Banking Business (Amendment No. 7) (Jersey) Law 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While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.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 21 January 2011 regarding: Banking Business (Amendment No. 7) (Jersey) Law 201- - Lodging of Draft Law.

Decision Reference: MD-E-2011-0011
Decision Summary Title:	Amendments to the Banking Business (Jersey) Law 1991		Date of Decision Summary:	14 January 2011
Decision Summary Author:	Director, Finance Industry Development		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Draft Banking Business (Amendment No. 7) (Jersey) Law 201-		Date of Written Report:	14 January 2011
Written Report Author:	Director, Finance Industry Development		Written Report : Public or Exempt?	Public
Subject: Banking Business (Amendment No. 7) (Jersey) Law 201- (the “Draft Law”)
Decision(s): The Minister agreed to lodge the Draft Law and attached report, and signed the declaration of compatibility with the European Convention on Human Rights. The Minister directed that the documents be lodged au Greffe so as to allow the Draft Law to be debated by the States at the earliest opportunity.
Reason(s) for Decision: To amend a definition that makes an out-of-date reference to another law. To introduce a power to enable the Minister to make Orders in relation to accounting and audit of persons registered under the Banking Business (Jersey) Law 1991, by substitution of existing provisions relating to auditors of such registered persons.
Resource Implications: The Draft Law will not have any effect on the financial or manpower resources of the States of Jersey
Action required: To approve the Draft Law and the attached report; to sign the statement of compatibility with the European Convention on Human Rights; and for the documents to be lodged au Greffe so as to allow the Draft Law to be debated by the States at the earliest opportunity.
Signature:		Position: Minister for Economic Development
Date Signed:		Date of Decision:

Banking Business (Amendment No. 7) (Jersey) Law 201- - Lodging of Draft Law

BANKING BUSINESS (AMENDMENT No. 7) (JERSEY) LAW 201-

Report

This primary purpose of this law is to amend the Banking Business (Jersey) Law 1991 (the “principal law”), so as to allow the Minister for Economic Development (the “Minister”) to make Orders in relation to accounting and audit of persons registered under the principal law.

This law also updates the definition in the principal law of the term “auditor”. At present that definition refers to Articles 113 and 109 of the Companies (Jersey) Law 1991. As a result of changes to that law in recent years (in particular the substitution of the whole of Part 16 in April 2010), those Articles are no longer directly relevant to the definition. The amendment under this law will provide clarity by removing the necessity to trace the combined effect of those changes for the intended meaning to be understood.

The scope and detailed terms of the additional powers for making Orders are equivalent to those already in force under Article 17 of the Financial Services (Jersey) Law 1998. They include the ability for an Order made under these powers to prescribe the circumstances when a failure to comply with the Order will constitute an offence, and the maximum penalty for each offence within the limits set by the enabling power.

The ability to make such Orders is needed to allow the statutory provisions in relation to accounting and financial reporting by persons registered under the principal law to be re-written and updated in line with proposals that were the subject of a public consultation conducted by the Financial Services Commission (the “Commission”), between February and April of 2010. The detailed provisions that will give effect to these proposals will be the subject of a further public consultation to be conducted by the Commission when the new Order has been drafted.

The regulatory provisions in relation to auditors of registered persons, including their appointment and their powers and duties, are also being revised across all sectors of the financial services industry in Jersey. These provisions are currently being drafted and will be the subject of a separate public consultation to be conducted by the Commission early in 2011. It is intended that, for those regulated under the principal law, one new Order will be made that will contain both the new requirements for accounting and the new provisions relating to auditors.

The present provisions relating to financial accounts of registered persons and the appointment of auditors are set out partly in the principal law, and partly in the Banking Business (General Provisions) (Jersey) Order 2002 (the “GPO”). The introduction of the enabling power will have no direct effect on any financial services business but it will allow improvements in the way that banking business is regulated in the Island so as to be consistent with international standards and future development of those standards. It will also achieve a greater degree of consistency across all sectors of the industry, which will be especially beneficial to banks that are subject to regulation under other laws in the Island.

The new powers are to be introduced to the principal law by substituting them for the existing provisions of Article 33. That Article is currently concerned with the giving of notices to the Commission and others when the appointment of an auditor comes to an end. Those provisions, with or without amendment, are to be transferred to the Order that will be made under the new Ministerial powers. The commencement provisions of this law have therefore been determined to ensure that no substitution will take place until that new Order is ready.

Financial and Manpower Implications

There are no financial or manpower implications for the States.

European Convention on Human Rights

Article 16 of the Human Rights (Jersey) Law 2000 requires the Minister in charge of a Projet de Loi to make a statement about the compatibility of the provisions of the Projet with the Convention rights (as defined by Article 1 of the Law).

On 21 January 2011 the Minister for Economic Development made the following statement before Second Reading of this Projet in the States Assembly –

In the view of the Minister for Economic Development the provisions of the Draft Banking Business (Amendment No. 7) (Jersey) Law 201- are compatible with the European Convention on Human Rights.