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Jersey Financial Services Commission: Fee Levying Powers and Removal of Unnecessary Licensing Provisions: Law drafting instructions

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A decision made 13 November 2015:

Ministerial decision reference    MD-C-2015-0121

Decision summary title   Law drafting instructions to make consistent the JFSC’s fee-levying powers and to remove certain unnecessary licensing provisions

Decision summary author

Director, Finance Industry Development, Financial Services Unit

Is the decision summary public or exempt? 

Public

Report title   Law drafting instructions

Report author or name of

person giving report

Director, Finance Industry Development, Financial Services Unit

 

Is the report public or exempt?

Public

Decision and reason for the decision

The Assistant Chief Minister acting under delegated powers from the Chief Minister approved the commencement of law drafting as set out in the law drafting instructions.  The legislative amendments requested serve two purposes. Firstly, to make the JFSC’s fee-levying provisions consistent and, secondly, to remove certain unnecessary administrative provisions relating to the renewal of regulatory licences.

 

Making the JFSC’s fee-levying provisions consistent

 

The JFSC has been granted the statutory power under Article 15 of the Financial Services Commission (Jersey) Law 1998 (and under provisions in each of the regulatory laws that the JFSC administers) to require regulated businesses to pay fees.   Following a review of the existing statutory provisions, the need for a number of amendments have been identified to make the fee-levying provisions consistent across the regulatory laws and ensure that each regulatory law (where it does not do so already) gives the JFSC the flexibility to:

 

  • charge periodic fees (such as an annual licence fee); and
  • charge discrete fees (i.e. requiring the payment of a fee for the JFSC’s carrying out of a specific requested activity).

 

The law drafting instructions relate to changes to the enabling powers only. Before the JFSC could set any new or revised fees under the proposed amended provisions it would need to follow the prescribed consultation process set out in the Financial Services Commission (Jersey) Law 1998. That law also provides for an arbitration mechanism (involving a panel of Jurats) should the JFSC be unable to reach agreement on the proposed fees with a body that is representative of those who would be required to pay them.

 

Removing unnecessary administrative provisions

 

Under all of the regulatory laws that the JFSC administers, except the Banking Business and Insurance Business laws, once a business has been granted a licence it remains valid until such time as it is revoked by the JFSC.  However, under the Banking Law, every registration (licence) expires on 31st January of each year. This means that every bank has to have its registration renewed annually. This results in unnecessary administrative work for both the JFSC and banks. A similar situation exists under the Insurance Business Law.

 

These licence renewal provisions are unnecessary and are to be removed.

 

Resource implications

There are no resource implications for the States of Jersey. 

Action required

The Director, Finance Industry Development, Financial Services Unit to request the Law Draftsman to draft changes as set out in the law drafting instructions to be submitted by the JFSC to the Law Draftsman.

 

Signature

 

 

 

 

 

Position

 

Senator P F C Ozouf

Assistant Chief Minister

 

 

 

 

 

Date signed

Effective date of the decision

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Jersey Financial Services Commission: Fee Levying Powers and Removal of Unnecessary Licensing Provisions: Law drafting instructions

LAW DRAFTING INSTRUCTIONS

AMENDMENTS TO THE COMMISSION’S FEE-LEVYING POWERS

 

 

 

LAW DRAFTING INSTRUCTIONS

 

IN THE MATTER OF -

AMENDMENTS TO MAKE THE COMMISSION’S FEE-LEVYING POWERS CONSISTENT AND TO REMOVE CERTAIN UNNECESSARY LICENSING PROVISIONS

 

THE INSTRUCTIONS COMPRISE AMENDMENTS TO –

Banking Business (Jersey) Law 1991

Collective Investment Funds (Jersey) Law 1988

Control of Borrowing (Jersey) Order 1958

Financial Services (Jersey) Law 1998

Insurance Business (Jersey) Law 1996

Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008

 

Date: 22 October 2015

 

 

Drafting Instructions prepared by:

 Stephen de Gruchy (Policy and Strategy Division)    

Tel:  01534 822110

Email:  s.degruchy@jerseyfsc.org

 

 

Whilst further instructions may be provided by the JFSC on the matter during drafting without the requirement for further Ministerial Decision or confirmation of such instructions by CMD, all correspondence on the matter during drafting must be copied to James Mews in Financial Services, CMD who reserve the right to provide further input if necessary


GLOSSARY OF TERMS

 

 

It is not intended that the meanings given below should necessarily be, or become, formal definitions: they are provided only to assist in simplifying these instructions and in making them clear.

 

 

BBJL

Banking Business (Jersey) Law 1991

CIFJL

Collective Investment Funds (Jersey) Law 1988

COBO

Control of Borrowing (Jersey) Order 1958

Commission Law

Financial Services Commission (Jersey) Law 1998

FSJL

Financial Services (Jersey) Law 1998

IBJL

Insurance Business (Jersey) Law 1996

SBJL

Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008

licence

Means:

  • a registration granted in accordance with Article 9 of the BBJL;
  • a permit granted in accordance with Article 7 of the CIFJL;
  • a certificate granted in accordance with Article 8B of the CIFJL;
  • a consent granted under COBO;
  • a registration granted in accordance with Article 9 of the FSJL;
  • a permit granted in accordance with Article 7 of the IBJL;  and
  • a registration granted under Articles 14 or 15 of SBJL or a ‘deemed registration’ as defined in Article 1 of the SBJL.

registered person

A person to whom a licence has been granted.

regulatory laws

the collective name for the BBJL; the CIFJL; the COBO; the FSJL; the IBJL; and the SBJL.

  

Page 1 of 10



LAW DRAFTING INSTRUCTIONS

AMENDMENTS TO THE COMMISSION’S FEE-LEVYING POWERS

1                INTRODUCTION

1.1          The purposes of these instructions are to:

1.1.1              make consistent the statutory powers in the regulatory laws that provide for the Commission to levy fees and to widen the scope of the fee-levying provisions in certain cases; and

1.1.2              to remove certain unnecessary administrative provisions in the BBJL and the IBJL that require the Commission to renew, annually, registrations and permits (as applicable) granted under those laws .

1.2          It is important to note that the widening of the Commission’s fee-levying powers referred to in paragraph 1.1.1 are changes to the enabling powers only. Before the Commission could set any new or revised fees under those provisions it would need to follow the prescribed consultation process set out in Article 15 of the Commission Law. That Article also provides for an arbitration mechanism (involving a panel of Jurats) should the Commission be unable to reach agreement on the proposed fees with a body that is representative of those who would be required to pay them. [1]

 

 


2                MAKING CONSISTENT THE COMMISSION’S FEE-LEVYING POWERS

Background

2.1          The Commission has been granted the statutory power under Article 15 of the Commission Law and under provisions in each of the regulatory laws to require registered persons to pay fees that have been formally published by the Commission in line with a prescribed process.

2.2          The current fee notices published by the Commission can be viewed on the Commission’s website at:

 http://www.jerseyfsc.org/the_commission/fees_notices/index.asp.

2.3          Following a review of the existing statutory provisions, the need for a number of amendments have been identified to make the fee-levying provisions consistent across the regulatory laws and ensure that each regulatory law (where it does not do so already) gives the Commission the flexibility to:

2.3.1              charge periodic fees (such as an annual licence fee); and

2.3.2              charge discrete fees (i.e. requiring the payment of a fee for the Commission’s carrying out of a specific requested activity, such as evaluating an application for the appointment of a person as a director of a registered person).

2.4          For ease of reference, the Appendix shows the existing provisions in each of the regulatory laws that provide for fees to be levied by the Commission.

2.5          To address the matters referred to in paragraph 2.3, it is proposed that the BBJL, the COBO, the FSJL, the IBJL and the SBJL are amended to adopt a provision that is the same, mutatis mutandis, as that currently in Article 7(12) of the CIF Law, which provides that, “The Commission may, in accordance with Article 15 of the Financial Services Commission (Jersey) Law 1998, publish fees that shall be payable by the holders of permits at such intervals and upon the occurrence of such events as the Commission may determine.”


Drafting Instructions

2.6          Please insert into the BBJL a provision that is the same as in Article 7(12) of the CIF Law, save that the reference to “holders of permits” needs to read “registered persons”.

2.7          Please insert into the COBO a provision that is the same as in Article 7(12) of the CIF Law, save that the reference to “holders of permits” needs to refer to “the holder of a consent”[2].

2.8          Please replace Article 9(6) of the FSJL with a provision that is the same as in Article 7(12) of the CIF Law, save that the reference to “holders of permits” needs to read “registered persons”.

2.9          Please insert into the IBJL a provision that is the same as in Article 7(12) of the CIF Law, save that the reference to “holders of permits” needs to read “permit holders”. (Note: please see paragraph 3.3 and the associated footnote 3 on page 8.)

2.10      Please replace Article 20(1) of the SBJL with a provision that is the same as in Article 7(12) of the CIF Law, save that:

2.10.1          the reference to “the Commission” needs to read “A supervisory body”;

2.10.2          the reference to “Article 15 of the Commission Law” needs to read “Article 21 [of the SBJL]”; and

2.10.3          the reference to “holders of permits” needs to read “each person registered by it under this Law”.

2.11      Please replace Article 20(2) of the SBJL with a provision that is the same as in Article 7(12) of the CIF Law, save that:

2.11.1          the reference to “holders of permits” needs to read “each deemed registered person and each regulated person”; and

2.11.2          the reference to “Article 15 of the Commission Law” needs to read “Article 21 [of the SBJL]”.

2.12      Please amend Article 21(1)(c) of the SBJL so that its scope covers the proposed wider fee-levying provisions of Article 20(1) and 20(2) of the SBJL referred to in paragraphs 2.10 and 2.11. (This could be achieved by simply replacing, “An annual fee under Article 20 ...” in Article 21(1)(c) with, “A fee under Article 20 …”.)

2.13      On the assumption that the above amendments will be effected by means of one amending law, please draft the law to come into force one month after registration.

 


3                BBJL AND IBJL: REMOVAL OF UNNECESSARY PROVISIONS RELATING TO THE RENEWAL OF PERMITS

Background

3.1          Under all of the regulatory laws, except the BBJL and the IBJL, once a person has been granted a licence it remains valid until such time as it is revoked by the Commission.

3.2          However, under Article 9(2) of the BBJL, every registration granted under that law expires on 31st January each year. This means that every bank registered under the BBJL has to have its registration renewed annually. This results in unnecessary administrative work for both the Commission and banks. Instead, a registration should remain valid until such time as the Commission revokes it.

3.1          Similarly, Article 6(2) of the IBJL requires permits granted under that law to be renewed annually. Again, this results in unnecessary administrative work for both the Commission and insurance companies. Instead, permits should remain valid until such time as the Commission revokes them.

Drafting Instructions

3.2          Please delete Article 9(2) of the BBJL.

3.3          Please delete Article 6(2) of the IBJL[3] and the connected Article 3 of the Insurance Business (General Provisions) (Jersey) Order 1996.

3.4          As far as an effective date for the amending legislation goes, we will work on the assumption that the above amendments will be effected through the same piece of legislation referred to in paragraph 2.13 and will come into force one month after the amending law is registered.

 

  

Page 1 of 10


LAW DRAFTING INSTRUCTIONS

AMENDMENTS TO THE COMMISSION’S FEE-LEVYING POWERS

APPENDIX

Law

Application fees

Other fees

 

 

Alternative Investment Funds (Jersey) Regulations 2012

 

 

Regulation 8(2)(e)

 

“An application for a certificate shall –

 …..

(e)     be accompanied by such fee as may be published by the Commission in accordance with Article 15 of the Financial Services Commission (Jersey) Law 1998.”

 

 

Regulation 9(13)

 

“The Commission may, in accordance with Article 15 of the Financial Services Commission (Jersey) Law 1998, publish fees that shall be payable by the holders of certificates at such intervals and upon the occurrence of such events as the Commission may determine.”

 

Banking Business (Jersey) Law 1991

Article 9(1)

 

“Subject to the provisions of this Law, on application by any person in the prescribed manner and on payment of the fee published by the Commission in accordance with Article 15(5) of the Financial Services Commission (Jersey) Law 1998, the Commission shall register the person.”

 

(No provision.)

Control of Borrowing (Jersey) Order 1958

Article 12A

 

“A person who applies to the Commission for the grant of a consent under this Order shall pay such fees as are published by the Commission in accordance with Article 15(5) of the Financial Services Commission (Jersey) Law 1998.”

 

(No provision.)

Collective Investment Funds (Jersey) Law 1988

Article 6

 

“Application for permit

(1)    An application for a permit shall –

 …

(f)     be accompanied by such fee as may be published by the Commission in accordance with Article 15(5) of the Financial Services Commission (Jersey) Law 1998.”

 

 

Article 8A(2)(e)

 

“An application for a certificate shall –

…….

(e)     be accompanied by such fee as may be published by the Commission in accordance with Article 15 of the Financial Services Commission (Jersey) Law 1998.”

 

Article 7(12)

 

“The Commission may, in accordance with Article 15 of the Financial Services Commission (Jersey) Law 1998, publish fees that shall be payable by the holders of permits at such intervals and upon the occurrence of such events as the Commission may determine.”

 

 

Article 8B(13)

 

“The Commission may, in accordance with Article 15 of the Financial Services Commission (Jersey) Law 1998, publish fees that shall be payable by the holders of certificates at such intervals and upon the occurrence of such events as the Commission may determine.”


Financial Services (Jersey) Law 1998

Article 8(3)(e)

 

An application under paragraph (1) [for registration] shall –

…..

(c)     be accompanied by such fees as may be published by the Commission in accordance with Article 15(5) of the Financial Services Commission (Jersey) Law 1998.”

Article 9(6)

 

“The Commission may publish, in accordance with Article 15(5) of the Financial Services Commission (Jersey) Law 1998, fees to be paid by a registered person, and the intervals at which such fees are to be paid.”

Insurance Business (Jersey) Law 1991

Article 6(1)(e)

 

“An application for a Category A or Category B permit shall –

…..

(d)     be accompanied by the fee published by the Commission in accordance with Article 15(5) of the Financial Services Commission (Jersey) Law 1998.”

 

Article 6(2)

 

“Permits shall be renewed annually on such date as the Minister may prescribe, by payment by the permit holder to the Commission of such fee as may be published by the Commission in accordance with Article 15(5) of the Financial Services Commission (Jersey) Law 1998.”

 

Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008

Article 11(8)

 

“A notification under paragraph (6) shall be accompanied by a fee determined in accordance with Article 21.”

 

Article 13(1)(c)

 

“An application for a level 1 registration shall –

 …..

(c)     be accompanied by the fee for the application, determined in accordance with Article 21.”

 

Article 15(1)(c)

 

“An application for a level 2 registration shall –

…..

(c)     be accompanied by the fee for the application, determined in accordance with Article 21.”

 

 

Article 21 [partial extract]

 

“(1)    The fee for each of the following shall be the fee for the time being published and in effect in accordance with this Article –

(a)     notification under Article 11(6);

(b)     an application under Article 13 or Article 15;

(c)     an annual fee under Article 20.”

 

Article 20(1)

 

“A supervisory body may charge an annual fee payable by each person registered by it under this Law.”

 

Article 20(2)

 

“The Commission may charge an annual fee payable by each deemed registered person and each regulated person.”

 

 

  

Page 1 of 10

[1] In the case of fees under the SBJL, the consultation and arbitration process set out in Article 21 of that law applies rather than Article 15 of the Commission Law.

 

[2] The suggested use of “holder of a consent” is based on the language used in Article 2(5) of the Control of Borrowing (Jersey) Law 1947.

 

[3] The present fee-levying provision in Article 6(2) of the IBJL would be replaced by the new provision referred to in paragraph 2.9.

 

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