Bermuda: New Law In Jersey Amends Financial Services Regulation Legislation

Last Updated: 1 December 2014
Article by Wendy Benjamin, Andrew Weaver, James Gaudin and Christopher Spencer

1. On 21 November 2014 the Financial Regulation (Miscellaneous Provisions No.2) (Jersey) Law 2014 came into force. The law contains a range of amendments to the following Laws:

  • the Collective Investment Funds (Jersey) Law 1988 (CIF(J)L);
  • the Banking Business (Jersey) Law 1991 (BB(J)L);
  • the Insurance Business (Jersey) Law 1996 (IB(J)L);
  • the Financial Services (Jersey) Law 1998 (FS(J)L);
  • the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 (SB(J)L).

These are briefly summarised below.

2. The powers of the Jersey Financial Services Commission (the Commission) to require the provision of information, documents and the answers to questions:

  • The new provisions are intended to introduce a common definition for the nature of information and documents that may be requested in line with the BB(J)L and IB(J)L - "what may be reasonably required of the person for the purposes of the performance of the Commission's functions" under the Law.
  • The range of persons on whom a notice may be served has been extended in all the Laws to include: employees and former employees of a business that is regulated under one of the laws (a "registered person"); an employee or former employee of a business that was formerly a registered person; a person who is or was under a contract for services with a registered person; and anyone who is or was an employee of a person under a contract for services.
  • The Commission will be able to require the person on whom notice is served to also provide verification of the information or documents requested under all the Laws.
  • The maximum penalty for failing to comply with, or otherwise obstructing the exercise by the Commission of the powers to obtain information or documents, etc. will be standardised across all Laws (6 months in prison, an unlimited fine, or both prison and a fine).
  • The "reasonable excuse" defence has been standardised across all Laws and protection for those under an obligation of legal professional privilege has been added where missing.

3. The powers of the Royal Court to make orders for restitution:

  • The provisions currently allow an order for restitution to be made where the regulated business is both the transacting counter-party and the provider of the false and misleading. The proposed change will allow an order to be made in circumstances where the counter-party to the transaction is somebody other than the provider of the false and misleading information.
  • Any order made by the Royal Court may also require that restitution be made by anyone knowingly concerned with the cause of the loss.

4. To enhance the ability of the Commission to co-operate with overseas regulators in the exercise of their statutory functions, where appropriate, subject to certain criteria being satisfied.

5. To introduce a provision that gives the Commission some discretion in the application of solvency margin requirements on certain categories of insurance business.

6. Amendments to the SB(J)L to update the Commission's obligations over Payment Service Providers in respect of anti-money laundering and countering the financing of terrorism.

7. Amendments to the Bankruptcy Law will allow the Commission to apply to the Royal Court for an en désastre declaration to be made in respect of the property of an unclassified fund regulated under the CIF(J)L.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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