Revised DLT Guidance Notes issued by the GFSC

GIBRALTAR REGULATOR REFRESHES JURISDICTION’S DISTRIBUTED LEDGER TECHNOLOGY REGULATION

Gibraltar – September 17th, 2020 –

The Gibraltar Financial Services Commission (GFSC) has today announced a number of important updates to the jurisdiction’s bespoke Distributed Ledger Technology Providers (DLT) regulatory framework Guidance Notes.Changes to the Guidance Notes have been made to capture a natural evolution of the defined regulatory principles. As was always envisioned, in a fast moving industry the idea behind the Guidance notes accompanying the legislation was to be able to facilitate and capture this and maintain a framework that was directly relevant and up to date. As well as offering further clarity on key areas, the amended guidance notes also update the risk framework to distinguish between virtual assets and virtual asset denominated instruments that are arguably higher risk, and require additional factors or on-boarding tests to be considered. Continuation of work on the detailed process of fully adapting the framework to include the latest Financial Action Task Force (FATF) recommendations relating to virtual asset service providers (VASP) activities is also marked by the release of the updated guidance notes. The Government is also continuing with separate work, in engaging an international professional working group on the considerations and factors around the adoption of the Travel Rule requirements introduced for VASPs under the FATF recommendationsGibraltar’s Minister for Digital and Financial Services, the Hon Albert Isola MP, said, “Today marks another milestone moment for Gibraltar’s thriving DLT/VASP ecosystem, as we refine the regulatory framework that guides companies through the licensing process and beyond. Our jurisdiction’s agility has been a hallmark of our success to date, with a progressive open dialogue between regulators and industry figures helping to craft a framework that satisfies natural regulatory prudence while allowing for a sensible amount of regulatory latitude to help projects innovate properly.”The consultation process began last November and included the Gibraltar Financial Services Commission (GFSC), Gibraltar Association for New Technologies (GANT), and DLT Provider licensees who have been fully consulted on the amendments to the framework.Introduced in January 2018, Gibraltar’s DLT legislation is the world’s first purpose-built regulatory framework for businesses using blockchain or DLT and sets out a rigorous application process in line with Gibraltar’s vision for the highest standards in regulatory adherence. DLT permission holders are subject to the same high supervisory standards as banks and other financial services firms. Currently there are 13 licenced firms operating under the DLT framework including large international groups such as eToro, Huobi, Xapo, LMAX, Bitso and Gnosis (the full current list can be seen here https://www.fsc.gi/regulated-entities/dlt-providers-38). In addition, there are a number of active applications in process. Gibraltar has always aimed to open the door to those firms that reach or exceed the high entry threshold we have established and therefore grow a top-level industry and ecosystem. For companies seeking to obtain a DLT licence, early engagement with the GFSC DLT & Markets team is essential to establish if the company’s proposed activity fits within the principles of the framework. “Prospective licensees must demonstrate a clear appreciation of the nine core principles underpinning the regulatory framework, covering areas such as corporate governance, capital adequacy, risk management, customer care, and in due course, market manipulation. Other essential prerequisites include thorough internal risk management strategies, robust corporate governance structures, and well-defined protocols, with secure checks in place to ensure the protection of clients’ assets is prioritised. With a finely tuned DLT regulatory framework informed by industry and market insights, Gibraltar is even more equipped to steadily broaden our DLT community and continue Gibraltar’s strong arc of economic growth post-pandemic and BREXIT. We look forward to welcoming more quality projects into our blockchain ecosystem in the months and years ahead,” concluded Minister Isola.For further information on Gibraltar’s DLT regulatory framework and the revised guidance notes, please visit http://www.gfsc.gi/dlt.

1st EGM Held

The Association’s 1st EGM was held on Monday the 11th Feb 2019.  The constitution was formally adopted by the Memberships and the Executive Committee members ratified into their elected posts.

The following workstreams were highlighted as the first items that will be tackled by the committee and associated sub-committee.  The membership was encouraged to join the sub-committees.

  • Technical :
    • Auditing and accounting standards
    • Tax
    • Forthcoming ICO legislation
    • GDPR
    • FSC Interfacing and Annual Fees
  • Education :
    • Membership and Professional Development
    • Broader engagement with educators to deliver New Technologies in Gibraltar
  • Social Media :
    • Membership Survey
    • Establishment of Facebook, LinkedIn, Twitter and Web Pages

Members were informed that the bank account will shortly be established and annual fee invoices will be issued shortly thereafter.

Members were also informed that the Exec would be meeting with the FSC later in the week and were encourage to raise any issues through the on-line survey so that these could form part of the discussions.

An application to form part of the Gibraltar Finance Centre Council had also been submitted and would be considered formally once the Association was formally constituted.

 

EGM Called for 11 Feb @ 10:00

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of GANT will be held at Gibraltar Finance, Suite 761, 6th Floor, Europort, Gibraltar, GX11 1AA on 11th February 2019 at 10:00am for the purpose of considering and, if thought fit, passing the following:

AGENDA

THAT the members ratify the adoption of the attached constitution;

THAT the members ratify the appointment of the individuals that polled the most votes at the candidate vote held in December 2018 to the Committee of GANT and that they assume the following roles:

Chairman                                           David Parody

Vice Chairman                                  Joey Garcia

Secretary                                           Javi Triay

Treasurer                                          Vikram Khatwani

Training                                             Ian Torrilla

Technical (Accounting & Tax Issues)       Desiree McHard

Technical (Legal & regulatory issues)      Anthony Provasoli

Marketing                                           Nick Cowan

Administrator                                     Thomas Johnson

THAT the membership considers and approves thework streams and initiatives for 2019.

THAT any other business be considered.

Dated 9th January 2019

BY ORDER OF THE Chairman

  David Parody Chairman    
NOTE: Any Member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and (on a poll), vote on his behalf; a proxy need not be a Member. The instrument appointing a proxy should be delivered to the Chairman not less than 24 hours before the time fixed for holding the Meeting or adjourned Meeting.

1st Meeting of the GANT Executive Committee

committeegantThe 1st meeting of GANT’s executive committee took place today.

The following positions were allocated;

  • Chairperson : David Parody
  • Vice Chairperson : Joey Garcia
  • Secretary : Javi Triay
  • Treasurer : Vickram Khatwani (not in photo)
  • Technical Committees : Desiree McHard and Anthony Provasoli
  • Marketing : Nick Cowan
  • Training : Ian Torrilla
  • Administrator : Thomas Johnson

The Executive also considered the applications for membership and a total of 7 Observers, 5 FSC Authorised Firms, 4 Firms using DLT and a further 17 Advisory firms were accepted as members of the Association.

Consideration was given to extending honorary membership to other trade associations and bodies who the executive considered would add value to the workings of the Association.

Annual fees were set by the Executive for the 1st year of operation at the following rates;

  • Corporates  @ £500 pa
  • Individuals @ £100 pa
  • Observers @ £200 pa
  • Representatives of members @ £100 per individual other than the 1st one.

The Chairperson will be writing to each applicant to confirm the successful determination of their application.

Various workstreams were identified for the Executive and sub-committees will soon be established to deal with these.  The Executive will also be seeking a meeting with the FSC by way of a formal introduction to its workstreams and members.

An EGM will be called for the 11th February 2019 where the membership will be asked to ratify the Constitution of the Association, Members of the Executive and to identify additional workstreams.