Gibraltar Credit Institutions License

A Gibraltar credit institution (or as more commonly known, a bank) receives deposits or other repayable funds from the public and grants credits.

The regulation of Banking services falls within the scope of the Financial Services (Banking) Act 1992 (“the Act”), and any subsidiary legislation of the Act.

Credit Institutions licensed in Gibraltar are also required to be members of the Deposit Guarantee Scheme.

A banking license permits an institution to carry out deposit taking and related services that are set out in Schedule 1 of the Act.

Gibraltar Credit Institutions License Key Features;

Class	Description
1	Acceptance of deposits and other repayable funds from the public
2	Lending*
3	Financial leasing
4	Payment services as defined in the Financial Services (EEA) (Payment Services) Regulations 2010
5	Issuing and administering other means of payment (e.g. travellers’ cheques and bankers’ drafts)
6	Guarantees and commitments
7	Trading for own account or for account of customers in:
(a)	Money market instruments (cheques, bills CD’s etc.);
(b)	foreign exchange;
(c)	financial futures and options;
(d)	exchange and interest rate instruments;
(e)	transferable securities.
8	Participation in securities issues and the provision of services relating to such issues
9	Advice to undertakings on capital structure, industrial strategy and related questions and advice and services relating to mergers and the purchase of undertakings
10	Money broking
11	Portfolio management and advice
12	Safekeeping and administration of securities
13	Credit references services
14	Safe custody services
15	Issuing electronic money

FSC Policy

The preferred approach of the FSC is to accept applications for banking licenses from institutions that are majority owned by established banking groups from reputable jurisdictions.

The FSC considers that the support provided by existing banking operations in terms of management structures, controls, systems, liquidity, financial support and expertise to their subsidiaries is a vital component of the FSC’s supervisory approach when considering new applications. The ability of the regulator to rely on such support mechanisms permits local operations to be established in the knowledge that should external support be required these are readily available.

The FSC may in certain instances and in particular where the applicant is part of a major established financial services group based in a reputable jurisdiction, consider applications for banking operations which do not have a banking parentage.

In order for the FSC to consider such applications the following additional pre-conditions, to those required of banking applicants, must be met:

The applicant will be directed by a suitably qualified Board including the appointment of appropriate non-executive directors

The four-eyes of the applicant will have relevant banking expertise in the areas that the applicant seeks to conduct its operations

The controllers of the applicant have the necessary financial and other resources to support the organization including the ability to inject additional capital, liquidity and management if required to do so by the FSC

The systems of control adopted by the applicant will not only be appropriate for the banking activities proposed but will also have resilience and redundancy built in to run as a stand-alone operation

Except for treasury operations of significant publicly quoted institutions, the operations and business model of the applicant will be at arm’s length, and in most cases ring-fenced, from the operations and businesses of its controllers

Capital Requirements

The capital requirements for a credit institution are set out in the Financial Services (Capital Requirements Directive IV) Regulations (“CRD IV”), which includes provisions relating to:

• The definition of regulatory capital
• Capital requirements
• Disclosures made by firms under Pillar 3
• Transitional provisions
• Quality of capital
• Quantity of capital
• Counterpart credit risk (CCR)
• Credit valuation adjustment (CVA) risk
• Leverage
• Liquidity

A credit institution’s minimum initial and ongoing capital requirement is the higher of:

• €5,000,000; or
• The capital calculations as per CRD IV.

Why Valsen

1. We will advise you on the optimal legal structure for your requirements, size, expectations and circumstances. We have extensive knowledge of a wide range of legal structures in all major jurisdictions.
2. Valsen will assist to complete every form for each process in the best way we know how (Based on our many years’ experience with various regulators and service providers across the world)
3. Valsen will assist in preparation of winning business plans based on our superior understanding of regulator expectations and requirements
4. We are very hands on in the post filing period checking with re regulator and service providers and updating you regularly. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
5. We can provide you with fit and proper directors in case you need. We have a wide network of qualified and experienced lawyers, chartered accountants, chartered financial analysts, wealth managers, FX experts, Investment advisors etc. of international pedigree.
6. We have a full in-house compliance support for all compliance requirements with the regulator and service providers
7. Through our extensive network, we provide sign up services with major service providers including but not limited to; Liquidity providers, technology providers, custodians, prime brokers, legal advisors, auditors, payment gateway providers among others.