MINISTER FOR ECONOMIC DEVELOPMENT
Financial Services (Investment Business (Registration and Fees))
(Amendment No.2) (Jersey) Order 200- (the “Order”)
1. Introduction
1.1 The purpose of the Order (attached) is to increase the level of fees payable by regulated investment businesses to the Jersey Financial Services Commission (the “Commission”) under the Financial Services (Jersey) Law. Under the terms of the Financial Services (Jersey) Law, any change to the fee regime payable under that law must be made by Order by the Minister for Economic Development.
1.2 It is recommended that the Minister make the Order with a view to the Order coming into effect on 1 April 2006.
2. Discussion
2.1 Investment business primarily comprises businesses such as brokers, discretionary investment managers and investment advisors. The total fee payable to the Commission by the majority of these businesses is calculated as an application fee and then a registration fee comprised of two components: a fixed registration tariff and then a further amount payable according to the number of employees of the investment business. There is, in addition, a class of investment business that pays an application fee and a single registration fee calculated according to the number of financial structures in respect of relation to which it carries out investment business.
2.2 It is a stated policy of the Commission that the fees payable by each regulated sector of the finance industry should broadly reflect the cost of regulation of that sector. It is also the current policy of the Commission that fees are varied on a rolling cycle, so that each sector of the industry can expect its regulatory fees to be fixed for a period of three to four years. The level of proposed fee increases set out in the Order reflects these two principles.
2.3 Application fees in respect of investment businesses have not increased since 1999 (though the range of companies liable to pay the full fee did increase in 2003), and registration fees in respect of investment business fees have not increased since 1st April 2003.
2.4 It is proposed that application fees be the subject of a 20% rise overall, which represents an increase of less that 3% per annum since the last increase. It is also proposed that registration fees increase by 12.5% overall, an annual increase of approximately 3.9% since the previous prior increase.
2.5 The finance industry has been fully consulted on the proposed increase, and understands the reasons for the increases and does not object to the increases.
3. Recommendation
3.1 It is recommended that the Minister make the Order with a view to the Order coming into effect on 1 April 2006.
PAUL DE GRUCHY
Director, Finance Industry Development
1 March 2006