MINISTER FOR ECONOMIC DEVELOPMENT
Companies (Amendment No. 8) (Jersey) Law 2006 (the “Amendment”)
Subsidiary Orders:
Companies (Fees) Order 200-
Collective Investment Funds (Permit Fees) (Jersey) Order 200-
Collective Investment Funds (Unclassified Funds)
(Prospectuses) (Jersey)Order 200-
Insurance Business (General Provisions) (Jersey) Order 200-
(together, the “Orders”)
1. Introduction
1.1 The Amendment is due to come into force on 1 February 2006 and will, among other things, permit the formation of cell companies under the Companies (Jersey) Law.
1.2 As a result of the introduction of cell companies, it is necessary to amend the Orders, copies of which are attached. The Minister is asked to approve the Orders with a view to the Orders coming into force on 1 February 2006.
2. Discussion
2.1 Cell companies are new entities under Jersey law, and it is therefore necessary to set out in subsidiary legislation the fees and charges that will be levied upon such companies.
2.2 Although cell companies will be established under the Companies Law, it is likely that many cell companies will be used for regulated activities. It is therefore necessary to amend subsidiary legislation issued under both the Collective Investment Funds (Jersey) Law and the Insurance Business (Jersey) Law.
2.3 In setting fees, the two guiding principles have been to attempt to ensure that fees were set at a level which would make cell companies attractive, while ensuring that the income of the Jersey Financial Service Commission (the “Commission”) arising from regulated activities was preserved at its current level.
2.4 The fees to be levied upon cell companies are set out fully in the Orders. The most important aspects of the regime are that, under the Companies Law, cell companies are treated identically to ordinary companies, save that an additional annual return fee is payable in respect of each cell, and that under the Collective Investment Funds regime, cell companies are treated the same as umbrella funds and incorporated and protected cell companies are treated alike. In addition, a conversion fee is to be charged for existing funds which convert to cell company status. This will ensure that the Commission retains any fees lost in the event that stand alone funds were transferred into the cells of a cell company.
2.5 Finally, a requirement is set out in the CIF Prospectus Order to the effect that any prospectus issued in respect of a cell company carry a form of wording alerting potential investors to the nature of cell companies.
3. Recommendation
3.1 It is recommended that the Minister approve, sign, date and seal each of the Orders, with a view to the Orders coming into effect, in accordance with their terms, at the same time as the Amendment.
PAUL DE GRUCHY
Finance Industry Executive
20 January 2006Attachments (to physical document only)
Companies (Fees) Order 200-
Collective Investment Funds (Permit Fees) (Jersey) Order 200-
Collective Investment Funds (Unclassified Funds)
(Prospectuses) (Jersey)Order 200-
Insurance Business (General Provisions) (Jersey) Order 200-