Amendments to Banking Business Law, and Insurance Business Regulations.

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A decision made (29/11/2006) regarding Banking Business (Amendment No.5) (Jersey) Law 200-, and Insurance Business (Amendment) (Jersey) Regulations 200-. Approval and recommendation that lodging period to expedited.

Subject:	Banking Business (Amendment No.5) (Jersey) Law 200- and Insurance Business (Amendment) (Jersey) Regulations 200- - approval and recommendation that lodging period to expedited
Decision Reference:	MD-E-2006-0208		Exempt clause(s):
Type of Report: (oral or written)	Written		Person Giving Report (if oral):	n/a
Telephone or e-mail Meeting?	n/a		Report File ref:
Written report – Title	BANKING BUSINESS (AMENDMENT NO. 5) (JERSEY) LAW 200- INSURANCE BUSINESS (AMENDMENT) (JERSEY) REGULATIONS 200-
Written report – Author (name and job title)	Paul de Gruchy, Director, Finance Industry Development
Decision(s): That the Minister approve the two pieces of legislation attached to this report and instruct the Director, Finance Industry Development to forward them to the Greffe for consideration by the States at the very earliest opportunity, preferably on 5 December 2006.
Reason(s) for decision: The two pieces of legislation are short and correct a minor error that has the effect of preventing the Commission from giving assistance to other regulators, contrary to the clear intention of the legislation. A request for such assistance is expected to be made shortly, and so it is vital that the pieces of legislation are brought into force as soon as possible.
Action required: Director, Finance Industry Development to lodge the Regulations at the Greffe and request that the Regulations and the Law Amendment be put to the States on 5 December 2006.
Signature: Senator P.F.C.Ozouf (Minister)		Date of Decision: 29 November 2006

Amendments to Banking Business Law, and Insurance Business Regulations.

MINISTER FOR ECONOMIC DEVELOPMENT

BANKING BUSINESS (AMENDMENT NO. 5) (JERSEY) LAW 200-

INSURANCE BUSINESS (AMENDMENT) (JERSEY) REGULATIONS 200-

1 THE ISSUE

1.1 It has come to light that there are two small but significant errors in the Banking Business (Jersey) Law and the Insurance Business (Jersey) Law. The draft legislation attached to this report will correct those errors. Given the circumstances explained further below, it is recommended that this legislation be presented to the States on an expedited basis.

1.2 It is recommended that the Minister approve the two pieces of legislation attached to this report and instruct the Director, Finance Industry Development to forward the Order to the Greffe for consideration by the States at the very earliest opportunity, preferably on 5 December 2006.

2 BACKGROUND

2.1 Under the Island’s regulatory laws, it is commonly provided that the Jersey Financial Services Commission may provide assistance to “relevant supervisory authorities”. Effectively, this means that regulators in a number of jurisdictions can provide each other with mutual assistance in the event that regulatory action is being taken against an entity that operates in more than one jurisdiction.

2.2 Both the Banking Business Law and the Insurance Business Law precede the creation of the Commission, and were drafted in the time when the functions of the Commission were carried out by civil servants. The definitions of “relevant supervisory authorities” in those laws therefore referred to bodies operating similar functions to “the Committee”. When the Commission was created the Committee’s responsibilities were – through legislation - assumed by the Commission. However, when Ministerial government was introduced, the reference to “Committee” was replaced with a reference to “Minister”. This was incorrect and had the effect of taking back from the Commission the powers that they had previously assumed by virtue of standing in the shoes of the Committee in those laws.

2.3 At present, therefore, the Commission is unable to give assistance under these two laws to regulatory bodies in other jurisdictions, for the simple reason that “relevant supervisory authority” is defined in terms of the functions of the Minister, rather than the Commission. The proposed changes will simply confirm the intended position, that a “relevant supervisory authority” should be a body discharging similar functions to those of the Commission.

2.4 This minor drafting error has significant implications in terms of whether the Commission can give cross-border assistance to bodies such as the Financial Services Authority or the Guernsey Financial Services Commission. In particular, it is anticipated that a request for assistance under the Insurance Law will be made by the FSA to the Commission early in December.

2.5 For this reason, it is suggested that the Regulations and the Amendment should both go to the States at the earliest possible opportunity, preferably on 5 December 2006. The Regulations will come into effect as soon as they are made. Although the Amendment will require Privy Council consent, the Attorney General has indicated that he thinks it possible that Privy Council would be prepared to give consent on an expedited basis in respect of the amendment.

2.6 Standing Order 26(7) enables the States to reduce the 6 week lodging period that ordinarily applies to Regulations "if they are of the opinion that the proposition relates to a matter of such urgency and importance that it would be prejudicial to Jersey to delay its debate". While this is a high threshold, we are currently faced with the likelihood that, within a fortnight, the Commission will be unable to offer assistance to a fellow regulator due to a minor oversight in the drafting of the Insurance Law. As the proposed pieces of legislation are both entirely uncontroversial, it seems sensible to make the changes as soon as possible so to ensure that Jersey can be a “good neighbour” in this important area.

3 RECOMMENDATION

3.1 It is recommended that the Minister approve the two pieces of legislation attached to this report and instruct the Director, Finance Industry Development to forward the Order to the Greffe for consideration by the States at the very earliest opportunity, preferably on 5 December 2006.

PAUL DE GRUCHY

Director, Finance Industry Development

27 November 2006

ANNEX