Financial Services (Amendment of Law) (No. 2) (Jersey) Regulations 200-.

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made (24/08/2007) regarding: Financial Services (Amendment of Law) (No. 2) (Jersey) Regulations 200-.

Decision Reference: MD-E-2007-0168

Decision Summary Title :

Financial Services (Amendment of Law) (No 2) (Jersey) Regulations 200-

Date of Decision Summary:

23 August 2007

Decision Summary Author:

James Mews

Finance Industry Development Executive

Decision Summary:

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

Written Report

Title :

Approval of Financial Services (Amendment of Law) (No 2) (Jersey) Regulations 200- and consequential orders

Date of Written Report:

23 August 2007

Written Report Author:

James Mews

Finance Industry Development Executive

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Approval of Financial Services (Amendment of Law) (No 2) (Jersey) Regulations 200- (“the Regulations”) and consequent Orders

Decision(s):

The Minister approved the draft Regulations and authorised their lodging ‘au Greffe’ in time for them to be taken into consideration by the States on the 9 October 2007 or at the first available sitting thereafter.

In the event that the Regulations are adopted by the States, the Minister agreed to give consideration as to whether to approve five consequential Orders within one week of the States decision.

Reason(s) for Decision:

The proposed Regulations are one of a series of changes in order to transfer the regulation of functionaries of funds from the Collective Investment Funds (Jersey) Law 1988 (the ‘CIF(J)L’) to the Financial Services (Jersey) Law 1998 (“the Law”). These changes are part of a larger set of amendments all with the purpose of regulating all financial services businesses operating in Jersey under a single law. This will increase efficiencies in both the finance industry and the Commission in accordance with the latest international standards and good practice.

These particular changes include the creation of a new class of business, fund services business under the Law as well as consequential and transitional provisions.

Consultation has taken place with industry who support the changes contained in the Regulations.

Resource Implications:

No measurable cost or manpower implications arise for the Commission, the States or industry.

Action required:

The Finance Industry Development Executive to arrange, in conjunction with the Greffier of the States, for the draft Regulations to be lodged ‘au Greffe’ to be taken into consideration by the States on 9 October 2007 or at the first available sitting thereafter.

Signature:

Senator Philip Ozouf

Position:

Minister for Economic Development

Date Signed:

24 August 2007

Date of Decision (If different from Date Signed):

24 August 2007

Financial Services (Amendment of Law) (No. 2) (Jersey) Regulations 200-.

MINISTER FOR ECONOMIC DEVELOPMENT

APPROVAL OF FINANCIAL SERVICES (AMENDMENT OF LAW)(No.2)(JERSEY) REGULATIONS 200-

1 THE ISSUE

It is proposed to amend the Financial Services (Jersey) Law 1998 (“the Law”) through the Financial Services (Amendment of Law) (No 2) (Jersey) Regulations 200- (the Regulations”). The proposed regulations are one of a series of changes in order to transfer the regulation of functionaries of funds from the Collective Investment Funds (Jersey) Law 1988 (the ‘CIF(J)L’) to the Financial Services (Jersey) Law 1998 (“the Law”). Once this becomes law there will be a further five Orders to be approved to add necessary consequential changes.

It is recommended that the Minister for Economic Development approves the Regulations, and that the Finance Industry Development Executive takes the necessary steps to lodge the Regulations au Greffe to be debated by the States at the 9 October 2007 sitting or as soon as possible thereafter. It is also recommended that the Minister considers whether to approve the attached consequential Orders should the States approve the Regulations.

2 BACKGROUND

The Regulations have been through the normal consultation process. The proposals were subsequently comprehensively discussed with industry through two consultation papers published in February 2006 and a further Consultation in March 2007 contained the draft legislation. Industry has commented and is in favour of the amendments.

Proposals FOR NEW REGULATIONS

These changes are part of a larger set of amendments all with the purpose of regulating all financial services businesses operating in Jersey under a single law. This will increase efficiencies in both the finance industry and the Commission in accordance with the latest international standards and good practice.

The proposed regulations will transfer the regulation of functionaries of funds from the Collective Investment Funds (Jersey) Law 1988 (the ‘CIF(J)L’) to the Financial Services (Jersey) Law 1998 (“the Law”). This will enable the Commission to remove the requirement for functionaries to hold multiple permits under the CIF(J)L in respect of each fund for which they act. Instead, functionaries will be required to be register just once under the Law to carry on fund services business from within Jersey. In the main, existing persons carrying on Fund Services Business under the CIF(J)L will be “grandfathered” into the Law.

Industry and the Commission will benefit from reduced administrative time and costs arising from multiple permits being issued, and registration under the Law will provide a basis for confident marketing of fund services business. The regulation of funds and functionaries will continue to be consistent with the latest international standards and good practice and the Commission is satisfied that the changes proposed satisfy IOSCO’s Objectives and Principles which the Island is committed to matching.

Further, bringing fund services business functionaries under the Law will permit the Commission to issue Codes of Practice for these functionaries consistent with other areas of financial regulation in the Island such as trust company business and insurance business. The introduction of Codes for funds is an outstanding IMF requirement from its last inspection and it is vital to put these in place before the next IMF visit.

THE SUBSEQUENTIAL PROPOSED ORDERS

If the States approve the Regulations, it is proposed that consequential changes will be made by Order.

In summary, these consequential changes will enable most functionaries of unclassified funds to become exempt from the requirement to obtain a permit under the CIF(J)L as instead they will be regulated under the Law. In addition, an Order will be introduced dealing with the preparation of accounts. Overall there are four Orders proposed under the Law and one under the CIF(J)L as follows:

Financial Services (Investment Business (Fund Services Business Exemption)) (Jersey) Order 200- (“the Investment Business Order”)
Financial Services (Trust Company Business (Exemptions)) (Amendment No.2) (Jersey) Order 200- (“the Trust Company Business Order”)
The Financial Services (Funds Services Business) (Accounts, Audits and Reports) (Jersey) Order 200- (“the Accounts Order”)
Financial Services (Funds Services Business (Registration and Fees)) (Jersey) Order 200- (“the Fees Order”)
Collective Investment Funds (Permits) (Exemptions) (Amendment No 2) (Jersey) Order 200- (“the CIF Order”)

SUMMARY

In summary, the changes will:
1. Enable the Commission to integrate the regulation of funds functionaries under the same law as other classes of business helping to establish a more coherent and efficient regime;
2. Enable the Commission to move towards a regime where most fund functionaries will only have to register once in order to carry on fund services business speeding up doing business in Jersey;
3. Enable the Commission to issue Codes of Practice which is a requirement of the IMF;
4. Include related ancillary and consequential provisions.

No measurable cost or manpower implications arise for the Commission, the States or industry.

ISSUE AND RECOMMENDATION

It is recommended that the Minister for Economic Development approves the Regulations, and that the Finance Industry Development Executive takes the necessary steps to lodge the Regulations au Greffe to be debated by the States at the 9 October 2007 sitting or as soon as possible thereafter. It is also recommended that the Minister considers whether to approve the attached consequential Orders should the States approve the Regulations.

JAMES MEWS

Finance Industry Development Executive

23 August 2007

Draft Financial Services (Amendment of Law) (No. 2)

(Jersey) Regulations 200-