Financial Services (Financial Services Business) (Amendment No. 2) (Jersey) Order 2017

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 10 March 2017:

MINISTERIAL DECISION REFERENCE: MD-C-2017-0027
DECISION SUMMARY TITLE: Financial Services (Financial Service Business) (Amendment No. 2) (Jersey) Order 201-
DECISION SUMMARY AUTHOR:	Lead Policy Adviser, Financial Crime and Private Wealth	IS THE DECISION SUMMARY PUBLIC OR EXEMPT?		Public
REPORT TITLE: Financial Services (Financial Service Business) (Amendment No. 2) (Jersey) Order 201-
REPORT AUTHOR OR NAME OF PERSON GIVING REPORT: (if different from Decision Summary Author)	Lead Policy Adviser, Financial Crime and Private Wealth	IS THE REPORT PUBLIC OR EXEMPT		Public
DECISION AND REASON FOR THE DECISION: The Chief Minister: makes the Financial Services (Financial Service Business) (Amendment No. 2) (Jersey) Order 201-(the “Order”); directs 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 The Order amends the description of Class O financial service business as set out in the Schedule to the Financial Services (Financial Service Business) (Jersey) Order 2009 (“Class O”). In summary, Class O financial service business allows “lighter touch” regulation in respect of the activities of some accounting and auditing firms, who provide support services to Jersey residents in terms of secretarial services and the provision of a registered office address to those customers’ local businesses. The “lighter touch” regulation was considered appropriate because the risks associated with this type of business were considered less than the financial service business undertaken by a more mainstream trust company business, providing the following risk mitigating criteria are met: that a limited range of services are offered which exclude the fiduciary business of acting as a trustee or a director; that the limited range of services are only offered to locally resident persons (reputational risk could theoretically be contained within the Island); and that the service provider offering these services does not hold, manage or control client assets (less opportunity for client assets to be misappropriated). However, it has become apparent that the current wording of Class O is being interpreted wider than was intended and is being used in respect of the provision of services to Jersey body corporates (on the basis that the Jersey body corporate is the Jersey resident person in question) where there is no connection to or ownership by Jersey resident individuals. The amending provisions in the Order makes it clear that a Class O registration is only available where it is natural persons resident in Jersey who are the beneficial owners of the company in respect of which services are provided. Specifically, the new provision requires that all beneficial owners of any company to which the services are provided are individuals ordinarily resident in Jersey. The Order also includes certain transitional provision including in respect of existing Class O service providers, who, following the coming into force of the Order, will continue to be treated as being compliant for an “amnesty” period of 6 months or, if by then the provider has an application for registration under another class of financial service business still outstanding, until that application is finally determined. The JFSC has consulted industry on the proposed Order, as required by Article 8(3) of the Financial Services Commission (Jersey) Law 1998. The Board of the JFSC has recommended that the Chief Minister makes the Order.
RESOURCE IMPLICATIONS: There are no resource implications for the States of Jersey as a result of this decision.
ACTION REQUIRED: That the Chief Minister sign and seal the Order and it be returned to the States Greffe for immediate publication and for notification to the States Assembly.
SIGNATURE: SENATOR IAN JOSEPH GORST			POSITION: CHIEF MINISTER OF JERSEY

DATE SIGNED			EFFECTIVE DATE OF THE DECISION