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Security Interests (Amendment of Law) (Jersey) Regulations 201-

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.

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A decision made 29 May 2013:

Decision Reference: MD-E-2013-0054

Decision Summary Title :

Security Interests (Amendment of Law) (Jersey) Regulations 201-

Date of Decision Summary:

24 May 2013

Decision Summary Author:

 

Director,

Finance Industry Development

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 :

Report to Security Interests (Amendment of Law) (Jersey) Regulations 201-

Date of Written Report:

24 May 2013

Written Report Author:

Director,

Finance Industry Development

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

 

Approval of the draft Security Interests (Amendment of Law) (Jersey) Regulations 201- for lodging.

 

Decision(s):

 

The Minister approved the Security Interests (Amendment of Law) (Jersey) Regulations 201-  for lodging and directed that the documents should be lodged au Greffe with a view to securing a debate by the States on 16 July 2013.

 

Reason(s) for Decision:

 

These Regulations make amendments to the Security Interests (Jersey) Law 2012 (“the Law”).  These Regulations are made under Article 93 and 95 of the Law and make a variety of amendments to the Law necessary to bring it into force. They are designed to supplement, and clarify certain provisions in Parts 1, 2, 4 and Schedule 2 of the Law.

 

Resource Implications:

 

There are no resource implications as a result of this decision.

 

 

 

 

Action required:

 

That the documents be lodged au Greffe for debate by the States on 16 July 2013 or as soon as possible thereafter.

 

Signature:

 

 

 

Senator Ian Joseph Gorst

Position:

 

Chief Minister of Jersey

Acting on behalf of the

Minister for Economic Development

Date Signed:

 

 

Date of Decision (If different from Date Signed):

 

 

Hide report
Security Interests (Amendment of Law) (Jersey) Regulations 201-

MINISTER FOR ECONOMIC DEVELOPMENT

 

Report to the Draft Security Interests (Amendment of Law) (Jersey) Regulations 201-

 

 

Background and Recommendation

 

  1. The Security Interests (Jersey) Law 2012 (“the Law”), which replaces the existing law governing security interests in intangible movable property, was adopted by the States on 19 July 2011, received Royal Assent on 10 July 2012 and was registered by the Royal Court on 27 July 2012.  It is intended that the Law will come into force as amended by the Security Interests (Amendment of Law) (Jersey) Regulations 201- (“the draft Regulations”), made under Articles 93 and 95 of the Law.  The Regulations are designed to supplement, and clarify certain provisions in Parts 1, 2, 4 and Schedule 2 of the Law.

 

  1. It is recommended that the Minister approve the draft Regulations (including the report attached to it) and sign the Decision Summary. It is further recommended that the Minister should direct that the documents should be lodged au Greffe for debate by the States on 16 July 2013.

 

Development and Consultation

  1. Consultation has been underway on the draft Regulations since the Law was first lodged for debate in 2011. Consultation has been conducted through a working group containing a large number of industry experts in banking and finance law. These are the individuals in industry who will ultimately make use and advise upon the Law when it has been brought into force.  The work undertaken by the working group has been supplemented by the advice of Professor Sir Roy Goode QC, a world leading expert on securities law, who advised on the policy behind the Law. In summary, there has been significant consultation with those members of industry who are most concerned in this area of law.

 

Scrutiny

  1. This legislation has been referred to the Economic Affairs scrutiny panel for their consideration

 

 

The Draft Regulations

  1. The draft Regulations make amendments to each of the individual Parts of the Law which are felt to improve the Law before it is brought into force. This includes the following amendments:

 

  1. Article 4 is expanded so as to make the Law applicable to a wider range of interests in intangible movable property which are connected to Jersey because the property is situated in Jersey, the relevant instrument is governed by Jersey law or the person owing the relevant obligations is a Jersey company or Jersey individual. 

 

  1. A power is inserted to prescribe by Order security interests to which the Law is not to apply or is to apply only to the extent prescribed. This will enable certain exemptions to apply to parts of industry who wish an alternative method of perfection to that previously provided with the detail of such exemptions being provided in an Order.

 

  1. The provision enabling a person to take a security interest in its own obligation is expanded to enable a company incorporated by shares to take a security interest from its shareholders in its own shares. 

 

  1. Security interests in a ship or aircraft or a share in a ship or aircraft have been added to the list of interests excluded from the Law because they will be dealt with separately under specific provisions either in this law or in another law. 

 

  1. Consequentially, various changes have been made to the priority rules, particularly those relating to deposit accounts and security interests in order to deal with priority conflicts not adequately covered by the existing provisions.  Other changes are designed to protect rights of set-off of banks and intermediaries.

 

  1. A new Schedule 2 deals with transitional provisions affecting security interests in force when the Law comes into force and continuing in force thereafter.

 

 

 

Security Interests Register

  1. An integral part of the new Law is the Security Interests Register (“SIR”) which is an online registry system where security interests can be perfected by Registration. The Register has been built by the Jersey Financial Services Commission (“the JFSC”). The Registry system that has been created is world leading and has been benchmarked with the other leading systems around the world. Significant work has been performed on the register by the organisation hosting this important facility, namely the team comprising the Deputy Registrar of Companies at the Jersey Financial Service Commission.

 

Security Interests Order

  1. An Order is currently being drafted pursuant to Article 92 of the Law which provides various data entry requirements and procedures for registration under the Law. This Order will be complemented by non- legislative material in the form of guidance notes on the register. It is anticipated that the Order will be signed by the Minister on the same date as the Law comes into force.

 

  1. It is intended that the new law shall be brought into force in a staged manner in order to permit the registration provisions to go live before certain other substantive provisions. 

 

Financial and manpower implications

  1. There are no financial or manpower implications for the States of Jersey arising from the adoption of the draft Regulations.

 

Recommendation

  1. It is recommended that the Minister approve the draft Regulations (including the report attached to it) and sign the Decision Summary. It is further recommended that the Minister should direct that the documents should be lodged au Greffe for debate by the States on 16 July 2013.

 

Director, Finance Industry Development

24 May 2013

 

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