MINISTER FOR ECONOMIC DEVELOPMENT
FINANCIAL REGULATION (MISCELLANEOUS PROVISIONS) (JERSEY) LAW 200- (“FR(MP) Law”)
JERSEY FINANCIAL SERVICES COMMISSION (“THE COMMISSION”)
1 THE ISSUE AND RECOMMENDATION
1.1 The Commission requests that, by means of the FR(MP) Law, amendments be made to the Collective Investment Funds (Jersey) Law 1988 (“CIF”); the Banking Business (Jersey) Law 1991 (“BB”); the Insurance Business (Jersey) Law 1996 (“IB”); and the Financial Services (Jersey) Law 1998 (“FS”) (together, the “Regulatory Laws”).
1.2 It is recommended that the Minister for Economic Development approves the FR(MP) Law, signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for it to be lodged au Greffe by 29th July 2008, in order that it is debated by the States at the sitting commencing on 8th September 2008.
2 BACKGROUND
2.1 The amendments are considered to be a necessary part of the preparation for the IMF assessment of the Island’s finance industry, due to take place in October and November this year, in that they will implement international standards in the regulation of financial service businesses in Jersey, improve compatibility with the European Convention on Human Rights (“ECHR”); and make other minor changes.
2.2 The proposals dealing with questions of consistency between the Regulatory Laws (including the gateways), were among the matters that were identified during a self-assessment exercise, undertaken by the Commission, against international regulatory standards, including those issued by IOSCO[1] and the IAIS[2]. These are the standards that will be used during the IMF assessment in 2008. Time limitations prevented these matters being addressed at the same time as the amendments to the Regulatory Laws that were adopted by the States in November 2007 and which came into force earlier this year.
2.3 These consistency changes were the subject of a consultation process that took place in 2007, along with the other amendments made last year: that consultation included a series of seminars held for the finance industry at which the proposals were described and discussion and comment was invited. Such comments as were received were generally supportive, and none was adverse.
2.4 Other issues included in the FR(MP) Law are either of a general housekeeping nature or were matters that arose during the preparation of the previous amending laws and which could not be resolved in the limited time available: such matters were therefore also covered by the consultation process last year.
2.5 While there has not been time to consult on the final form of the draft law, a detailed presentation has been provided to Jersey Finance Limited so that it may invite comment from its members. The attention of the Data Protection Commissioner, who was consulted on the drafting instructions for the gateways to disclose restricted information, has also been drawn to the draft law.
2.6 The Law Officers Department have confirmed that there are no human rights issues and that the Minster may sign the statement of compatibility with human rights.
3 THE PROPOSALS
3.1 In summary the provisions will make a number of amendments to the regulatory laws.
3.2 They will update the limited range of exceptions (so called “gateways”), that allow for restricted information (information concerning the business or other affairs of any person obtained under or for the purposes of the Regulatory Laws), to be disclosed to another party without the prior approval of the person to whom the information relates. At the same time, the amendments will ensure that such exceptions are consistent across the four Regulatory Laws.
3.3 They will improve consistency across all the Regulatory Laws by: adding to the BB and IB provisions available in other laws for the Commission to apply to the Court for injunctions, and other orders; provide that the Commission may appoint an inspector under the IB, as under the other laws, instead of having to apply to the Court as at present, permit an officer or agent of the Commission to enter premises at reasonable times to obtain information or documents required in connection with the IB; require that an applicant for registration or permit under BB and IB must notify the Commission if, whilst the application is being considered, material changes are made to the information provided with the application; make explicit the fact that it is an offence to allow a person to act contrary to a direction that restricts that person’s ability to be employed in the finance industry -presently the offence arises under the more general provision of ‘aiding and abetting’; modify the circumstances when the Commission may issue a public statement concerning unauthorised business, and also allow the Commission to take account of the interests of existing or potential investors in deciding whether or not to reduce the notice period before a public statement is issued.
3.4 Make other minor changes of a “housekeeping” nature, including –
3.4.1 changes to the definitions of terms relating to money laundering so that they align with the Money Laundering (Jersey) Order 2008, which had not been made when those terms were introduced to the Regulatory Laws;
3.4.2 rectify inadvertent omissions from the CIF that should have been included with changes in regulation that involved the introduction of granting certificates to unclassified funds;
3.4.3 rectify the omission for a statutory delay of four weeks (and longer if an appeal is lodged), in a direction taking effect which restricts a person’s ability to be employed in the finance industry, or requires a business to be wound up;
3.4.4 adding to the existing power for the States to make Regulations for establishing compensation schemes examples of the matters that such Regulations may cover;
3.4.5 providing that Orders, as well as Regulations, may include transitional, consequential, incidental or supplementary provisions.
4 RECOMMENDATION
4.1 It is recommended that the Minister for Economic Development approves the FR(MP) Law, signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for it to be lodged au Greffe by 29th July 2008, in order that it is debated by the States at the sitting commencing on 8th September 2008.
JAMES MEWS
Finance Industry Development Executive
25 July 2008
[1] International Organisation of Securities Commissions
[2] International Association of Insurance Supervisors International Association of Insurance Supervisors
International Organisation of Securities Commissions
It is recommended that the Minister for Economic Development approves the FR(MP) Law, signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for it to be lodged au Greffe by 29th July 2008, in order that it is debated by the States at the sitting commencing on 8th September 2008.
Make other minor changes of a “housekeeping” nature, including –
They will improve consistency across all the Regulatory Laws by: adding to the BB and IB provisions available in other laws for the Commission to apply to the Court for injunctions, and other orders; provide that the Commission may appoint an inspector under the IB, as under the other laws, instead of having to apply to the Court as at present, permit an officer or agent of the Commission to enter premises at reasonable times to obtain information or documents required in connection with the IB;require that an applicant for registration or permit under BB and IB must notify the Commission if, whilst the application is being considered, material changes are made to the information provided with the application; make explicit the fact that it is an offence to allow a person to act contrary to a direction that restricts that person’s ability to be employed in the finance industry -presently the offence arises under the more general provision of ‘aiding and abetting’; modify the circumstances when the Commission may issue a public statement concerning unauthorised business, and also allow the Commission to take account of the interests of existing or potential investors in deciding whether or not to reduce the notice period before a public statement is issued.
They will update the limited range of exceptions (so called “”), that allow for restricted information (information concerning the business or other affairs of any person obtained under or for the purposes of the Regulatory Laws), to be disclosed to another party without the prior approval of the person to whom the information relates. At the same time, the amendments will ensure that such exceptions are consistent across the four Regulatory Laws.
In summary the provisions will make a number of amendments to the regulatory laws.
The Law Officers Department have confirmed that there are no human rights issues and that the Minster may sign the statement of compatibility with human rights.
While there has not been time to consult on the final form of the draft law, a detailed presentation has been provided to Jersey Finance Limited so that it may invite comment from its members. The attention of the Data Protection Commissioner, who was consulted on the drafting instructions for the gateways to disclose restricted information, has also been drawn to the draft law.
Other issues included in the FR(MP) Law are either of a general housekeeping nature or were matters that arose during the preparation of the previous amending laws and which could not be resolved in the limited time available: such matters were therefore also covered by the consultation process last year.
These consistency changes were the subject of a consultation process that took place in 2007, along with the other amendments made last year: that consultation included a series of seminars held for the finance industry at which the proposals were described and discussion and comment was invited. Such comments as were received were generally supportive, and none was adverse.
. These are the standards that will be used during the IMF assessment in 2008. Time limitations prevented these matters being addressed at the same time as the amendments to the Regulatory Laws that were adopted by the States in November 2007 and which came into force earlier this year. and the IAIS. These are the standards that will be used during the IMF assessment in 2008. Time limitations prevented these matters being addressed at the same time as the amendments to the Regulatory Laws that were adopted by the States in November 2007 and which came into force earlier this year. The proposals dealing with questions of consistency between the Regulatory Laws (including the gateways), were among the matters that were identified during a self-assessment exercise, undertaken by the Commission, against international regulatory standards, including those issued by IOSCO and the IAIS. These are the standards that will be used during the IMF assessment in 2008. Time limitations prevented these matters being addressed at the same time as the amendments to the Regulatory Laws that were adopted by the States in November 2007 and which came into force earlier this year.
The amendments are considered to be a necessary part of the preparation for the IMF assessment of the Island’s finance industry, due to take place in October and November this year, in that they will implement international standards in the regulation of financial service businesses in Jersey, improve compatibility with the European Convention on Human Rights (“”); and make other minor changes.
It is recommended that the Minister for Economic Development approves the FR(MP) Law, signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for it to be lodged au Greffe by 29th July 2008, in order that it is debated by the States at the sitting commencing on 8th September 2008.
The Commission requests that, by means of the FR(MP) Law, amendments be made to the Collective Investment Funds (Jersey) Law 1988 (“”); the Banking Business (Jersey) Law 1991 (“”); the Insurance Business (Jersey) Law 1996 (“”); and the Financial Services (Jersey) Law 1998 (“) (together, the “”).
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