Jersey Financial Sector Continues To Grow

by Jason Gorringe, Tax-News.com, London

31 May 2005

The Jersey Financial Services Commission has reported bank deposits and investment funds up by more than GBP8 bn in the first quarter of 2005.

Bank deposits increased by £4.0 billion during the first quarter. Sterling bank deposits increased by £1.2 billion and currency bank deposits by the equivalent of £2.8 billion. Whilst currency fluctuations accounted for part of the £2.8 billion increase, the majority came from an actual increase in currency deposit balances. The number of banking licences at 31 March 2005 was 48.

The value of collective investment funds managed in the island stood at £103.9 billion at the end of the first quarter (an increase of £4.3 billion over the same quarter in 2004). The number of collective investment funds and COBO funds rose during the quarter from 833 to 870. The total value of funds under management (Class B of the Financial Services (Jersey) Law 1998) increased by £2.1 billion during the first quarter.

As in previous quarters, hedge funds have continued to grow both in number and in value.The number of hedged/alternative investment funds now stands at 261 with a total Net Asset Value of £22.7 billion, an increase of £1.8 billion on the previous quarter. The growth in hedge funds was however, in part, offset by a drop in bond and equity funds caused by a net reduction in the number of private funds and, in particular, the transfer of a Jersey public fund which merged into a Luxembourg fund during the quarter. The NAV of this fund was in excess of £1 billion.

Expert funds also continued grow in popularity.The first quarter of 2005 saw 25 new expert funds established, taking the total number of funds at 31 March 2005 up to 60. The value of expert funds is now in excess of £5 billion which represents a 34.2% increase on the previous quarter. The volume of applications for new expert funds continues to increase month on month.

Company incorporations for the first quarter totalled 608, an almost identical figure to that in the corresponding quarter of 2004. The number of ‘fast track’ incorporations for the quarter was 249 and the number of normal company incorporations was 359. During the first quarter of 2005, against their self-imposed target of 95%, the Registry recorded a 99.4 rate for normal two-day incorporations and a 98.8% rate for fast track incorporations.

The regulation of general insurance broking came into force on 21 January 2005. To date, the Commission has received 68 applications, of which 40 have been fully registered while the remaining 28 have transitional status while various outstanding issues are clarified.

David Carse, Director General of the Commission, commenting on the quarterly statistics said today: "The increase during the quarter in bank deposits and funds under management is encouraging. Business in the funds sector also remains buoyant and, in particular, the continuing growth in Expert Fund business bodes well for the future of this sector.”

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