The Jersey Financial Services Commission (JFSC) has today published its Annual Report and financial statements for 2016, and in section 5 of the report, they provided their ENFORCEMENT OVERVIEW summary. This summary is repeated below:-

The Enforcement division investigates cases where Registered Persons or individuals associated with them have committed or potentially committed a legal or regulatory breach.

The JFSCs goal is to engage in constructive dialogue with those that The JFSC regulate,

• acting firmly but fairly
• imposing statutory sanctions only where necessary

Enforcement will always seek to work constructively with a regulated business, particularly where breaches of regulations are self-reported by the business and a clear resolve to address the shortcomings is evident from the outset. Remediation is always The JFSCs first port of call;

• of the 467 enforcement cases dealt with in the past five years, less than 12.5% resulted in public statements being issued.

As highlighted elsewhere in the Annual Report, Enforcement has experienced a noticeable rise in

• cases where local investors, often those who are elderly and vulnerable, have invested in high risk products without seemingly understanding or being appropriately advised of the potential dangers of losing their money.

Addressing such a trend became an evident priority for the JFSC in 2016 and will continue to be in 2017.

KEY ACTIVITIES & STATS 2016

Overall the number of new enforcement investigations in 2016 was 86, slightly above the 2015 figure but still below the five year average of 93.5 cases per annum.

However, the trend of increasingly complex investigations remains. The division had

• 42 active investigations at the end of the year.

The JFSC

• issued 99 formal notices requiring information and documents to be submitted and
• a further 24 notices requesting individuals to attend a formal interview.

The JFSC issued

• 11 public statements during the course of the year, of which five specifically restricted individuals from working in financial services.

The Enforcement division

• concluded six cases in 2016 through settlement agreements following detailed investigations.

Sanctions imposed as a result of these settlement agreements ranged from

• requiring businesses to undertake detailed remediation programmes and
• ensuring board members complete further specified training
• to the most serious sanction of licences being revoked or
• individuals being prevented or restricted from working in the finance industry.

Assisting other overseas regulators by securing evidence held in Jersey continued to be an important part of Enforcement’s role with

• 18 requests for assistance received and processed during 2016.

The JFSC’s intelligence function forms part of the Enforcement division and during 2016 proved critical for quickly identifying problems by connecting pieces of intelligence derived from both internal and external resources. This ensured swift, focused and precise use of limited investigative resources.

The JFSC saw a slight rise in the number of calls to the Whistleblowing Line with

• 25 received in total, ten of which led to active investigations.

During 2016, Enforcement continued to provide training on Jersey’s regulation and enforcement to other national and international agencies, including

• financial investigators from the UK National Crime Agency.

When interacting with these overseas agencies, the team also took the opportunity to highlight the high regulatory standards in place and enforced in the Island.

Enforcement Statistics COMPARED 2015 & 2016

1. › New enforcement cases commenced
   1. 2015 = 76
   2. 2016 = 86
2. › Active investigation at year end
   1. 2015 = 53
   2. 2016 =  42
3. › Requests for assistance from overseas regulators
   1. 2015 = 13
   2. 2016 =  18
4. › Formal notices issued
   1. 2015 = 95
   2. 2016 =  99
5. › Notices compelling individuals to attend an interview
   1. 2015 = 21
   2. 2016 =  24
6. › Public statements issued
   1. 2015 = 15
   2. 2016 =  11
7. › Preventing / restricting work in financial services
   1. 2015 = 6
   2. 2016 =  5
8. › Calls to whistleblowing line
   1. 2015 = 21
   2. 2016 =  25
9. › Calls leading to active investigation
   1. 2015 = 10
   2. 2016 =  10

http://www.jerseyfsc.org/pdf/JFSC-ANNUAL-REPORT-2016-FINAL.pdf