Jersey FSC Unveils Proposed Amendments To Directorship Rules

by Robert Lee, Tax-News.com, London

03 March 2009

Jersey’s Financial Services Commission has published its guidance note on proposed amendments to rules surrounding directorship. The proposals include several alterations to existing exemptions as well as the introduction of a new exemption, which will exempt directors holding six or fewer directorships from registering with the Financial Services Commission.

The Commission has detailed the proposals as follows:

New exemption

Create a new exemption that introduces de–minimis provisions which will allow an individual to hold a maximum of six directorships (in addition to any that would otherwise be exempt) before the need to register is triggered.

Amendments to existing exemptions

• Amend the wording of the ‘Directors’ exemption contained in paragraph 13 of the Schedule to the Financial Services (Trust Company Business (Exemptions)) (Jersey) Order 2000. Whilst the Commission believes that the wording successfully exempts directors of say, local florists, grocers, garages etc, there is the potential for individuals that may act as a director, on a professional basis, for more than one such company, not to be able enjoy this exemption. As the financial services regulations were never intended to catch such areas of activity, the Commission felt it necessary to amend the wording of this exemption to provide more explicit wording.
• Amend the wording of the ‘Connected Persons’ exemption contained in paragraph 1 of the Schedule to the Financial Services (Trust Company Business (Exemptions No 4)) (Jersey) Order 2000. In reviewing the terms of this exemption, it would seem that the accompanying note could potentially result in misinterpretation, on the basis that the wording is perhaps too widely constructed, and may exempt directors of companies on a far wider basis than the ‘private arrangements’ it was designed to capture. As a result, the Commission believes it is of value to publish its interpretation of this exemption within the Guidance Note and would propose an amendment to this exemption to clarify this point.
• Amend the wording of the Experienced Personal Adviser exemption contained in paragraph 4 (note 1) of the Schedule to the Financial Services (Trust Company Business (Exemptions No 2)) (Jersey) Order 2000, to more effectively enshrine the grandfathering nature of this exemption. This exemption was crafted to accommodate “retired” individuals that were holding a handful of directorships or trusteeships as at 11 December 2000 (the date this exemption came into force). The majority of these engagements would have been a legacy from the individual’s previous employment within the financial services industry. Any individual not in this position, as at 11 December 2000, would not be able to enjoy the exemption and would be required to register to conduct this type of business. The Commission is of the view that the current wording of this exemption does not unequivocally reflect the intention behind this piece of legislation as described above.

The proposed amendments will be subject to a consultation process which the Commission will commence in the first half of the year. The consultation will be based on suggested legal drafting of an amended Exemptions Order.

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