The following offers an update on Jersey regulatory and legal matters this quarter and includes such matters as

1. JFSC Business Plan 2016
2. Other JFSC updates – inc Funds, TCB feedback and dear CEO letter
3. Updates to Jersey legislation
4. Tax
5. Beneficial ownership

JFSC Business Plan 2016

On February 5 2016 the Jersey Financial Services Commission (JFSC) delivered its 2016 Business Plan to the financial services industry. The plan sets out the JFSC’s key priorities for 2016. A press release is available, together with the presentation slides.

Consistent with earlier announcements, the JFSC is focusing on its change programme and a fundamental revision of its approach to supervision.

The JFSC has promised to embrace an increasingly risk-based methodology and adopt an entity-based, as opposed to licence-based, supervisory model. This should make interactions with the JFSC far more straightforward, with financial services businesses having a single point of contact at the JFSC.

Funds service business form

An amended fund service business/non-deliverable forward form – which now includes the question “Is the Fund an AIF within the meaning given in Directive 2011/61/EU?” – is available to download from the JFSC website.

Where fund services business providers are acting in respect of non-Jersey domiciled alternative investment funds (AIFs), they must be aware of their obligations as an AIF manager, arrange all regulatory approvals and ensure compliance with the AIF codes.

Cyber-security expectations for regulated persons

On February 22 2016 the JFSC published a ‘Dear chief executive officer’ letter seeking to outline the “growing importance of cyber-security arrangement and the Commission’s expectations of registered persons”.

Trust company feedback for 2014 and 2015

The JFSC has published a summary of its findings from the JFSC’s programme of onsite examinations conducted during the calendars years 2014 and 2015.

The key findings include:

1. deficiencies in initial and ongoing customer due diligence, particularly where enhanced due diligence is required;
2. inadequate overall assessment of anti-money laundering and combating the financing of terrorism risk as part of business risk assessments, particularly due to a lack of consideration of specific risks facing the business; and
3. failures in corporate governance, including:
4. policies and procedures either being incomplete, inaccurate or absent;
5. boards failing to meet on a sufficiently frequent basis;
6. ineffective monitoring through periodic reviews; and
7. failures to identify potential conflicts of interest or act on trigger events.
8. Updates to Jersey legislation

Draft Financial Regulation (Miscellaneous Provisions 3) (Jersey) Law 201

The draft law amends a number of laws administered by the JFSC – in particular:

1. the Alternative Investment Funds (Jersey) Regulations 2012;
2. the Banking Business (Jersey) Law 1991;
3. the Collective Investment Funds (Jersey) Law 1988;
4. the Financial Services (Jersey) Law 1998;
5. the Insurance Business (Jersey) Law 1996; and
6. the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 (together, the Regulatory Laws).

The changes to the Regulatory Laws, which are designed to counter money laundering and the financing of terrorism, constitute routine maintenance of the legislation that provides the JFSC with powers to supervise financial services firms and various other businesses.

Companies (Transfer of Shares – Exemptions) (Amendment) (Jersey) Order 2016

This amendment order adds the Luxembourg Stock Exchange and the Johannesburg Stock Exchange to the list of approved exchanges where Jersey companies can list uncertificated shares, pursuant to the Companies (Transfer of Shares – Exemptions) (Jersey) Order 2014.

Tax

Taxation (Implementation) (International Tax Compliance) (Common Reporting Standard) (Amendment of Regulations) (Jersey) Order 2016 – This order has amended Schedules 2, 3 and 4 of the Jersey Common Reporting Standard (CRS) regulations, which provide details of the jurisdictions committed to the adoption of CRS. Further amendments are expected as jurisdictions confirm their intentions.

CRS guidelines

• The Chief Ministers Department has finalised a second edition of the CRS Guidance Notes, embracing amendments made since the December 2015 First Edition.

Channel Islands tax representative appear at EU committee

Representatives from the Channel Islands have faced questioning from members of the European Parliament on taxation systems. Jersey was represented by international affairs adviser Colin Powell, who was asked to explain local practices and provide views on the European Commission’s Anti-tax Avoidance Package, published in January 2016. A letter sent by the chief ministers of Jersey and Guernsey to the European Parliament ahead of the meetings is available, and recordings of the meetings can be found on the European Parliament’s website.

EU Savings Directive regulations suspended

The minister for external relations issued the Taxation (Agreement with European Member States) (Suspension of Regulations) (Jersey) Order 2016, suspending the operation of the EU Savings Tax Directive between Jersey and all contracting parties (apart from Austria) as a result of CRS coming into force.

Beneficial ownership

The government published its Consultation on Beneficial Ownership of Jersey Companies and a Register of Directors. The consultation sought input on the automatic updating (post-incorporation) of changes in company beneficial ownership and control and the introduction of a public central register of directors. The consultation closed on April 7 2016.