Strength of the Rock: Interview with Samantha Barrass

For Gibraltar, the relationship it has with the UK as an overseas territory is critical to its identity. It is also vitally important to the operational and regulatory approach of its commercial and public organisations. In this interview we talk to Samantha Barrass about her achievements as CEO of the Gibraltar Financial Services Commission over the past four years. We look at the regulatory challenges and opportunities for its population of the area and with the prospect of Brexit on the horizon, what preparation is being undertaken to ensure financial services stability in Gibraltar.

As the CEO of Gibraltar Financial Services Commission for over four years, what would you describe as your biggest achievements to date, both internally and externally?

There are key areas I would highlight that I am most proud of. Firstly, the work that we have done with all of our stakeholders in Gibraltar – the staff, our Board, licensees, and the Government – in building a forward-looking consensus on what is needed to continue delivering a strong regulation for tomorrow. That, in my opinion, is a fundamental task for any Chief Executive of a regulator and a key mark of success.

Developing this consensus is an achievement and has involved some holding of nerve, including when it has come to the significant increase in resource within the Commission. We have more than doubled the budget and headcount in the past four years.

We have worked with the Gibraltar Government to implement a number of strategic, legislative reforms to rationalise and modernise the environment under which the Commission is undertaking financial services regulation. Although there has been much debate along the way, there has never been a moment where I have felt this common consensus has been at risk, let alone broken, amongst our stakeholders.

The second area of significance has been in strengthening, deepening and broadening our relationship with international regulators. It has been particularly important as the majority of consumers of the financial services we regulate are outside of Gibraltar, primarily in the UK but also elsewhere in Europe and internationally. Enhanced and strengthened relationships in those jurisdictions have been important in building a greater confidence and collaboration which is necessary to do our role.

Finally, I am very proud of the support, engagement and determination my staff has demonstrated every step of the way. There is an amazing team spirit throughout the organisation, which has been crucial in achieving our objectives. This has been important against the backdrop of a significant change programme, a new senior team and new staff coming in to the organisation. It has impacted almost tangibly on our organisational ‘personality’.

I would describe this personality as extrovert, un-bureaucratic, imaginative, responsive, agile and accessible to people: it has become a hallmark of our organisation.

You have touched on a number of challenges and opportunities, but are there any that you would particularly like to highlight?

I firmly believe that necessity is the motherhood of invention. If there is no possibility to achieve something positive from a situation then it is a poor crisis: opportunities are often born out of challenge.

To date, Gibraltar has implemented all EU requirements and international standards and, more often than not, this has proven beneficial for the jurisdiction. Some of these directives have improved the regulatory framework significantly, particularly in the insurance sector. The activity carried out here has added value towards our future regulation.

The failure of Enterprise Insurance Company in 2016 was a major challenge for us. The company had footprints into the UK and Europe and was one of the legacy companies which I inherited. This cut chords into the work we needed to do in the insurance sector. Through this however, we developed our working relationships and engagement with other European regulators and bodies such as the European Insurance and Occupational Pensions Authority (EIOPA). Together, work was carried out on passporting platforms and this helped to form working level strategies with regulators across Europe on companies of mutual interest.

Brexit has been an enormous challenge, but one that we are very proactively tackling and working closely with the UK Government to move forward.

“Opportunities are often born out of challenge.”

Gibraltar has a small population but a global corporate reach. How does that affect your role as a regulator?

I believe this makes us think very differently. Gibraltar’s population is just over 30,000 and consumers are of upmost importance. This is one of the reasons for us having carried out a significant amount of work in consumer education over the past year.

The organisations that we regulate which operate outside of Gibraltar are also very important to us. For example, our insurance sector underwrites 99 per cent of its business outside of Gibraltar. This means that a central function of our regulation is to think about how we represent consumers in other jurisdictions. This thinking includes considering how much of our supervision budget needs to be spent outside of Gibraltar, what relationships we need to develop with other regulators and ensuring that we have a good understanding of what is important in other jurisdictions when it comes to consumer protection. We need to be aware of local sensibilities in other parts of the world: this is a central part of our business model.

With interests and responsibilities in many jurisdictions outside Gibraltar, is it very important that your staff is representative of those other geographies?

I take a stratified approach to this particular area and it is at the heart of what our organisation is about. There is a large number of Gibraltarians working for the GFSC, with the senior management team being made of 50 per cent local employees. The excellent education system in Gibraltar provides a great resource  base to bring people in and train them.

We do also recruit from outside of Gibraltar, with many staff members joining us from the UK and other parts of the world such as Ireland, New Zealand (other than myself), Poland, Spain and Italy.

in my experience Gibaltarians are very outward looking, not particularly insular and ultimately, ultimately very interested in what is going on in the rest of the world, which provides a great attitude and approach from our staff.

As we look to the future and the path towards Brexit, how is the Financial Services sector in Gibraltar preparing for the EU?

Many financial services organisations that we regulate provide services in the UK. Our relationship with the UK is fundamental, and the UK Government has made it clear to the Gibraltar Government that this will continue after the 2016 referendum. I need to highlight that 96 per cent of the Gibraltar population voted to ‘remain’ in the European Union and as such, this commitment from the UK was vital.

Since 2016, our work has focused on providing a secure foundation for the post-Brexit environment for Gibraltar. We have a lot in common with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) and are working closely with them to make footprints in Europe. Personally, I am taking a similar approach to that of Sam Woods and Andrew Bailey to encourage strong forward-looking contingency planning.

“Our relationship with the UK is fundamental.”

More broadly, do you think the overall regulatory landscape in Gibraltar will diverge significantly post-Brexit?

We will be keeping a close eye on the UK, as one of the commitments made so far is to ensure that our regulation will deliver the same regulatory outcomes in terms of consumer and market protection as those delivered by the UK.

In terms of standards, I do not see these diverging drastically for financial services. Most EU standards derive from international agreements which the UK has taken a leading role in developing. Some differences may emerge, but I do not expect to see a massive level of divergence as this would not be consistent with international standards.

From an international and European perspective, does Brexit present new opportunities for collaboration and partnership with Gibraltar?

I do not think any more than before as we are constantly stepping up our engagement with international bodies. An example of this is our relationship with the International Association of Insurance Supervisors (IAIS), an international body we have been putting more investment into in past few years and will continue to do so.

Do you anticipate that Gibraltar will be a more or a less attractive place for people to live and work post-Brexit?

Gibraltar is an amazing and vibrant place to live and work in. My kids and I have had a wonderful time here the past four years, with the standard of living increasing as investment continues in the local environment, schools, tourism and culture.

A key issue most people must be aware of in a post-Brexit environment is the border with Spain and how that will continue to work. The practical issue is that a significant number of people who work in Gibraltar live either full or part time in Spain. There are over ten-thousand Spanish workers that come in to Gibraltar every day for work, as well as a great number of goods and services moving through that border. For this reason, it is incredibly important that the border continues to operate efficiently.

Gibraltar has had great success with the gaming and insurance industries, and it is now one of the first to consider the regulation of Distributed Ledger Technology. How important is innovation and agility for the regulator in Gibraltar?

Innovation and agility are critical for us; it is a common theme that runs through our organisation. We cannot be clunky and bureaucratic – in fact some of our biggest successes have been achieved by not taking that approach.

Since 2018 we have been working with the Government of Gibraltar regarding the regulation of Distributed Ledger Technology (DLT), of which cryptocurrencies are just one mechanism. DLT is considered by many to be the next big disruptive innovation since the internet. Our regime has purposefully not targeted any particular offshoot of it and we have introduced a mandate effectively saying that ‘if you wish to use DLT to hold or transfer value belonging to others by way of business, you need to be regulated’. We are the first regime internationally to do this through a high-level outcomes-focused approach and to do so we have worked with some of the foremost experts in this area.

The advice has been that some of the DLT business models currently in play will rise, fall and change significantly. We saw this with the dot-com boom: some of the initial business models did not stand the test of time and this is something we are taking into consideration.

The jury is still out on cryptocurrencies. Mark Carney made a speech in March in which he said that cryptocurrencies are not forming enough of a social use to have mass adoption. He did however refer to DLT as something that was quite different and an area that regulators could look to prove a regulatory framework for. That is what we have done and have received a large number of applications as a result. In the coming months, we will be looking to authorise the first handful of applications.

In the modern financial world, as with many other sectors, governance is increasing in importance. What does this mean for GFSC?

This is probably the single most important factor for any organisation. Looking at organisational failure and where things have gone wrong, in most cases they originate from a failure in governance.

The GFSC’s most prominent risk factor is the way we operate, and our own oversight of firms is reliant on the strength of their governance. We always look to see if there is a strong board, able to bring robust independent challenge. If that is the case, then by and large there shouldn’t be too much to worry about.

Samantha Barrass – Biography

Samantha Barrass became Chief Executive Officer of the Gibraltar Financial Services Commission on 17th February 2014. She was previously an Executive Director at the Solicitors Regulatory Authority (SRA) in the UK.

Prior to the SRA, Samantha’s career included 10 years with the Financial Services Authority (FSA) in the UK where she undertook a variety of regulatory roles spanning the delivery of new regulatory approaches and policy at both a domestic and international level, the supervision of markets and exchanges, and was one of the first economists employed by the FSA to develop cost-benefit and other evidential techniques for new regulation.

Samantha began her working career at the Reserve Bank of New Zealand as an economist focusing on monetary policy strategy and economic reform.

This interview was featured in the Saxton Bampfylde Winter 2019 Regulation edition of CANVAS.  To read more visit the Canvas homepage

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