Proceeds of Crime (Supervisory Bodies) (Amendment of Law) (Jersey) Regulations 200-

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A decision made (25.07.08) to approve the Proceeds of Crime (Supervisory Bodies) (Amendment of Law) (Jersey) Regulations 200-

Decision Reference: MD-E-2008-0150
Decision Summary Title :	Proceeds Of Crime (Supervisory Bodies) (Amendment Of Law) (Jersey) Regulations 200-		Date of Decision Summary:	25 July 2008
Decision Summary Author:	James Mews Finance Industry Development		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	Proceeds Of Crime (Supervisory Bodies) (Amendment Of Law) (Jersey) Regulations 200-		Date of Written Report:	25 July 2008
Written Report Author:	James Mews Finance Industry Development		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Approval of Proceeds Of Crime (Supervisory Bodies) (Amendment Of Law) (Jersey) Regulations 200- (the “Regulations”)
Decision(s): The Minister approved the draft Regulations, the attached report and for the documents to be lodged au Greffe by 28 July 2008 so as to be debated by the States on 8 September 2008.
Reason(s) for Decision: The amendments are considered to be a necessary part of the preparation for the IMF assessment of the Island’s finance industry, due to take place in October this year. The effect of these changes is that the Commission may supervise - through the Supervisory Bodies Law - compliance by all relevant types of fund products with the Money Laundering (Jersey) Order 2008.
Resource Implications: There are no measurable financial or manpower costs for the States.
Action required: To approve the draft Regulations and the attached report and for the documents to be lodged au Greffe by 28 July 2008 so as to be debated by the States on 8 September 2008.
Signature: Senator P.F.C.Ozouf		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Proceeds of Crime (Supervisory Bodies) (Amendment of Law) (Jersey) Regulations 200-

MINISTER FOR ECONOMIC DEVELOPMENT

PROCEEDS OF CRIME (SUPERVISORY BODIES) (AMENDMENT OF LAW) (JERSEY) REGULATIONS 200- (“SB REGULATIONS”)

JERSEY FINANCIAL SERVICES COMMISSION (“THE COMMISSION”)

1 THE ISSUE AND RECOMMENDATION

1.1 The Commission requests that, by means of the SB Regulations, two definitions in, and the Schedule to, the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 200- (“Supervisory Bodies Law”) are amended.

1.2 The amendments are considered to be a necessary part of the preparation for the IMF assessment of the Island’s finance industry, due to take place in October this year.

1.3 It is recommended that the Minister for Economic Development approves the SB Regulations, and that the Finance Industry Development Executive takes the necessary steps for this to be lodged au Greffe by 28th July 2008, in order that it is debated by the States during the week commencing 8th September 2008.

2 THE PROPOSALS

2.1 In summary, the changes will -

2.1.1 Amend the Schedule to set out the circumstances in which a fund that is an unregulated fund, or which is a “COBO only” fund, must register under the Law.

2.1.2 Amend the definition of “regulated business” to include the business of a recognized fund and the business of an unclassified fund.

2.1.3 Amend the definition of “regulated person” to include the business of schemes or arrangements that are unregulated funds and “COBO only” funds.

2.2 The effect of these changes is that the Commission may supervise - through the Supervisory Bodies Law - compliance by all types of fund products with the Money Laundering (Jersey) Order 2008, and that registration of fund products under the Supervisory Bodies Law is limited to unregulated funds and “COBO only” funds - and then only where, in the case of a trust, its trustee, and in the case of a limited partnership, its general partner, is not registered under the Financial Services (Jersey) Law 1998 (“Financial Services Law”) to carry on fund services business.

2.3 Registration is so limited because the fitness and properness of the trustee and the general partner will have been considered under the Financial Services Law. Note that there is no requirement for a fund that is a recognized fund or unclassified fund to register under the Supervisory Bodies Law, as it will be required to hold a permit or certificate, as appropriate, under the Collective Investment Funds (Jersey) Law 1988.

3 CONSULTATION

3.1 Whilst owing to time constraints it has not been possible to undertake consultation on the final form of the SB Regulations, the policy underlying the SB Regulations has been agreed by the Island’s AML/CFT Strategy Group and also discussed by the Commission’s AML/CFT Steering Group. The SB Regulations have also been discussed with Jersey Finance Limited so that it may invite comment from its members.

4 RECOMMENDATION

4.1 It is recommended that the Minister for Economic Development approves the SB Regulations, and that the Finance Industry Development Executive takes the necessary steps for this to be lodged au Greffe by 28th July 2008, in order that it is debated by the States during the week commencing 8th September 2008.

JAMES MEWS

Finance Industry Development Executive

25 July 2008

It is recommended that the Minister for Economic Development approves the SB Regulations, and that the Finance Industry Development Executive takes the necessary steps for this to be lodged au Greffe by 28th July 2008, in order that it is debated by the States during the week commencing 8th September 2008.

Whilst owing to time constraints it has not been possible to undertake consultation on the final form of the SB Regulations, the policy underlying the SB Regulations has been agreed by the Island’s AML/CFT Strategy Group and also discussed by the Commission’s AML/CFT Steering Group. The SB Regulations have also been discussed with Jersey Finance Limited so that it may invite comment from its members.

Registration is so limited because the fitness and properness of the trustee and the general partner will have been considered under the Financial Services Law. Note that there is no requirement for a fund that is a recognized fund or unclassified fund to register under the Supervisory Bodies Law, as it will be required to hold a permit or certificate, as appropriate, under the Collective Investment Funds (Jersey) Law 1988.

The effect of these changes is that the Commission may supervise - through the Supervisory Bodies Law - compliance by all types of fund products with the Money Laundering (Jersey) Order 2008, and that registration of fund products under the Supervisory Bodies Law is limited to unregulated funds and “COBO only” funds - and then only where, in the case of a trust, its trustee, and in the case of a limited partnership, its general partner, is not registered under the Financial Services (Jersey) Law 1998 (“”) to carry on fund services business.

In summary, the changes will -

The amendments are considered to be a necessary part of the preparation for the IMF assessment of the Island’s finance industry, due to take place in October this year.

The Commission requests that, by means of the SB Regulations, two definitions in, and the Schedule to, the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 200- (“”) are amended.