Decision and reason for the decision The Assistant Chief Minister acting under delegated powers and on behalf of the Chief Minister: - made the Order;
- directed that Officers notify the Publications Editor and the Law Draftsman that the Order has been made, forward the signed and sealed Order to the Publications Editor, States Greffe, and request the Greffier of the States to arrange for its notification to the States.
Reason Part 16 of the Companies (Jersey) Law 1991 (the “CJL”) includes a regime for the oversight of “Recognized Auditors” – that is, auditors who audit the financial statements of “market traded companies”. A market traded company is defined in Article 102(1) of the CJL. In essence (and subject to some exceptions, which the Order relates to) a market traded company is a Jersey company that has securities traded on a European Union (“EU”) regulated market (such as the London Stock Exchange). This oversight regime for Recognized Auditors has been deemed “equivalent” by the European Commission to the oversight regime for EU auditors established by the Statutory Audit Directive 2006/43/EC. The benefit of this EU “equivalence” for Recognized Auditors is that it may avoid the need for an auditor: - to have to apply for registration in each EU Member State in which the relevant market traded company has its securities traded; and
- to be subject to the systems of oversight, quality assurance, investigation and penalties in each EU Member State in which it is registered.
Currently, “a company that is an issuer exclusively of debt securities admitted to trading on a [EU] regulated market, the denomination per unit of which is at least €50,000 or, in the case of debt securities denominated in another currency, equivalent, at the date of issue, to at least €50,000” is not treated as a market traded company by virtue of paragraph (a) in the definition of “exempt company” in Article 102(1) of the CJL. The genesis for this Jersey legislative exception is the current wording of Article 45(1) of the Statutory Audit Directive. However, EU Directive 2014/56/EC will amend Article 45(1) of the Statutory Audit Directive with the current €50,000 denomination limit increasing to €100,000 (subject to certain transitional provisions). Member States have to transpose the provisions of Directive 2014/56 into domestic legislation by 17 June 2016. To ensure that the Recognized Auditor regime remains aligned with the EU auditor oversight regime against which it has been assessed as “equivalent” by the European Commission, there is a need for the definition of “exempt company” in Article 102(1) of the CJL to be amended so that the exemption limit increases from €50,000 to €100,000 (subject to the same transitional provisions as in the EU legislation) with effect from 17 June 2016. In October 2015, the Jersey Financial Services Commission (the “JFSC”) gave advance notice of the proposed change to every Recognized Auditor registered with it and to the Jersey Society of Chartered and Certified Accountants (“JSCCA”): no objections to the change were received. The JFSC has been consulted on the Order as required by Article 219(1A) of the CJL. The Board of the JFSC has recommended that the Chief Minister makes the Order. | 
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