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Jersey Mulls Repeal Of Secondary Trust, Investment Legislation

by Robert Lee, for LawAndTax-News.com, London

21 October 2007

The Jersey Financial Services Commission is proposing to amend and possibly replace secondary legislation relating to the Trust Company Business and Investment Business laws, in preparation for impending scrutiny of the island's regulatory framework by the International Monetary Fund.

A consultation paper published by the Commission on October 19 follows up a position paper issued in June, which set out the policy proposals that form the basis for the majority of the legislative changes referred to in the consultation paper.

The consultation paper covers proposed legislative changes in the following areas:

  • Repealing the Trust Company Business and Investment Business secondary legislation relating to accounts, audits and reports and replacing it with a single piece of legislation designed to cover both business sectors.

The majority of the amendments proposed in the replacement accounts, audits and reports legislation are in connection with the Investment Business sector; although the proposals do clarify a number of items for the Trust Company Business sector.

  • Repealing the secondary legislation that currently places requirements on Trust Company Businesses with respect to safekeeping customer money. The replacement legislation will incorporate the existing requirements relating to customer money, and proposes requirements relating to customer assets taking the form of: investments (as defined by Schedule 1 to the Financial Services (Jersey) Law 1998); and - immovable property.
  • Publication of new secondary legislation relating to any financial service advertisement in respect of financial service business as defined by the Financial Services (Jersey) Law 1998.

The FSC stated that the amendments to the secondary legislation are being proposed in preparation for the forthcoming assessment (expected to take place in the second half of 2008) by the IMF of the Island’s regulatory framework.

The IMF last assessed Jersey, along with the other Crown Dependencies of Guernsey and the Isle of Man, in 2002/2003 and the resultant report was published in October 2003.

The IMF will assess the Island’s regulatory framework against the relevant international regulatory standards. The assessment will consider legislation, Codes of Practice, policy statements and guidance notes, the practical implementation of the framework by the Commission (and other relevant agencies) and input provided by industry.

One of the critical areas of the assessment will be the practical implementation of the regulatory framework and, dependent upon feedback to this consultation, the Commission seeks to make the secondary legislation relating to accounts, audits and reports prior to 31 December 2007: the period end for many registered persons undertaking Investment Business and Trust Company Business.

The full text of the Jersey FSC Consultation on secondary legislation amendments can be found in the Tax News Resources section.

 

 






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