Security Interests (Amendment of Law) (No. 2) (Jersey) Regulations 201-

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

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

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 14 August 2013:

Decision Reference: MD-C-2013-0094

Decision Summary Title :

Security Interests (Amendment of Law) (No.2) (Jersey) Regulations 201-

Date of Decision Summary:

13 August 2013

Decision Summary Author:

Officer,

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:

N/A

Written Report

Title :

Security Interests (Amendment of Law) (No.2) (Jersey) Regulations 201-

Date of Written Report:

13 August 2013

Written Report Author:

Officer,

Finance Industry Development

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Approval of the draft Security Interests (Amendment of Law) (No.2) (Jersey) Regulations 201- for lodging.

Decision(s):

The Minister approved the Security Interests (Amendment of Law) (No.2) (Jersey) Regulations 201- for lodging and directed that the documents should be lodged au Greffe for debate by the States at the earliest opportunity.

Reason(s) for Decision:

These Regulations make amendments to the Security Interests (Jersey) Law 2012 (“the Law”). These Regulations are made under Article 93 and 95 of the Law and make minor amendments to the definition of ‘continuing security interest’ under the Law and how various transitional provisions will operate. It is deemed necessary for these amendments to be made before the Law comes into force.

Resource Implications:

There are no resource implications as a result of this decision.

Action required:

That the documents be lodged au Greffe for debate by the States at the earliest opportunity.

Signature:

Senator Ian Joseph Gorst

Position:

Chief Minister of Jersey

Date Signed:

Date of Decision (If different from Date Signed):

Security Interests (Amendment of Law) (No. 2) (Jersey) Regulations 201-

CHIEF MINISTER

Report to the Draft Security Interests (Amendment of Law) (No.2) (Jersey) Regulations 201-

Background and Recommendation

The Security Interests (Jersey) Law 2012 (“the Law”), which replaces the existing law governing security interests in intangible movable property, was adopted by the States on 19 July 2011, received Royal Assent on 10 July 2012 and was registered by the Royal Court on 27 July 2012. The Security Interests (Amendment of Law) (Jersey) Regulations 2013, which amend the Law, were approved by the States on 16 July 2013. The Law is due to come into force in a two stage process on 1 October 2013 and 2 January 2014.

The Draft Security Interests (Amendment of Law) (No.2) (Jersey) Regulations 201- (“the draft Regulations”) amend the manner in which transitional provisions and clauses in relation to further advances will operate under the Security Interests (Jersey) Law 2013.

It is recommended that the Minister approve the draft Regulations (including the report attached to it) and sign the Decision Summary. It is further recommended that the Minister should direct that the documents should be lodged au Greffe for debate by the States at the earliest opportunity.

Development and Consultation

During preparation for the Law coming into force, matters were raised with Government regarding the operation of the transitional provisions for previous Security Interests entered into under the Security Interests (Jersey) Law 1983 (the “1983 Law”) and particularly the applicability of those provisions to ‘after acquired property’ under a security agreement (i.e. property acquired by a lender after a security agreement has been entered into).

A further provision was also identified for an amendment which deals with ‘further advances’ under the Law. These provisions are commonly used in security agreements to allow for further lending to occur over the same security that was initially subject to lending. An amendment was proposed to this Article that clarifies the provisions in relation to further advances and removes any inference that a security interest agreement must contain particulars of the further advances secured by it. This allows for advances that were not contemplated at the time of the initial advance to be included within the definition of “further advance”.

Through consultation with a number of banking lawyers on the working group and the Government adviser, Professor Sir Roy Goode QC, it was identified that both of these amendments were required to ensure that both the transitional provisions and clauses in relation to further advances were clear when the Law comes into force.

Scrutiny

This legislation will be referred to the Economic Affairs scrutiny panel for their consideration during the lodging period before debate.

The Draft Regulations

Regulation 2 amends the definition of “continuing security interest” in Article 1 of the Law. The effect of the amendment deals with the matters concerning transitional provisions for previous Security Interests entered into under the 1983 Law and particularly the applicability of those provisions to ‘after acquired property’ under a security agreement.

Regulation 3 amends Article 33 of the Law so as to substitute the definition “further advance”. The definition is revised to remove any inference that a security interest agreement must contain particulars of the further amounts secured by it. This allows for advances that were not contemplated at the time of the initial advance to be included within the definition of further advance.

Regulation 4 makes a minor amendment to a cross reference in Schedule 1 to the Law, in consequence of the definition “continuing security interest” being moved to Article 1 of that Law.

Regulation 5 makes a minor amendment to Schedule 2 to the Law, which deals with transitional provisions for previous Security Interests entered into under the 1983 Law and is consequential to the amendment of the definition of “continuing security interest”.

Regulation 6 provides for these Regulations to come into force on the same day as Article 93 of the Law.

Financial and manpower implications

There are no financial or manpower implications for the States of Jersey arising from the adoption of the draft Regulations.

Recommendation

It is recommended that the Minister approve the draft Regulations (including the report attached to it) and sign the Decision Summary. It is further recommended that the Minister should direct that the documents should be lodged au Greffe for debate by the States at the earliest oppertunity.

Officer, Finance Industry Development

13 August 2013