Orders under Companies (Amendment No. 11) (Jersey) Law 2014

Information about the publication of Ministerial Decisions

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

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A decision made on 1 August 2014:

Decision Reference: MD-C-2014-0139
Decision Summary Title :	Orders under Companies (Amendment No. 11) (Jersey) Law 2014		Date of Decision Summary:	30th July 2014
Decision Summary Author:	Director, Finance Industry Development		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Orders under Companies (Amendment No. 11) (Jersey) Law 2014		Date of Written Report:	30th July 2014
Written Report Author:	Director, Finance Industry Development		Written Report : Public or Exempt?)	Public
Subject: Orders under the Companies (Amendment No. 11) (Jersey) Law 2014
Decision(s): The Minister made three draft Orders as a result of changes linked to Companies (Amendment No. 11) (Jersey) Law 2014 and directed that the Orders be laid before the States.
Reason(s) for Decision: The Companies (Jersey) Law 1991 has been amended by Companies (Amendment No. 11) (Jersey) Law 2014 which comes into force on Friday 1 August 2014. Three Orders have been prepared as part of these changes: Companies Uncertificated Securities (Amendment No 2) (Jersey) Order 201-, Companies (Exemptions) (Jersey) Order 201-, and Companies (Amendment) (Jersey) Order 201-. The Orders have been reviewed by a representative of the steering group, and the Jersey Financial Services Commission who agree with the policy proposed and encapsulated in the drafts.
Resource Implications: There are no resource implications as a result of this decision.
Action required: The Greffier of the States to be requested to arrange for the making of the Orders to be notified to the States at the earliest opportunity.
Signature:		Position: Chief Minister
Date Signed:		Date of Decision (If different from Date Signed):

Orders under Companies (Amendment No. 11) (Jersey) Law 2014

Report on Draft Companies (Amendment No. 11) (Jersey) Law 201-

Introduction and Recommendation

Three draft Orders have been prepared under the Companies (Jersey) Law 1991 (the “Principal Law”) namely the Companies Uncertificated Securities (Amendment No 2) (Jersey) Order 201-, Companies (Exemptions) (Jersey) Order 201-, and Companies (Amendment) (Jersey) Order 201- (the “Orders”). For the reasons set out in this paper, it is recommended that the Chief Minister signs a Decision Summary to signify his approval of the draft Orders, signs the Orders themselves and that the Orders are laid before the next sitting of the States.

Overview

Industry and the Jersey Financial Services Commission proposed changes to the Principal Law in order to confirm and strengthen the competitiveness and standing of the Jersey company, a vehicle used both for local business and as one of the key tools of the international finance industry. These changes set out in Companies (Amendment No. 11) (Jersey) Law 2014 (“Amendment No. 11”) have been registered in the Royal Court and come into force on 1 August 2014.

Three Orders have been prepared linked to these changes. These Orders have the support of industry, having been agreed in principle by the steering group and a representative has reviewed the Orders as well as the JFSC having no objection to the contents.

The provisions of the Orders

Companies Uncertificated Securities (Amendment No 2) (Jersey) Order 201- links into changes in Amendment No. 11 and would mean that in determining time periods relating to certain voting rights only working days are to be taken into account.

Companies (Exemptions) (Jersey) Order 201- (the “Exemptions Order”) relates to the changes to Article 74 of the Principal Law. The new provisions permit the members of a company to ratify or authorize a breach of a director’s duties under Article 74 by ordinary resolution (or such higher threshold as may be specified in the company’s articles of association).

An Order making power is also inserted so that this new process can be limited to appropriate types of company. Article 2 of the Exemptions Order ensures that this process will not be applicable to certain types of existing fund companies.

The Principal Law requires a company to appoint auditors to examine and report on its accounts if (a) it is a public company, (b) its articles so require, or (c) a resolution of the company in general meeting so requires. It was decided to draft amendments to Article 113 so as to relieve public companies of the audit requirement in certain circumstances such as when they are dormant fund companies. New Article 113 (1A) provides that for prescribed classes of company the audit requirement may be disapplied in respect of a financial period of the company by a resolution passed before the date by which it is required to prepare its accounts. Article 3 of the Exemptions Order permits a dormant fund company to disapply the audit requirement if there have been no investors in the fund.

Companies (Amendment) (Jersey) Order 201- amends the definition of a connected person so that it includes persons connected to the promotion or establishment of a fund and persons who act under their instructions.

Recommendation

For the reasons set out in this paper, it is recommended that the Chief Minister signs a Decision Summary to signify his agreement to the draft Orders, signs the Orders themselves and requests that the Orders are laid before the next sitting of the States.

Director, Finance Industry Development, Financial Services Unit

30 July 2014