Jersey Financial Services Commission can now impose civil financial penalties for significant and material contraventions of the Codes of Practice and the AML/CFT Handbook. The level of fines has been set and the JFSC has published a statement on the principles and processes it will adopt under the civil penalties regime.

Who is affected?

All entities registered under the Banking Business (Jersey) Law 1991, the Insurance Business (Jersey) Law 1996 and the Financial Services (Jersey) Law 1998 must adhere to the relevant Codes of Practice published by the JFSC.

Entities registered under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 are required to adhere to the AML/CFT Handbook.

What is the level of penalties?

1. There are three levels of penalty, depending on the seriousness and circumstances of the breach of the Codes of Practice.

2. The highest level of financial penalty is up to 8% of ‘relevant income’. Broadly, ‘relevant income’ is income derived from licensed business activities. There is a cap of £4,000,000 on the level of penalty that can be imposed for more serious breaches.

3. The JFSC will also be able to issue public statements when it imposes a penalty.

PUBLISHED GUIDE

The JFSC has published Regulatory Sanctions: Decision Making Process setting out the process and principles that apply to JFSC decisions in a number of areas, including on civil penalties.

What should I be checking

While it may be difficult to obtain cover for civil penalties imposed by the JFSC, registered persons may wish to check that their insurance policies cover the costs associated with a JFSC action to impose civil penalties. Licensees may also wish to confirm that they comply with the Codes and AML/CFT Handbook now that breaches may lead to civil penalties.

In particular, the Codes were amended with effect from 1 July 2014 and further requirements imposed. The AML/CFT Handbook was amended with effect from 1 January 2015 and 24 March 2015.

If they have not done so already, registered persons will wish to conduct a thorough gapping analysis to ensure that they comply to the higher standards.  Comsure can help!!!!