18 April 2012
We have heard encouraging things about the progress and development of our funds industry and there has been a lot of useful debate about the how we should develop and grow. The point I would like to now emphasise and focus on is the role of the Jersey government on 'the road ahead'.
We are very much open for funds business and the government of Jersey is supportive of growth through legislation-based product innovation, coupled with appropriate, high quality regulation.
Jersey's government has strong relationships with both the UK and EU and we will use these relationships to support the development of our funds industry, especially as it relates to critical new legislation, such as the AIFM Directive.
We have heard another speaker mention our tomatoes and potatoes. We grow delicious Jersey Royals, probably the best new potatoes in the world which will be hitting all good grocers in the UK now. They are delicious, please try them if you have not.
Jersey is a strong partner of the UK and in particular the City. As a centre, we provide great value to the UK as a significant ‘liquidity platform’ and we play an important role with the City of London in facilitating access to global capital. This is extended through the close alignment between the UK and Jersey’s international markets - for example BRICs, the Gulf and Latin America.
Jersey has a diverse and successful history in the world of financial services. Last year we celebrated ‘50 Years of Financial Heritage’ – a milestone for our industry and one that also celebrated the many decades of close working with the UK and the City of London as partners in a dynamic global industry.
The funds industry is one of the most successful elements of Jersey’s finance sector. It sits alongside the more traditional areas of banking and private wealth management and is now firmly established as the important ‘third pillar’ of our industry.
The funds industry in Jersey has grown strongly since its establishment in the 1960’s and Jersey now boasts one of the broadest portfolios of fund services of any international finance centre and is home to nearly £200 billion of funds business. The Island has developed specific expertise in alternative asset classes, particularly; private equity, real estate and hedge funds. This specialisation, based on expertise and reputation, has and will continue to drive innovation and growth.
As a government, we support this growth by putting in place:
- world-class legislation which provides the products the market needs
- expertise - delivered by one of the largest professional workforces of any international finance centre, made up of 12 and a half thousand professionals representing nearly a quarter of the Island’s workforce
- appropriate regulation - which balances Jersey’s reputation and strong business growth
Jersey’s government takes an active role in ensuring that this balance between legislation, expertise and regulation is aligned and competitive at all times through the determination of clear policy and the deployment of suitable resources to ensure Jersey remains at the forefront of international finance.
Our aim is to create the most dynamic and responsive centre possible, with a first-class education system, resilient, high-speed telecommunications and connectivity and investment in the bricks and mortar of business through the development of Jersey’s financial services district.
In 18 months, we will have fibre connectivity to every business in the Island. And this is alongside Jersey’s famous natural beauty and attractive living standards.
The overall success of the Island’s finance industry is underpinned by a clear, competitive and simple business taxation system, Zero Ten.
We have demonstrated that Zero Ten is fully compliant with the demands of the EU Code Group. We have also shown that Jersey has strong independent relationships with both the EU and the UK and is able to represent itself successfully at the highest level.
I speak of our tax system as a tax neutrality as it is important for funds. Our tax system underpins Jersey’s successful finance industry. It gives certainty to those who seek to place business with the Island and that certainty has never been greater than it is now.
Our solid public finances provide reason for further confidence. We are extremely fortunate in Jersey to have balanced budgets, no deficit, fully funded pension provision and significant strategic reserves.
I am also pleased to confirm that Jersey’s strong relationship with the EU is supporting industry in navigating the Alternative Investment Fund Managers Directive.
It is worth noting that Jersey’s joint approach with Guernsey, at a government level, working through our jointly funded ‘Channel Islands Brussels Office’ is providing a direct route to key policy and decision makers within the European parliament.
Jersey’s regulator, the Jersey Financial Services Commission, has an established relationship with equivalent regulators, at both national and supra national level, including the FSA.
These relationships are being put to good use as Jersey pursues a clear strategy of developing both an opt-in AIFMD compliant regime and an alternative regime for businesses whose target market does not include the European Union.
The industry can rest assured that we will continue to monitor regulatory developments to ensure that Jersey remains equally placed in these matters, compared to its competitors.
Turning our attention to the wider world, Jersey is mirroring the UK in the area of international growth, successfully developing business with China, India, Russia and the Gulf region. We will soon be exploring connections with the Latin America and other significant economies.
The Jersey government and its Council of Ministers are absolutely committed to forging international relations at both a diplomatic and commercial level, that support the growth of finance. We have a new Chief Minister and we have a Foreign Minister, Senator Sir Philip Bailhache. He and ministerial colleagues will support a significant international engagement programme.
A comprehensive programme of international engagement is paying dividends, with Jersey cementing relationships at both a financial and cultural level with many of the world’s largest and fastest growing economies, as well as working equally hard to maintain relationships with the UK and our other European neighbours.
This progress is evident from a growing network of Tax Information Exchange Agreements – now totally 28 and with many more under negotiation – and Double Tax Agreements, including those recently signed with Hong Kong and Qatar.
It is this commitment to international engagement at a government-to-government level that highlights our determination to ensure that Jersey retains its place as one of the clear leaders among the world’s international finance centres.
Open for business
In concluding, I hope that these remarks have confirmed to you that Jersey remains absolutely open for business and welcomes the continued growth of a vibrant and diverse funds industry.
While continuing economic headwinds still present enormous challenges for many markets, including the UK, Jersey, as a partner, is able to provide a valuable liquidity platform and support access to international capital on a significant scale.
In addition, our own political and financial stability, combined with the expertise of our industry, continues to provide an attractive proposition to international clients.
Finally, we understand that competition is intensifying. We understand that regulation is increasing at a global level. And we understand that more than ever before, it is expertise and service levels that are driving new business and jurisdictional choice.
The States of Jersey is absolutely committed to supporting industry so that Jersey remains at the forefront of international finance. We will continue to deliver the right balance between innovation, regulation and expertise to create a business environment that provides stability and growth.
Senator Philip Ozouf