FINANCIAL SERVICES COMMISSION (AMENDMENT OF LAW) (JERSEY) REGULATIONS 201-
(the “Regulations”)
Report
The Regulations propose amendments to the provisions relating to the terms and conditions of appointment of Commissioners of the Financial Services Commission (the “Commission”), which are contained in the Schedule (the “Schedule”) to the Financial Services Commission (Jersey) Law 1998 (the “Law”).
The primary purposes of the amendments are –
- to extend the maximum period for which a Commissioner may be appointed from 3 years to 5 years; and
- to require the Minister for Economic Development to report to the States on any use of the power to terminate the appointment of a Commissioner, with that report providing only limited reasons for the decision, whilst giving the full reasons to the person concerned.
The opportunity is also being taken to make a small correction to remove an obsolete reference in the Schedule to Article 3 of the 1998 Law to the Finance and Economics Committee.
Maximum period of appointment
Since the Law came into force, the Jersey Appointments Commission (the “JAC”) has been established and, by mutual consent, oversees the selection for appointment of Commissioners, the Chairman and the Deputy Chairman. The code of practice published by the JAC in July 2006 recommends that, for appointments such as that of a Commissioner of the Commission, the total period in office should not normally exceed 10 years. The code of practice also recommends that a second and subsequent re-appointment should normally be subject to open competition.
At present, the maximum period of appointment of a Commissioner is 3 years. As a result, the practical consequence of following the recommendations of the JAC code of practice is that a Commissioner is unlikely to be in post for more than 6 years. This is considered to be too short a period for a person to accumulate experience in the specialist work of the Commission, to function most effectively and for there to be the necessary continuity in the Board.
The proposal to extend the maximum period of any appointment to 5 years would allow, with one re-appointment, a total time in office of 10 years. This is consistent with the provision for equivalent appointments to the Jersey Competition Regulatory Authority and to the Board to administer the Depositor Compensation Scheme.
Associated with this proposed amendment is a new provision that will enable the States to extend the appointment of anyone appointed for less than the maximum period, providing that maximum is not exceeded.
Termination of appointment.
One of the recommendations of the International Monetary Fund (“IMF”) after its assessment in 2008 was that the reasons for terminating the appointment of a Commissioner should be made public. The Schedule provides for the Minister to terminate an appointment on any of the grounds specified.
In certain circumstances, full disclosure of the detailed reasons for terminating a person’s appointment could cause unnecessary and unwarranted embarrassment to the person concerned. Therefore, the amendment proposed is for public disclosure to be by means of a report made to the States, with the reasons being limited to a reference to the relevant clause that provides the grounds for the decision; and for the full reasons to be given only to the person concerned.
European Convention on Human Rights and Data Protection
Although there is no formal requirement for a declaration to be made regarding compliance of the Regulations with the European Convention on Human Rights, it was considered advisable to seek the opinion of the Law Officers on this issue. The advice received confirmed that the proposed new provisions regarding termination of a Commissioner do engage rights under the Convention (particularly Article 8 – respect for private and family life), however, in the particular case, the limited interference can properly be justified.
The Data Protection Commissioner has also been consulted and has confirmed that the proposed amendments would be in accordance with the principles set out in the Data Protection (Jersey) Law 2005.
Financial and Manpower Implications
There are no financial or manpower implications for the States, the Commission or for the financial services industry in Jersey.
Director
Financial Services Development
20 May 2011