The purpose of this page is to make sure that the application process is fully understood.
This section sets out:
- What is a Credit Institutions?
- What would this Licence allow you to do?
- GFSC Policy
- Capital Requirements
- What do you need to submit?
A 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. Further information can be found on the Gibraltar Deposit Guarantee Board website at www.gdgb.gi
What would this Licence allow you to do?
A banking licence permits an institution to carry out deposit taking and related services that are set out in Schedule 1 of the Act.
||Acceptance of deposits and other repayable funds from the public
||Payment services as defined in the Financial Services (EEA) (Payment Services) Regulations 2010
||Issuing and administering other means of payment (e.g. travellers’ cheques and bankers’ drafts)
||Guarantees and commitments
||Trading for own account or for account of customers in:
||money market instruments (cheques, bills CD’s etc.);
||financial futures and options;
||exchange and interest rate instruments;
||Participation in securities issues and the provision of services relating to such issues
||Advice to undertakings on capital structure, industrial strategy and related questions and advice and services relating to mergers and the purchase of undertakings
||Portfolio management and advice
||Safekeeping and administration of securities
||Credit references services
||Safe custody services
||Issuing electronic money
* Including inter alia; consumer credit, mortgage credit, with or without recourse factoring, and financing of commercial transactions (including forfiting).
The preferred approach of the GFSC is to accept applications for banking licences from institutions that are majority owned by established banking groups from reputable jurisdictions.
The GFSC 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 GFSC'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 GFSC 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 GFSC 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 organisation including the ability to inject additional capital, liquidity and management if required to do so by the GFSC
- 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
- The applicant will be significantly capitalised.
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
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.
What do you need to submit?
An application pack is required to be submitted with all the relevant documents.
An application will not be considered complete if there are any outstanding documents.
The application pack must consist of:
- Application Fee
- Application Form
- Business Plan
- Financial projections for the next 3 years
- Profit and loss account
- Balance sheet
- Returns (these need to be on a quarterly basis for the first year and then annually for the following 2 years). These should be submitted under the standardised common reporting framework established by the European Banking Authority (EBA), "COREP"
- Individual Questionnaires (for each individual holding a notifiable position)
- Body Corporate Questionnaires (for each entity holding a notifiable position)
- Trust Questionnaire (if applicable)
- Internal Capital Adequacy Assessment (ICAAP).
- Mapping assessment of how the application meets the relevant legislative threshold requirements (i.e. statutory/regulatory criteria for licensing under relevant Act/s)
Any other document the applicant considers the GFSC should take into consideration as part of the application.
The business plan should clearly and comprehensively set out:
- What services the firm intends to carry out and how it proposes to conduct the activity
- Board structure and terms of reference, including details of any sub-committees set up by the Board to assist it to carry out its duties
- The firm’s risk management function
- An assessment of the main risks facing the firm and how these are to be mitigated
- The resources that are to be made available and the systems that the applicant intends to employ
- Target market
- How clients will be sourced
- How records will be maintained
- How, and by whom, any significant decisions will be made
- Structure charts outlining both in-house and outsourced operations
- Details of outsourcing arrangements and how the firm will monitor and oversee these, including the controls implemented by the firm on these arrangements
- If the applicant forms part of a larger group, details should also be provided of the activities of the group and a description of its structure
- Details of the key internal processes and policies that will be in place, to include but not limited to:
- General systems and internal controls including details of management information systems to be employed
- Comprehensive explanations of reporting lines and segregation of duties
- The liquidity/solvency policies. This should include calculations of the liquidity coverage ratio (LCR) and details of how the bank will be meeting the phased LCR threshold amounts specified in CRD IV
- The credit and concentration risk policies
- An outline of how the bank will identify connected exposures
- Policy in respect of related party transactions
- The process to be implemented to manage bad and doubtful debt
- Remuneration policies
- Recovery plan
- Details of the compliance and risk management arrangements
- Internal audit processes
- Outline of complaint handling procedures
- The AML/CFT procedures to be put in place
- Confirmation of accounting systems to be employed
- Record keeping measures
- Business continuity arrangements
- Terms of reference for the board and each of the Committees to be established both at board level and senior management level
- Conflicts of interest policy.
The GFSC will be seeking evidence that the firm has considered the risk, compliance and operational issues associated with the proposed activities, as well as evidence that these have been documented and implemented.
Applicants should ensure that the business plan is coherent with the firm’s risk appetite and capacity.
Should you get an error when opening any of the forms, please check the FAQ tab for guidance on how to override this.
Documents referred to in the application form must be clearly referenced to help us process the application swiftly.
RGP Vetting Form
Please note that an 'Individual Questionnaire' or a 'Notifiable Document' MUST be accompanied by a Royal Gibraltar Police Vetting Application Form in accordance with Section 30C of the Proceeds of Crime Act 2015. The form must be submitted to the Gibraltar Financial Services Commission, who will liaise with the RGP in order to make the relevant enquiries.
For any applicant that is not a Gibraltarian, or has not lived in Gibraltar for the last 10 years, in addition to the RGP vetting form, he/she must also provide the GFSC with a report of their criminal record from the relevant authority in the jurisdiction/s in which they have been ordinarily resident for the last 10 years and/or from any other jurisdiction where the applicant has spent a considerable amount of years resident in the past. If the report is not in English, this must be accompanied by a translation from a certified Translator.
Notes for completion of the Royal Gibraltar Police Vetting Application Form:
1. The RGP Vetting Form must be completed by the applicant in full. Should any section be incomplete, this cannot be accepted.
Note that the section in the form that states ‘To be completed by agency or organisation requiring vet’ should be left blank as this section is to be completed by the GFSC only.
2. All RGP Vetting Forms MUST be submitted together with the applicable Individual Questionnaire or Notifiable Document to which it relates.
Should exceptional circumstances apply, please contact firstname.lastname@example.org
3. The RGP and Individual Questionnaire or Notifiable Document cannot be accepted without any of the following:
a) Payment of the £10 applicable fee by bank transfer only; and
In order to obtain the relevant bank details, please liaise with the member of staff at the GFSC who is processing the application and they will provide you with the required information. Should you be unsure of the contact details, then please refer your query to email@example.com
b) APPLICATION Reference number.
This reference number MUST be quoted in the payment reference for any bank transfer. Should you have numerous payments to settle due to a large number of applications, or find that you are unable to include all relevant references within the payment details, please ensure that you communicate this to the member of staff at the GFSC who is processing your application. We will require an e-mail confirming the applicable reference numbers that correlate to each individual, notifiable applicant or RGP Vetting Form.
For any further queries, please contact firstname.lastname@example.org and a member of staff will be happy to assist.
||Body Corporate Questionnaire
Body Corporate Questionnaire Warranty
A warranty signature page is required to be submitted with all applications. Please use the reference number quoted on the form.
Individual Questionnaire Directors Declaration
Directors declaration form is required to be signed and submitted with the individual questionnaires. Please use the reference number quoted on the form.
Individual Questionnaire Warranty
A warranty signature page is required to be submitted with all applications. Please use the reference number quoted on the form.
Where a trust is proposed as part of the shareholding structure of an applicant, the GFSC will need sight of a comprehensive explanation setting out the rationale for the use of such a vehicle within the structure.
Furthermore, the following is required to be submitted together with the Questionnaire
- Copy of the trust deed
- A written undertaking from the respective trustees to the effect that:
- the provisions of the trust(s) in respect of beneficiaries, trustee(s) and terms of settlement are as contained in the relevant deed(s) dated [xxx],
- the resignation of any trustee and, where appropriate, protector will be notified to the Commission forthwith,
- no other trustee(s) or any additional or different protector(s) will be appointed, without the prior approval in writing of the Commission,
- any proposed changes to the beneficiaries must be notified in writing to the Commission,
- any proposed distribution or transfer for value or otherwise of any of the trust assets related to the applicant firm must receive the prior approval in writing of the Commission.
- Confirmation from the trustee(s) that they understand that failure to adhere to their undertaking may result in regulatory action against the applicant/regulated firm.
In addition to the Trust Questionnaire and the above listed information, the Applicant is also required to submit Individual Questionnaires for the settlor(s) and any named beneficiaries. This will not apply in cases where the beneficiary is a minor. In these cases, details of the individual will suffice i.e. name, DOB, address, nationality & passport number. When the trust is for example a discretionary family trust where not all beneficiaries are named (i.e. refers to spouse and children/issue of Mr X but does not actually name these individuals) a copy of the ‘letter of wishes’ of the Settlor, if any, will also be required.
In principle, the GFSC does not favour the use of nominee shareholdings for the purposes of holding shares, directly or indirectly, in a regulated firm. The Commission will therefore require that the applicant submit a paper setting out the rationale for the use of these structures in each instance where this is being proposed. This should include comprehensive details as to why it is necessary to hold the shares in this way.
** All forms are accepted electronically so long as they are submitted from a valid email address pertaining to the firm **
The application fee must accompany your application. Please note, if you are applying for more than one licence, aggregate fees will apply.
||Nature of Application
|Bank (Including non-EEA incoming bank branch)
||Application to be licensed
||Application to extend permitted activities
||Application to be licensed as a CIS depositary of EIF assets
||Application to be licensed as a CIS depositary of UCITS assets
||Application to be licensed as a CIS depositary of AIF assets
The annual fee is not payable until your application is approved. For details of these please refer to the current Fee Regulations.
Under the GFSC’s annual fee methodology you pay a minimum base fee which is dependent on the set fee block assigned to your regulated sector. In addition to the base fee, you are also required to pay an additional amount that will be calculated based upon a range of factors including activity and income. To calculate the additional part of your annual fee the GFSC will need to review audited financial data and/or supervisory returns. At licensing stage, you will not yet have the requisite audited financial data or supervisory returns available for the GFSC to calculate the additional part of your annual fee. On this basis, the GFSC will only require you to pay the base fee at this stage and, towards the end of the GFSC’s financial year end (31 March), you will then be invoiced for the remainder of the annual fee which will be calculated based upon the financial data and/or supervisory returns provided by you up until that date.
Details on the payment methods can be requested from the Accounts team.
The current service level standards for Firms are:
- To provide initial feedback to an application within 9 weeks of a complete application being received.
- Once all of the information has been received from an applicant and the application is therefore considered to be complete, we aim to provide an in principle decision within 9 weeks.
The current service level standards for Individual authorisations are:
- To provide initial feedback to an application within 1 week of a complete application being received.
- Once all of the information has been received from an applicant and the application is therefore considered to be complete, we aim to provide an in principle decision within 2 weeks.
Please be advised that the above service level standards refer to the period of time in which the GFSC holds applications for consideration. Where we require further information or documents from an applicant the service level standards will be suspended until we receive the requested information. The period of time an application is pending because of factors outside the control of the GFSC will not be accounted for under the service level standards.
Please note that should we be unlikely to meet our SLS’s, we will advise you as soon as possible.