Approval of Exemption for Liquidators under the Financial Services (Jersey) Law.

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A decision made (26/11/2006) regarding Approval of Exemption for Liquidators under the Financial Services (Jersey) Law.

Subject:	Approval of Exemption for Liquidators under the FS(J)L
Decision Reference:	MD-E-2006-0204		Exempt clause(s):
Type of Report: (oral or written)	Written		Person Giving Report (if oral):
Telephone or e-mail Meeting?			Report File ref:
Written report – Title	Financial Services (Trust Company Business (Exemptions)) (Jersey) Order 2006
Written report – Author (name and job title)	Paul de Gruchy, Director, Finance Industry Development
Decision(s): To approve the Financial Services (Trust Company Business (Exemptions)) (Jersey) Order 2006, with a view to the Order coming into force in accordance with its terms.
Reason(s) for decision: Currently, there is an unlimited exemption for all liquidators from the provisions of the Financial Services (Jersey) Law. The Order proposes changing this approach, so that while an unlimited exemption will remain for liquidators of other businesses, liquidators of financial services businesses will only have a limited exemption. Such liquidators would not be registered under the FS(J)L, but the Commission would retain investigative and enforcement powers in relation to the liquidators of FSBs. This will help to ensure that, in the event a liquidator is appointed to manage the affairs of an FSB, it performs its duties in an appropriate manner. The amendment is considered to be uncontroversial.
Action required: Minister to sign, date and seal the Order and the Director, Finance Industry Development to notify the Publications Editor States Greffe, the Departmental liaison officer, the Commission and the law draftsman before forwarding the Order to the Greffe for archiving.
Signature: Senator P.F.C. Ozouf (Minister)		Date of Decision: 26 November 2006

Approval of Exemption for Liquidators under the Financial Services (Jersey) Law.

MINISTER FOR ECONOMIC DEVELOPMENT

FINANCIAL SERVICES (TRUST COMPANY BUSINESS

(EXEMPTIONS)) (JERSEY) ORDER 2006

1 THE ISSUE

1.1 It is proposed to introduce the Financial Services (Trust Company Business (Exemptions)) (Jersey) Order 2006 (the “Order”).

1.2 It is recommended that the Minister sign, date and seal the Order and instruct the Director, Finance Industry Development to notify the States Greffe, the Departmental liaison officer, the Jersey Financial Services Commission and the law draftsman before forwarding the Order to the Greffe for archiving.

2 BACKGROUND

2.1 Liquidators currently enjoy an unlimited exemption from the provisions of the Financial Services (Jersey) Law. This exemption applies whether the liquidators provide services to an unregulated business or to a regulated financial services business.

2.2 The Commission believes that it is important that there be a form of regulatory grip over a financial services business throughout its life. If a liquidator is appointed to wind up the affairs of such a business, it is important that the Commission be able to hold the liquidator to account, not least because of the need to protect investors who are likely to be directly affected as a result of the liquidator’s actions.

2.3 The Order provides that an unlimited exemption from the provisions of the FS(J)L should continue to apply to liquidators of non-registered businesses. However, where a liquidator is appointed in respect of a registered financial services business, only a limited exemption will apply. This limited exemption would not require the liquidator to be registered with the Commission, but would grant the Commission investigation and enforcement powers in relation to the liquidator’s conduct in winding up the affairs of the financial services business.

2.4 Formal consultation has not taken place in relation to this Order, which is uncontroversial in nature. The Order does, however, introduce an important safeguard that will help to ensure that regulated businesses are wound up in an orderly and accountable manner.

3 RECOMMENDATION

3.1 It is recommended that the Minister sign, date and seal the Order and instruct the Director, Finance Industry Development to notify the Publications Editor States Greffe, the Departmental liaison officer, the Jersey Financial Services Commission and the law draftsman before forwarding the Order to the Greffe for archiving.

PAUL DE GRUCHY

Director, Finance Industry Development

22 November 2006

ANNEX