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Banking Business (Accounts, Auditors and Reporting) (Jersey) Order 201-: Law drafting instructions

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A decision made 20 April 2015:

Ministerial decision reference    MD-C-2015-0044

Decision summary title   Law Drafting Instructions regarding financial reporting requirements of registered deposit takers

Decision summary author

Director, Finance Industry Development, Financial Services Unit

Is the decision summary public or exempt? 

Public

Report title   Law Drafting Instructions regarding financial reporting requirements of registered deposit takers

Report author or name of

person giving report

Director, Finance Industry Development, Financial Services Unit

Is the report public or exempt?

Qualified Exempt Article Number 35

Decision and reason for the decision

Proposed Banking Business (Accounts, Auditors and Reporting) (Jersey) Order 201-

The Chief Minister agreed to provide confirmation to the JFSC that he was content for the attached law drafting instructions to be passed by the JFSC to the Law Draftsman for action.

Secondary legislation is required that would establish requirements (1) for banks to produce audited accounts and submit prudential returns and (2) regarding the Commission’s approval of bank’s auditors.  The recommendations build on existing requirements with the following significant changes:

  • The (unutilised) provisions regarding the production of summary financial statements (instead of full sets) have been removed;
  • There is a new requirement to publish financial statements on relevant websites (previously only in Jersey offices); and
  • A “notification and no-objection” route is established re the appointment of banks’ auditors (previously no specific process).

The JFSC has consulted publicly on these proposals. The Auditor approval changes were outlined in consultation paper No. 1 of 2007 and were supported by respondents.

The accounts and prudential reporting proposals were outlined in consultation paper No 4 of 2010. This and the associated feedback paper are available from the JFSC’s website. There was widespread support for the changes.

WHY IS THIS LEGISLATION NEEDED?

There are a number of reasons why the JFSC is seeking to establish these requirements in secondary legislation:

  • To bring together existing requirements and establish a uniform legal basis for similar requirements;
  • To clarify existing requirements and apply uniform processes across sectors, which will benefit multi-licenced businesses and new businesses. As an example of the above, the declaration of compliance will now be required to be produced along with the accounts and be subject to auditor oversight, in line with the process applied to other financial services businesses (currently required at time of re-registration and unaudited);
  • Provide a clear framework for varying the legal requirements, where warranted; and
  • Provide the JFSC with the ability to charge a late filing fee where a financial services business is solely registered to conduct deposit- taking business and where submissions are late in order to encourage timely compliance.

 

 

 

WHAT EFFECT IS THE LEGISLATION TO HAVE?

In summary, the legislation would:

  • Establish a “no objections” approach re auditor approval;
  • Require banks to produce accounts and prudential returns and submit these to the Commission within specified timescales;
  • Require banks to submit the year-end return to their auditors, require auditors to produce reports on these and require these reports to be provided to the Commission;
  • Require banks to produce an audited declaration of compliance; and
  • Establish requirements relating to auditor communications with the Commission.

The initially separate work (on (1) auditor approval and (2) accounting and reporting) has been combined to make more efficient use of law drafting resources and has been agreed in principle in discussions with the LoD.

Resource implications

There are no financial or manpower costs for the States.

Action required

Provide confirmation to the JFSC that the Chief Minister is content for the law drafting instructions to be passed by the JFSC to the Law Draftsman for action.

Signature

 

 

 

 

 

Position

 

Senator I J Gorst

Chief Minister

 

 

 

 

 

Date signed

 

Effective date of the decision

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