Commercial Legislation
Jersey is an autonomous jurisdiction with its own government, judiciary and legislation. In order to ensure that both the resident population and the finance industry are able to conduct commercial business with certainty and confidence, a full range of laws have been passed by the States of Jersey governing all aspects of commerce. In addition, the States of Jersey, primarily acting through the Economic Development Committee, constantly monitors whether existing laws can be improved or new laws introduced in order to ensure that the Island’s legislation meets the requirements of its users.
There follows a summary of Jersey’s key commercial laws and of the work in progress currently being undertaken in this area by the States of Jersey.
Existing Laws
Companies (Jersey) Law 1991
The Companies (Jersey) Law is the centrepiece of the Island’s commercial legislation and governs the creation, life and dissolution of Jersey companies. The guiding purpose of the law is to provide as much flexibility as possible to Jersey companies. There are a variety of different types of companies available under the law – ordinary companies, companies limited by guarantee, unlimited companies and limited life companies being just a few. In 2005, the States passed a significant amendment to the law that will permit the creation of Incorporated Cell Companies and Protected Cell Companies. This amendment is likely to come into effect early in 2006.
Financial Services (Jersey) Law 1998
This law empowers the Jersey Financial Services Commission (the Commission) to regulate Jersey businesses engaged in certain defined financial services businesses, such as, for example, investment business and trust company business. It requires such businesses to seek regulatory approval and provides mechanisms under which the Commission may issue codes of practice and ensure regulated businesses meet prescribed standards.
Banking Business (Jersey) Law 1991
The Banking Business Law governs the regulation of deposit taking business in Jersey. It is administered by the Commission which is responsible for the regulation of all financial services business in Jersey. In general, only a bank rated in the world’s top 500 in terms of capital may establish a bank in Jersey.
Collective Investment Funds (Jersey) Law 1988
This law regulates the creation of and provision of services to collective investment schemes. These are structures where money is pooled and managed on behalf of a number of investors, and may take many legal forms: investment trusts, unit trusts and limited partnerships being the most common ones. In general, any scheme which is offered to more than 50 investors and any entity providing services to such a scheme (for example, administration or fund management) will be required to seek a permit from the Commission.
Trusts (Jersey) Law 1984
A pioneering law that became the model for a number of jurisdictions and which governs all aspects of Jersey trusts.
Security Interests (Jersey) Law 1983
A law to permit the manner in which security may be taken over certain types of assets, including securities, bank accounts and intangible movable property generally, and the manner in which such security may be enforced.
Bankruptcy (Désastre) (Jersey) Law 1990
This law gives a remedy to unsatisfied creditors of Jersey individuals and companies who may petition the court to appoint a court official (the Viscount) to administer the debtor’s affairs for the benefit of his creditors.
Limited Partnerships (Jersey) Law 1994
Limited Partnerships are an increasingly popular vehicle, particularly in the context of collective investment schemes, and this law governs all aspects of their creation, life and dissolution.
Borrowing Control (Jersey) Law 1947
The Borrowing Control Law and the secondary legislation issued under it in 1958 are key regulatory laws. They permit the Commission to impose restrictions upon the manner in which monies are raised by Jersey entities. In practice consents issued under this law are frequently used to ensure that regulated structures such as collective investment funds and securitisations do not make certain changes without prior consent.
Forthcoming legislation
The States of Jersey in engaged in a continuous dialogue with users of the Island’s commercial laws in order to ensure that any potential improvements can be considered and if appropriate implemented without delay. At present, the following work is in progress:
A significant amendment is currently being drafted which will, among other changes, introduce a statutory framework for the reservation of powers to a settlor.
A brand new law is being refined that will provide Jersey with one of the most flexible and advance security regimes in the world.
