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Financial Services Commission (Amendment of Law) (Jersey) Regulations 201- - Draft

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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.

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A decision made 26 May 2011:

Decision Reference:  MD-E-2011-0078

Decision Summary Title:

Amendments to the Financial Services Commission  (Jersey) Law 1998 (the “1998 Law”)

Date of Decision Summary:

21 May 2011

Decision Summary Author:

 

Director, Finance Industry Development

Decision Summary:

Public or Exempt?

 

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Amendments to the Financial Services Commission  (Jersey) Law 1998

Date of Written Report:

21 May 2011

Written Report Author:

Director, Finance Industry Development

Written Report :

Public or Exempt?

 

Public

Subject:

Draft Financial Services Commission (Amendment of Law)(Jersey) Regulations 201- (the “Draft Regulations”).

 

Decision(s):

The Minister approved the draft Regulations and accompanying report and directed that they be lodged ‘au Greffe’  forthwith so as to allow the Regulations to be debated by the States at the earliest opportunity.

 

Reason(s) for Decision:

  • To extend the maximum period for which a Commissioner may be appointed so that it is consistent with the maximum periods of appointments of a similar nature in the Island.
  • To address a recommendation of the International Monetary Fund made as a result of its assessment in 2008 of the Island’s regulation of the financial services industry.
  • To correct an obsolete reference in the Schedule and Article 3 of the 1998 Law.

 

Resource Implications:

 

The draft Regulations will not have any effect on the financial or manpower resources of the States of Jersey, the Commission or the financial services industry in the Island.

 

 

Action required:

 

Draft Regulations and accompanying report to be submitted to the Greffier of the States for lodging ‘au Greffe.’

 

Signature:

 

 

Senator AJ Maclean

Position:

 

 

Minister for Economic Development

 

Date Signed:               

 

 

Date of Decision:                  

 

 

Hide report
Financial Services Commission (Amendment of Law (Jersey) Regulations 201- - Draft

 

FINANCIAL SERVICES COMMISSION (AMENDMENT OF LAW) (JERSEY) REGULATIONS 201-

(the “Regulations”)

 

 

Report

 

The Regulations propose amendments to the provisions relating to the terms and conditions of appointment of Commissioners of the Financial Services Commission (the “Commission”), which are contained in the Schedule (the “Schedule”) to the Financial Services Commission (Jersey) Law 1998 (the “Law”). 

The primary purposes of the amendments are –

  • to extend the maximum period for which a Commissioner may be appointed from 3 years to 5 years; and
  • to require the Minister for Economic Development to report to the States on any use of the power to terminate the appointment of a Commissioner, with that report providing only limited reasons for the decision, whilst giving the full reasons to the person concerned.

The opportunity is also being taken to make a small correction to remove an obsolete reference in the Schedule to Article 3 of the 1998 Law to the Finance and Economics Committee.    

Maximum period of appointment

Since the Law came into force, the Jersey Appointments Commission (the “JAC”) has been established and, by mutual consent, oversees the selection for appointment of Commissioners, the Chairman and the Deputy Chairman.  The code of practice published by the JAC in July 2006 recommends that, for appointments such as that of a Commissioner of the Commission, the total period in office should not normally exceed 10 years.  The code of practice also recommends that a second and subsequent re-appointment should normally be subject to open competition.

At present, the maximum period of appointment of a Commissioner is 3 years.  As a result, the practical consequence of following the recommendations of the JAC code of practice is that a Commissioner is unlikely to be in post for more than 6 years.   This is considered to be too short a period for a person to accumulate experience in the specialist work of the Commission, to function most effectively and for there to be the necessary continuity in the Board. 

The proposal to extend the maximum period of any appointment to 5 years would allow, with one re-appointment, a total time in office of 10 years.  This is consistent with the provision for equivalent appointments to the Jersey Competition Regulatory Authority and to the Board to administer the Depositor Compensation Scheme.

Associated with this proposed amendment is a new provision that will enable the States to extend the appointment of anyone appointed for less than the maximum period, providing that maximum is not exceeded.

Termination of appointment.

One of the recommendations of the International Monetary Fund (“IMF”) after its assessment in 2008 was that the reasons for terminating the appointment of a Commissioner should be made public.  The Schedule provides for the Minister to terminate an appointment on any of the grounds specified. 

In certain circumstances, full disclosure of the detailed reasons for terminating a person’s appointment could cause unnecessary and unwarranted embarrassment to the person concerned.  Therefore, the amendment proposed is for public disclosure to be by means of a report made to the States, with the reasons being limited to a reference to the relevant clause that provides the grounds for the decision; and for the full reasons to be given only to the person concerned. 

European Convention on Human Rights and Data Protection

Although there is no formal requirement for a declaration to be made regarding compliance of the Regulations with the European Convention on Human Rights, it was considered advisable to seek the opinion of the Law Officers on this issue.  The advice received confirmed that the proposed new provisions regarding termination of a Commissioner do engage rights under the Convention (particularly Article 8 – respect for private and family life), however, in the particular case, the limited interference can properly be justified.

The Data Protection Commissioner has also been consulted and has confirmed that the proposed amendments would be in accordance with the principles set out in the Data Protection (Jersey) Law 2005.

Financial and Manpower Implications

There are no financial or manpower implications for the States, the Commission or for the financial services industry in Jersey.

 

Director

Financial Services Development

20 May 2011

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