The Gibraltar Financial Services Commission’s tough enforcement regime is “harming Gibraltar” as a business-friendly jurisdiction at a critical juncture with Brexit looming, GSD MP Daniel Feetham warned yesterday.
Speaking during the budget debate, Mr Feetham expressed concern over the FSC’s enforcement regime and said it may discourage new investment and prompt existing operators to question their position here.
He flagged comments made by the CEO of the FSC, Samantha Barass, which, he said, were widely interpreted as a criticism of the regulatory regime under her predecessor.
In doing so, however, he drew a distinction between the work of the FSC and the Gibraltar Government.
He praised the efforts of Albert Isola, who holds ministerial responsibility for financial services, and flagged how this was the area being subjected to the most uncertainty and instability as a result of Brexit.
He said: “Gibraltar has always had a very well regulated financial service and insurance sector with an approachable regulator focused on risk and outcome.”
“It is one of the reasons why professionals have been able to market Gibraltar so successfully as a business friendly jurisdiction and, indeed, a jurisdiction of choice in a number of areas.”
“There is no doubt in my mind, however, that this new approach to enforcement is harming the jurisdiction at a critical juncture and there is considerable disquiet in the finance centre in general with what is perceived to be a testosterone-fuelled enforcement regime which may discourage new investment and may lead to existing operators questioning their place in the market.”
He added that, to many, this new enforcement regime has become a “runaway train”, adding that it is reflected in last year’s statistics when there were ten-fold increases in appeals to the courts from decisions of the FSC.
Mr Feetham’s speech covered a broad-range of issues including public finances and the government’s “lack of consultation” with the Opposition over Brexit.
He suggested the Government had made an “absolute mockery” of the annual budget debates, highlighting the “extreme economic reengineering” of the way public finances of Gibraltar are managed, operated and presented.
The GSD had therefore been absolutely right in the “firm stance” it has taken on the subject, Mr Feetham said.
He defended the unprecedented political move of last year which saw four GSD MPs vote against the Appropriation Bill and said it would be right for the party to do the same this year.
He said the “logical consequence” of what the Government was doing in respect of public finances is that the Opposition cannot vote in favour of the estimates of revenue and expenditure.
Mr Feetham insisted the estimates of revenue and expenditure and the numbers contained therein can no longer be trusted as a complete indication of Gibraltar’s economic health.
“These books [the estimates of revenue and expenditure dating back to 2013] represent and provide only half the true picture of what the government has spent during that time and what the government has borrowed,” he said.
“The other part, or £772 million worth, is hidden away in government-owned companies in respect of which the government refuses to answer questions.”