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11 February 2016
Amendments to codes of practice
The Jersey Financial Services Commission (JFSC) published Consultation Paper 12/2015 on December 15 2015. The paper proposes amendments to various codes of practice, including the following three key changes.
It is proposed that all notification requirements set out in the codes be made clear and unambiguous. The proposal suggests that the codes explicitly state that all required notifications be provided to the JFSC in writing and that this requirement can be satisfied by email. This will provide welcome clarity for local service providers and their advisers, and should remove the uncertainty as to the JFSC's notification requirements.
Following the establishment of the Channel Islands Financial Ombudsman (CIFO) on November 16 2015, the codes that relate to investment, banking and insurance business have been updated to include regulatory requirements on the handling of consumer complaints. It is proposed that:
The CIFO does not oversee certified funds or their functionaries, except in relation to recognised funds. However, it is proposed that the codes of practice for certified funds be updated in relation to complaints, including requiring funds to:
Other changes include amending the introduction of the codes and updating them to include the new civil penalties regime and the definition of anti-money laundering legislation.
The JFSC will provide its responses by February 19 2016 and it is anticipated that the revised codes will be issued during the first half of 2016.
The JFSC unveiled its business plan on February 5 2016, detailing its objectives and priorities for 2016 and beyond. Members of the financial services industry and other interested parties were invited to attend the event.
Change Programme – update
In November 2015 the JFSC published the first in its series of papers detailing its Change Programme. The paper explains how the JFSC intends to change the way in which it will regulate firms and how entities will interact with the JFSC in the future.
Consultation on JFSC funding
The JFSC issued Consultation Paper 10 – Funding Review in order to review the proposed changes to the way in which fees paid by regulated businesses are calculated and levied.
Fund service business annual compliance return
The JFSC's Funds Supervision Team has introduced an annual compliance return for fund services businesses, which requires that registered persons provide information on their businesses annually, bringing it into line with other regulated sectors such as trust company business and banking business. The information contained in the form will be used to assist in the JFSC's supervision of fund service businesses.
The form should be completed by all registered persons that hold a fund service business registration, except for managed entities, which need not complete a return.
Virtual currencies and financial technology regulation
Following a JFSC consultation in Summer 2015, legislation relating to the regulation and supervision of virtual currency exchangers (ie, those that exchange fiat money for virtual currency) is expected to come into force in 2016. The proposal set out in the JFSC's October 21 2015 policy document is modelled on the Jersey money service business regime. It is proposed that all virtual currency exchanges be subject to the following requirements:
The Taxation (Implementation) (International Tax Compliance) (Common Reporting Standard) (Jersey) Regulations 2015 came into force on January 1 2016. The regulations give effect to the Organisation for Economic Cooperation and Development's Common Reporting Standard (CRS) and broadly require reporting financial institutions to:
These returns are then shared with the competent authority of the account holder's resident jurisdiction.
The scope of the CRS is far broader than the existing intergovernmental agreements. First, 51 jurisdictions agreed to implement the CRS on January 1 2016, with another 44 scheduled to implement the CRS at a later date. Second, exemptions from reporting have been materially removed, except for pre-existing accounts. As a result, Jersey service providers will need to update their processes in respect of the CRS.
The JFSC has prepared a first draft(1) of its guidance notes in relation to the CRS.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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