GFSC Guidance Note: Notification of Dividend Payments

www.gfsc.gi
GFSC Guidance Note
Dividend Payment Notifications
Version: 1
Publication Date: 16 July 2026

Gibraltar Financial Services Commission Guidance Note on Dividend Payment Notifications 2
Table of Contents

1. Introduction.......................................................................................................................................... 3
2. Requirement to notify the GFSC regarding a proposed dividend ........................................................ 3
3. Form and timing of notification............................................................................................................ 4
4. Assessment criteria .............................................................................................................................. 5
5. Appendix............................................................................................................................................... 6

Gibraltar Financial Services Commission Guidance Note on Dividend Payment Notifications 3

1. Introduction
   1.1 This Guidance Note sets out the Gibraltar Financial Services Commission’s (‘GFSC’s’) expectations
   in respect of dividend payment notifications.
   1.2 This Guidance Note applies to the following types of entity, which are referred to collectively as
   ‘firms’:

• Insurance and reinsurance undertakings1
  ;
• Credit institutions2
  ;
• Electronic money institutions3
  ;
• DLT Providers4
  ; and
• Virtual Asset Arrangement Providers5
  .
  1.3 This Guidance Note should be read in conjunction with:
• The Financial Services (Insurance Companies) Regulations 2020 (the ‘Insurance
  Companies Regulations’);
• The Financial Services (Credit Institutions and Capital Requirements) Regulations 2020
  (the ‘CICR Regulations’);
• The Financial Services (Electronic Money) Regulations 2020 (the ‘E-Money Regulations’);
• The Financial Services (DLT Providers and VAA Providers) Regulations 2020 (the ‘DLT
  Regulations’);
• The Financial Services Act 20196
  (the ‘FSA’);
• The Financial Services (Core Principles and Consumer Duty) Regulations 2024 (the ‘CPCD
  Regulations’)7
  ; and
• The GFSC’s Risk Appetite Statement
  8
  .

2. Requirement to notify the GFSC regarding a proposed dividend
   2.1 Firms to which this Guidance Note applies are subject to restrictions on dividend payments under
   the following provisions (as applicable):

• Regulation 51A of the Insurance Companies Regulations;
• Regulation 98A of the CICR Regulations;
• Regulation 29A of the E-Money Regulations; and
• Regulation 5A of the DLT Regulations.
  1 As defined in Regulation 3 of the Financial Services (Insurance Companies) Regulations 2020 2 As defined in Regulation 4(1) of the Financial Services (Capital Requirements)(Technical Standards) Regulations 2026 3 As defined in Regulation 2(1) of the Financial Services (Electronic Money) Regulations 2020 4 As defined in Regulation 2 of the Financial Services (DLT Providers and VAA Providers) Regulations 2020 5 As defined in Regulation 2 of the Financial Services (DLT Providers and VAA Providers) Regulations 2020 6 The Financial Services Act 2019 7 The Financial Services (Core Principles and Consume Duty) Regulations 2024 8 The GFSC’s Risk Appetite Statement

Gibraltar Financial Services Commission Guidance Note on Dividend Payment Notifications 4
2.2 Under these provisions, (collectively referred to as the ‘Dividend Provisions’), a firm is only
permitted to make a dividend payment if:
a) it has notified the GFSC of the intention to make the payment; and b) the GFSC has not objected to the payment being made.
2.3 Sub-regulation (2) of each of the Dividend Provisions defines a ‘dividend payment’ as ‘a dividend
to shareholders or a distribution of capital of any other kind, including capital repayments for a loan to a parent or holding company’.
2.4 The Dividend Provisions support the GFSC’s wider responsibility under Section 65(1) of the FSA of
ensuring that firms continue to satisfy the threshold conditions9 in relation to all of the regulated activities for which they have permission. Furthermore, they supplement the wider requirement for firms to maintain adequate financial resources under Core Principle 10 of the CPCD Regulations.
2.5 Firms should consider relevant common law principles and requirements set out in company law
when deciding whether to declare a dividend.
2.6 The GFSC expects a firm to have a clearly documented dividend policy which requires its board to
carefully consider the sustainability of the firm’s earnings and its long-term capital availability. A firm’s dividend policy may be a standalone document or, where appropriate, a distinct section within a wider policy document that relates to the firm’s capital allocation/liquidity/solvency. A firm should be able to demonstrate that any planned dividend payment is appropriate in the context of its actual and projected business performance, as well as its current and future capital position, taking account of its risk appetite.
3. Form and timing of notification
3.1 Firms are encouraged to engage with their usual supervisory contact at the earliest possible
opportunity in order to discuss any proposed dividend payment. At a minimum, firms are required under sub-regulation (3) of each of the Dividend Provisions to notify the GFSC of a proposed dividend payment ‘not less than 30 days before the day on which the firm proposes to declare (or to otherwise make) the dividend payment’. The GFSC will only consider a notification once it deems it to be complete (i.e. once it has received the documentation set out under Appendix I and is satisfied that it contains sufficient detail to enable an appropriate assessment to be made). All documentation should be submitted via the GFSC Portal.
3.2 In the event that the GFSC wishes to object to a firm’s proposed dividend payment, it must issue
an objection notice at least 15 days prior to the dividend payment date, in accordance with sub￾regulation (7) of each of the Dividend Provisions. 9 The threshold conditions are set out in Schedule 12 to the FSA

Gibraltar Financial Services Commission Guidance Note on Dividend Payment Notifications 5
4. Assessment criteria
4.1 The GFSC’s assessment of a firm’s proposed dividend payment will focus, in particular, on the
firm’s current and projected business performance, and its current and future capital position, in accordance with sub-regulation (5) of each of the Dividend Provisions.
4.2 A firm considering a dividend payment should carefully consider the business environment in
which it operates and whether this could affect expected earnings in the future. For example, if a firm is encountering issues regarding its profitability, or expects a downturn in earnings in the foreseeable future, the GFSC will take this into account in its assessment.
4.3 The GFSC will also assess whether a proposed dividend payment may affect a firm’s ability to
execute its strategy over a three-year planning horizon. Firms should therefore ensure that any proposed dividend payment is in line with their documented dividend policy, strategic objectives and risk appetite.
4.4 Firms should consider the effect that a proposed dividend would have on the first day following
the payment. A firm cannot factor future forecast earnings into its own funds calculations due to the uncertainty associated with this method. Firms are therefore expected to be able to demonstrate that a proposed dividend payment would not materially affect their ability to meet ongoing capital adequacy requirements, including by modelling the effects of stress events in various severe but plausible scenarios.
4.5 The GFSC also expects firms to submit a recovery plan, outlining the results of the reverse stress
testing that firms are required to undertake.
4.6 The GFSC may object to a proposed dividend being paid if it is not satisfied that that the firm in
question has demonstrated that the dividend is appropriate, or if it believes that the payment may affect the firm’s ongoing compliance with the threshold conditions.

Gibraltar Financial Services Commission Guidance Note on Dividend Payment Notifications 6
5. Appendix
5.1 The following is a non-exhaustive list of the documentation that the GFSC expects firms to submit
as part of a dividend payment notification:

• Dividend policy (if any changes have been made since the previous version was submitted).
• Copy of the board minutes/resolution approving the dividend.
• Updated versions of the following documents, which set out clearly the assumptions that
  underpin them:
  o For insurance and reinsurance undertakings, an Own Risk and Solvency Assessment (‘ORSA’), or where a proposed dividend is clearly immaterial relative to a firm’s capital position and does not materially alter its risk profile, a focused assessment of the proposed dividend’s prudential impact, including stress-testing outputs and confirmation that the assumptions and conclusions of the firm’s existing ORSA and recovery plan remain valid; o For credit institutions, an Internal Capital Adequacy Assessment (‘ICAAP’), or where a proposed dividend is clearly immaterial relative to a firm’s capital position and does not materially alter its risk profile, a focused assessment of the proposed dividend’s prudential impact, including stress-testing outputs and confirmation that the assumptions and conclusions of the firm’s existing ICAAP and recovery plan remain valid; or o For electronic money issuers, DLT Providers and Virtual Asset Arrangement Providers, a focused assessment of the proposed dividend’s prudential impact, including stress-testing outputs and confirmation that the assumptions and conclusions of the firm’s regulatory capital calculations and recovery plan remain valid.
• Recovery plan (unless the proposed dividend is clearly immaterial relative to a firm’s capital
  position and does not materially alter its risk profile).
• Financial forecasts covering a three-year horizon, including baseline projections (i.e. assuming no
  dividend payment) and the effect of the dividend payment on the firm’s regulatory ratios.
• Updated business plan/strategy covering a three-year planning horizon.
  5.2 As stated above, the GFSC will not consider a dividend payment notification to be complete, and
  therefore will not begin its assessment, until the documentation above is submitted and the GFSC is satisfied that it is sufficiently detailed, accurate, up to date and consistent (e.g. the figures used in the ICAAP/ORSA/focused prudential impact assessments are consistent with those in the financial forecasts and recovery plan).

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