The IMF, invited by the Government last year to review our regulatory regime in relation to banking, insurance and anti-money laundering and terrorist funding measures, has given the FSC a glowing report that puts Gibraltar at the top table among jurisdictions meeting the IMF’s exacting standards. Fittingly, the report is likely to be released within weeks and will closely coincide with the fourth anniversary of Killick’s arrival to take charge of the Europort FSC team.

   It’s a team which he has inspired with his own ethic and which has doubled in size since he became Commissioner, placing leadership responsibilities on a growing number of Gibraltarians so that today Killick and the head of the insurance division, Chris Collins, are the only ex-pats in the 26-strong team. In building it, he has met a commitment made early in his tenure — wherever possible to recruit and promote Gibraltarians.

   But it’s his approach to regulation and a conviction that most businesses fall foul of the rules by mistake or from ignorance — that differentiates Killick’s regime from those of other regulators. “My aim and the aim of my team at the FSC is to help the firms we visit — not to try to catch them out,” Killick told me over lunch recently. “We see our local regulatory system as being based on cooperation rather than antagonism.

   “Fortunately I have been able to recruit people with talent and who are positive to change. In the business world there are far too many people who will listen, accept 90 per cent of the advice one gives them — and then ignore the most important 10 per cent… Fortunately my team are not like that.”

    The concept of “the team” looms large in any conversation with Killick and he speaks of his colleagues — and his job — with a boyish enthusiasm that matches his looks. At 44, he appears much younger than his years and, at times, an almost schoolboy quality pops to the surface of his passions. It’s a likeable trait that conveys an infectious enthusiasm and that encourages the impression of a friendly approach to even the toughest problems.

   And it’s something that is drummed into the FSC team.

   “We employ people for their attitude, the necessary skills can be taught or trained,” he explains. “In fact almost all of the staff — who are already talented — are studying for additional qualifications. But what is really important is attitude. This needs to be right and to fit into the cultural background, the business environment in which we operate.

  “One of the advantages of a relatively small jurisdiction is that someone can phone the FSC and speak to a known person, there’s none of the bureaucratic anonymity that can be daunting and counterproductive. And there is no room for bullying — either among the team or in our relationship with players in the finance sector. We have proved that the idea that you cannot be a good regulator and at the same time be human and approachable is a myth.”

   In his recruitment drives — though the Pratt report two years ago suggested that the FSC needed more staff — Killick has avoided over-recruitment. Regulators have tended to throw people at problems, but we try to look at other ways of solving them.”

   He and the FSC have come under fire in some quarters for what is claimed to be a “slowing down” in the speed with which applications for licences, registrations or other compliance or regulatory clearances are handled.

   I pointed out that in the past one of Gibraltar’s “selling points” outside the jurisdiction was not just the accessibility of the FSC but the speed with which it handled its dealings — taking only weeks, where other jurisdictions took months.

   “There are slight delays, but these are not all of our making,” Killick replies. “We are setting established service standards and hope by the end of the year to publish statistics which will show just how fast we turn around applications — and I am sure that this will prove the anecdotal evidence is wrong. You must remember, too, that the volume of applications has grown considerably. Where at one stage we were getting one or two applications at a time, we are now dealing with eight or ten.

   With two years of his present contract still to run, Killick’s position will change subtly when a new Act (which he helped design) takes effect and switches the Commission’s accountability to the Gibraltar Government rather than to the UK, with its members — appointed on individual merit — chosen by the Government instead of the Governor.

   “There will be other changes in terms of corporate governance. Power will be vested in the Commission rather than the Commissioner who will delegate it to an Executive Officer directly responsible to them. With all the power vested in me at present it is a ludicrous state of affairs… although I am not so stupid as to act in an autocratic way, I could have done so. The new system provides proper checks and balances. I am also currently chairman of the Commission and the Act will ultimately lead to a separation of roles.”

   “There will be other changes in terms of corporate governance. Power will be vested in the Commission rather than the Commissioner who will delegate it to an Executive Officer directly responsible to them. With all the power vested in me at present it is a ludicrous state of affairs… although I am not so stupid as to act in an autocratic way, I could have done so. The new system provides proper checks and balances. I am also currently chairman of the Commission and the Act will ultimately lead to a separation of roles.”

   And, far from resenting the new Act which will erode some of his present powers, Killick welcomes it as “legislation that reflects corporate best practices… which is what the FSC should be all about, anyway.”

   Whether or not he is appointed for a third term as the Commission’s CEO, Killick intends to remain in Gibraltar. “There’s a sell-by date on all CEO and I had long ago reached an agreement with the Commission that mine would be a maximum of nine years,” he smiles.

   Killick has been involved in compliance and regulation almost from the start of what he once famously described as “an industry in its own right.” As a graduate trainee with the Midland Bank and the only one with a legal background to his studies he was snapped up as a member of the bank’s small, newly-formed international compliance team. 

  “You can tell how important I was,” he mocks himself and the smiling boyish charm surfaces again. “In September 1986 I was sent round to HM Stationery Office to collect 30 copies of the Financial Services Act on the day it was published.”

   The Act was Britain’s first serious attempt to set up regulatory structures within the financial services industry — so that, in a sense, Killick has been involved in the system since its outset.

   “Because it was so new, there were no ‘wise old birds’ telling us what to do and how to do it or trotting out the line that ‘things have always been done this way’,” he explains. And though he does not say so, this ground-floor introduction to financial regulation will have allowed him to develop his own views on how it should be put into practice — views that have shaped his approach to the regulatory regime on the Rock.

   The expertise he acquired led to his appointment as compliance officer with the National Provincial Group and three years later he joined the staff of the Financial Supervisor of the Isle of Man, gaining experience of offshore regulatory procedures in their early stages. Within four years he was the deputy chief executive of the IoM’s regulatory authority. This was followed by a brief spell on the banking and investment side of the Cayman Islands Monetary Authority — an appointment cut short when his wife became pregnant with their daughter Cressida, and Killick opted to return with her to the UK for the birth.

   Back in Britain he joined the international accountancy group KPMG as a director to set up a unit providing regulatory advice to the smaller financial centres. It took him back to a base in Yorkshire — for which he had developed an affection in his undergraduate days at Leeds University, and where seven years ago he bought a small farm — though he was to spend much of the next four years traveling to 12 different jurisdictions. Part of his role was to liaise with the Foreign and Colonial Office in relation to overseas territories.

   “Then the post of Commissioner in Gibraltar was advertised and I applied for the post,” he recalls. “Four years ago next week, I arrived to take up the job… and the rest is history.”

   And what a history that has been. For in those four years he has contended with — and overcome — allegations of money laundering and other attacks from Spain to establish Gibraltar’s reputation as a finance centre that matches any other in Europe… and is better than many. He has also strengthened his international credentials, not only as a doughty fighter on Gibraltar’s behalf at international level, but as the principle contributor to two reports for Transparency International on the use of corporate vehicles in relation to money laundering. 

  “Yes, it does go on,” he says. “And it’s a sphere where there is still a total lack of level playing fields… though that is being dealt with in the EU’s third Money Laundering Directive which should exert greater pressure on those, such as the US, who do not comply. But what I most dislike about it is the hypocrisy that exists between certain onshore jurisdictions who believe, or pretend to believe, that offshore centres are to blame. In fact, in real terms — and particularly in the case of Gibraltar’s AML procedures it is up to the onshore centres to start playing catch-up.”

   And he is critical, too, of overregulation “designed to meet political imperatives”. “This is particularly true of measures which are claimed to be introduced to prevent the financing of terrorism. Terrorism is not expensive and a terrorist certainly doesn’t need a bank account or other financial methods to do his evil work. Similarly some of the KYC (‘know your customer’) demands are of little use as cases of identity fraud and fake utility bills have frequently proved. But as a small jurisdiction we have to comply, though it’s a cause of frustration that we are being forced to do so… because the international authorities feel there is a need to be seen to be doing something.

   “In fact complex and costly structures are being put in place at the cost of what could be more effective action. Approaching it in this way is akin to doing heart surgery with a machete.”

   It’s a good line on which to end.

by Peter Schirmer