Jersey Urged To Beef Up FSC's Powers

by Robert Lee, Tax-News.com, London

26 October 2010

Senator Alan Breckon has requested that the Minister for Economic Development bring forward for approval by the States no later than June 2011 proposals to allow the Jersey Financial Services Commission to impose fines for breaches of its regulations.

In a Proposition lodged with the States, Breckon argues that this would bring Jersey into line with other jurisdictions which have given their regulators powers to fine companies which have breached regulations whilst also satisfying a recommendation of the International Monetary Fund following its recent assessment of Jersey's regulatory and anti-money laundering regimes.

Breckon states in the Proposition that:

"Over the last few years I have noted that the Jersey Financial Services Commission (JFSC) have investigated and publicized a number of issues and cases regarding the conduct, capability and performance of individuals and organizations that are licensed by them.

"I understand that these investigations can take a long time to conclude and can be very costly and take a great deal of time and effort. As well as in-house officers, outside specialized assistance is used for legal advice and areas like forensic accounting or computer or other information technology searching.

"Some of these costs can be recovered by making those investigated pay for say an independent report to be produced, however, as the Law stands the JFSC have no powers to impose fines on those who transgress. In many other jurisdictions regulators have powers to fine and in my opinion this is an option which the JFSC should have."

Breckon observed that the UK's Financial Services Authority has for many years had the power to use fines as a sanction for those who do not stick to the rules. The Jersey Competition Regulatory Authority also has powers within the Law to use fines as a sanction, he noted.

"I believe Jersey’s Financial Services Commission should have similar powers, as opposed to some publicity and perhaps a football equivalent of a yellow card," he stated.

The States' proposition, lodged on October 19, is due to be tabled in the States Assembly on November 16, 2010.

Recommended