Banking Business (Amendment No. 6) (Jersey) Law 200-.

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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 (21/09/2007) regarding: Banking Business (Amendment No. 6) (Jersey) Law 200-.

Decision Reference: MD-E-2007-0181
Decision Summary Title:	Banking Business (Amendment No. 6) (Jersey) Law 200-		Date of Decision Summary:	20 September 2007
Decision Summary Author:	James Mews, Finance Industry Development Executive		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Banking Business (Amendment No. 6) (Jersey) Law 200-		Date of Written Report:	20 September 2007
Written Report Author:	James Mews, Finance Industry Development Executive		Written Report: Public or Exempt?	Public
Subject: Approval of the Banking Business (Amendment No.6) (Jersey) Law 200- (the “Amendment”)
Decision(s): The Minister approved the Amendment and requested that officers take such steps as are necessary to lodge the Amendment for debate by the States on 6 November 2007.
Reason(s) for Decision: The changes proposed are reasonable in order to introduce standard regulatory provisions: To implement international standards in the regulation of banking business in Jersey – in preparation for the IMF assessment in 2008. To improve compatibility with the European Convention on Human Rights To enhance the ability of the Commission to co-operate with supervising authorities in countries and territories outside Jersey. The proposals have been subject to consultation and no objections have been received from Jersey Finance Limited.
Resource Implications: No measurable cost or manpower implications arise for the Commission, the States or industry.
The Finance Industry Development Executive to undertake the necessary arrangements for the lodging of the Amendment and accompanying Report au Greffe by 24th September 2007 in order for the draft Law to be debated on 6th November 2007.
Signature:		Position: Minster for Economic Development
Date Signed:		Date of Decision:

Banking Business (Amendment No. 6) (Jersey) Law 200-.

MINISTER FOR ECONOMIC DEVELOPMENT

BANKING BUSINESS (AMENDMENT NO. 6) (JERSEY) LAW 200-

(“THE AMENDMENT”)

JERSEY FINANCIAL SERVICES COMMISSION (“THE COMMISSION”)

THE ISSUE

The Commission has requested amending the Banking Business (Jersey) Law 1991 (“the Law”) in order to –

implement international standards in the regulation of banking in Jersey in preparation for the IMF assessment in 2008;
improve compatibility with the European Convention on Human Rights (“ECHR”);
make other minor changes.

If this Amendment becomes Law there will be a further Order to be made to add additional details.

It is recommended that the Minister for Economic Development approves the Amendment and signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for this to be lodged au Greffe by 24th September 2007, in order that it is debated by the States on 6th November 2007.

THE PROPOSALS

In summary, the changes will:

Establish a power for the Commission to appoint an independent manager to manage part or all of the affairs of a registered person in prescribed circumstances;
Establish a power for the Commission to issue Codes of Practice and add related ancillary provisions;
Establish a power for the Commission to issue directions;
Introduce timescales for specific aspects of the appeals procedure in respect of a refusal to register, revocation of a registration, conditioning of a registration or objection to a person becoming a controller; and
Introduce provisions to better facilitate the transfer of deposit-taking business.
Require the Commission to refuse to register a shell bank and to revoke the registration of a bank that becomes a shell bank (there are no shell banks in the Island at present).
Expand the criteria for refusing an application for registration, or revoking a registration, to include offences by the registered person, or by an employee or associate, under any of a range of legislation, whether the offences occur in Jersey or elsewhere.
Require a registered person to publicise not merely the fact that it is registered but also such conditions attaching to a registration as the Commission may specify (typically any that limit the scope of its activities).
Extend the provisions that currently apply to directors, shareholder controllers, etc., so as to apply also to other Key Persons: to date, such persons have been subject to limited regulation on a voluntary basis.
Introduce a right of appeal against decisions of the Commission to issue public statements. This requires provisions such as a requirement for persons to be named in a public statement to be given notice of it, although the Commission will have the authority to decide to issue without prior notice where there is an over-riding need to protect the public or the Island’s reputation.
Make other minor changes, including a re-statement of appeal provisions; changes to the definition of the “court”; and a further revision of the definition of “relevant supervisory authority” to ensure consistency across all laws in enabling the Commission to co-operate with such bodies in other countries and territories.

BACKGROUND

The matters covered by paragraphs 2.1.1 – 2.1.5 above were originally included in a separate draft amending law that went through the normal consultation process. Those proposals were subsequently comprehensively discussed within an industry steering group chaired by Jersey Finance Limited, and no significant challenge was expressed. No comments were received from the general public and the steering group confirmed that it was satisfied with the draft Amendment.
Further, legal advice was received from Ogier which has addressed subsequent concerns raised by the Law Drafting Officer (the “LDO”) that the Commission could be exposed to financial claims for inappropriate use of the power to appoint a manager.
However, the advice recommended that, from a human rights point of view, an automatic right of appeal to the Court should be incorporated, rather than reliance placed on an assumed right of an aggrieved party to seek judicial review. This advice has been incorporated in the changes.
The proposals in paragraphs 2.1.6 – 2.1.10 inclusive and the minor changes all cover matters that were identified during a Commission self-assessment against the new methodology that will be used during the IMF assessment in 2008. These changes have been the subject of a separate consultation process.
The limited time available to draft the law precluded consultation being conducted on the draft legislation for the usual length of time, and the consultation had to be carried out during the holiday season of August. In order to ameliorate the limitations of this consultation, a Position Paper was published in June 2007 which described in some detail the nature of the proposed changes and the reasons for them. A series of seminars was then held for the finance industry at which the proposals were again described and discussion and comment was invited.
Neither the Position Paper nor the discussions elicited any adverse comment on the proposals. Only three submissions were received as a result of the consultation paper, all of them from banks: in general, the comments on the draft legislation were supportive, and none were adverse.

4 ISSUE AND RECOMMENDATION

4.1 It is recommended that the Minister for Economic Development approves the Amendment, signs the certificate of compatibility with the European Convention on Human Rights, and that the Finance Industry Development Executive takes the necessary steps for this to be lodged au Greffe by 24th September 2007, in order that it is debated by the States on 6th November 2007.

JAMES MEWS

Finance Industry Development Executive