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European Financial Planning Group provides financial advice to thousands of clients who live in Gibraltar and Spain or who are considering moving to the area. At EFPG, we have adopted a tight regulatory and compliance stance equal to that practised by our UKbased partner company Yorkshire Investment Group; the largest privately owned firm of Independent Financial Advisers in Yorkshire.

Our(UK Qualified) advisers take the time to learn about each client's current financial situation and future objectives and applying their indepth knowledge of available financial products and providers and the relevant tax regime, offer bespoke financial planning solutions in a clear and easy to understand manner.

We are able to recommend solutions to a wide variety of financial planning needs ranging from straightforward financial protection and mortgage-related needs to complex tax-efficient offshore investment requirements.

Check out www.efpg.net for more information.

European

Planning Group(Spain) Oficina 1 Centre Profeslonal Levante Plaza Juan Macias San Pedro de Alcantara Malaga, Spain

Tel:(0034)951 275 312 Email: spain@efpg.net www.efpg.net

The title for this article was suggested in jest seeing as I have just as much passion for both of the subjects. But when driving home to write it there was a realisation that both subjects shared a lot in common. The analogies between the two were just too tempting to pass.

If the regulator is the Harley Davidson of the world then the industry must be a Japanese racer. Harleys are fat and slow but built on established technologies. Jap bikes are fast and rely on the latest technologies to give them the sharp edge that is needed to remain ahead in an ever increasing industry. Similarly, Harley drivers tend to be old, fat and bald (I can tick all three of the boxes!) and regulators are no different, their strength lies in the experience of surviving too many close calls, watching and learning from the mistakes of oth ers. Racers, young and lean, sel dom have the time to consider the consequences of their actions until they have crashed and burned. Watching the world go by from a

David M.Parody

comfortable seat of a Harley allows the regulator to give consideration to the wider issues that affect the financial services industry.

When considering the implica tions of granting a licence applica tion it is not the interests of the sponsors of the application that are high in the regulators mind but that of its potential customer base, the general population and the reputa tion of the jurisdiction that need to be balanced.

If a new international standard is adopted or new EU legislation enacted, the regulator needs to ensure that what it develops is fitfor-purpose.

To a certain extent this is no different than browsing through the endless combinations of extras that Harley owners can purchase to enhance (or spoil) their bikes. One shinny bit of chrome here,one engine tuning kit there. At the end ofthe day it is still a motorbike with two wheels, an engine, a throttle and hopefully,some brakes. What gets added to it can make it better or worse but the basic principle is there.

It is how that choice is made that separates the good from the bad in the regulatory world. The article's title points to the "Art of Regula tion" and it is precisely that. Many would argue that regulation is infact scientific and not an art form. At the FSC we would disagree,

Over the last few years the FSC has been working very hard to ply its trade as an art form seeking the right balance between what is the best-in-breed and best-in-show. What is appropriate in other juris dictions may not be the best solu tion for Gibraltar.

The risk assessment processes to which all regulated firms are subjected to has been developed in-house and has won the admi ration of many external parties. We will shortly be consulting the industry on a major revision to the Anti-Money Laundering and Combating the Financing of Terror ism processes which we believe are both innovative and practical, also developed locally to address local issues and concerns.

The application of major EU Directives like Basel II and MiFid will have a huge impact upon the local industry and it is our duty to ensure that whilst all international standards and expectations are met, we do this in a way in which the industry can cope with.

It is not just international initia tives that drive the regulatory pro cesses. We hope to be in a position to consult with the insurance indus try, in early 2007, with a complete re-write of the supervisory returns submitted to us as we know that this is presently a major compliance cost to the industry.

Some Harleys are the epitome of minimalist whilst others seem to have put on everything including the kitchen sink. He hope to have found the right combination for our model and we spend enough time ensuring that it is properly polished before taking it out for a ride.

Regulators, like bikers, have a bad name. Bikers may wear a uniform of leathers and tattoos whereas regulators dress up in business suits and ties. Both are just as imposing for what they represent but at the end of the day these stereotypes are largely unfounded.

A comment in the local press earlier on this year caused some consternation, it was that the FSC was"cuddly" and it referred to our corporate rebranding. This was a move away from the castle and key logo in red to a wavy representation of the Rock's profile in blue. The former represented bureaucracy and a warning sign (straight lines and red)whereas our present logo, approachability and professional ism(wavy line and blue).

It was an intentional rebrand ing that personified the ethos of what, as a regulator we wanted to achieve. The FSC is approachable and professional and would rather it be consulted about potential issues rather than having to learn about it the next day in the press.

At a recent seminar of Compli ance Officers from around the world I described the FSC's regu latory approach as an elastic band. This elastic band can change shape as well as size. It is a continuous shape as it is not broken and the shape and size fits the business rather than the other way round. If placed around a wrist you may notice that the elastic band is there and if you pinch it and let it go you definitely notice it. But, it does not impede a firm from doing its business within the confines of the regulatory approach.

There lies the art of the regulator, in deciding how tightly it should be felt. The biker equivalent is the moto of every biker "Live to ride and ride to live".

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