Guernsey Finance Chief Executive Dominic Wheatley told the Guernsey Funds Forum event in London that a new report on a model for financial services regulation post-Brexit is good news for the island.

In advance of our Funds Forum event I read the IEA discussion paper – Improving Global Financial Services Regulation. This paper, written by Shanker Singham and Catherine McBride, provides a detailed and comprehensive analysis of how the UK can lead the world in developing a more efficient international regulatory framework post-Brexit.

This, they argue, must balance the traditional aims of financial stability and investor protection with the need to encourage and facilitate the competition that will not restrict growth and innovation. Their view is that current global regimes are too focused on market stability rather than access and competition. The aim should be to produce the most competitive markets possible, consistent with reasonable prudential goals.

Furthermore this needs to be accomplished while progressing towards global regulatory competition. The UK can serve this purpose by challenging global rules with anti-competitive effects and promoting pro-competitive standards.

The framework for this should be enhanced domestic regulation, good bilateral arrangements (including with the EU), multi-domicile cooperation based on the F4 Alliance with Switzerland, Hong Kong and Singapore, and multilaterally through the global bodies, starting with the WTO.

The IEA authors advocate international cooperation based on principles and outcomes rather than proscriptive line-by-line equivalence. This envisages specialisation and proportionality in specific jurisdictions that will enhance competition, and provide a variety of more appropriate regulatory environments that meet specific needs without compromising on overall regulatory standards.

Mutual recognition rather than unilateral equivalence is the name of this game.

Critically, the report recognises that Guernsey and the other Crown Dependencies are key assets of the City of London. There are a number of roles in this brave new world that reflect the expertise and quality that we offer.

Firstly, Guernsey can provide a specialist domicile for new retail products designed to bring new options to UK investors. This recognises our unique ability as a small and nimble environment to adapt regulatory standards to reflect the risks and meet the needs of new services and structures.

Secondly, we enhance the UK’s global network through our sophistication and experience in operating as a conduit for capital flows between different tax and regulatory environments. We have bilateral arrangements in place that give access to 80% of the world’s wealth, as evidenced by a KPMG report on international capital flows.

Thirdly, we are clear leaders in the trading of funds into the EU using our tried and tested National Private Placement Regime, and having already successfully sought EU equivalence under AIFMD. While this process may have been delayed or even terminated by Brexit, it is a clear endorsement of our funds regime and a validation of our regulatory standards generally. We certainly hope and expect that this will encourage the UK towards an open trading relationship once the EU border no longer lies between Guernsey and the Isle of Wight.

London is so much more than a regional centre, and the Channel Islands have a great future as part of the City of London, the world’s leading finance centre.