanghai. As well as Mr Mason, the delegation also includes Peter Harwood, Guernsey's Chief Minister; Kevin Stewart Guernsey's Commerce and Employment Minister; and Fiona Le Poidevin, Chief Executive of Guernsey Finance, the promotional agency for the Island's finance industry.

Fiona Le Poidevin said: "The MoU is the first step in allowing Guernsey domiciled funds to participate in the QFII program and as such, adds to our appeal as a jurisdiction that can act as a gateway for investing into China. It will also mean we are much better placed than some other competitor centers to take advantage of the growing number of inward and outward investment opportunities being made available by the continued liberalization of the Chinese economy.

"More broadly, the MoU also shows a further widening of the relationship between Guernsey and China which has continued to build since we first established our office in Shanghai in 2007."

The GFSC signed a similar agreement with the China Banking Regulatory Commission (CBRC) in 2011.

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