Jersey's Financial Services (Extension) Law is likely to come into force in two months, providing the States agree to the Financial Services Commission’s (FSC) timetable that is. Although the law is on the verge of being implemented, FSC director general Richard Pratt is not willing to put the cart before the horse and said 'this is all subject to Finance and Economics and States approval, and I am taking nothing for granted.'
The new law will extend the remit of the FSC under the Investment Business (Jersey) Law 1998 over banking, investment funds and insurance activities into trust and company management, if the underlying activity is connected with financial services.
The law's code of practice will apply to relevant financial service providers from November 27, with business licensing and qualification regulations in force from February 2, 2001, when firms must have a licence in order to trade. May 28, 2001 is the final deadline after which all other businesses must operate in full compliance with the code of practice. Qualification requirements for most lower category staff must be fulfilled before November 2003; the deadline for top and middle category employees will be November 2005.
The FSC says the aim of the legislation is to: 'establish and maintain high standards in the provision of these services, and thereby enhance Jersey's reputation as a finance centre of high repute ... customers, both in Jersey and elsewhere, will be able to have confidence that certain standards of competence, integrity and solvency are being required and that adherence to such standards are being monitored.'
The proposed extension to the Investment Business (Jersey) Law has been on the cards for some time now, having been endorsed in the 1998 Edwards Report on Financial Regulation in the Crown Dependencies. In November, 1999, the Island Task Force - formed in response to the report - announced its recommendation of the extension.
The FSC claims that the extension to the law will be a landmark and will influence many other tax regimes worldwide. It said: 'Jersey will be one of the first jurisdictions in the world to bring trust companies and company service providers into regulation. The other Crown Dependencies (Guernsey and the Isle of Man) are preparing similar legislation. Moreover, it seems likely that international standard setting bodies will encourage other jurisdictions to follow suit.'
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