It all began in earnest in 1961 when the origins of the modern finance industry first emerged. In that year, Jersey’s legislative changes made it more appealing for merchant banks to set up offices on the Island to meet the banking and investment needs of the growing number of expatriates.
As more and more banks opened offices in St. Helier, the Island quickly became acknowledged as a safe, stable location for investors to place their funds and, as international banking services expanded, so did the opportunity for Jersey to develop as a centre for related trust business. More legislation followed when a statutory trust law was introduced in 1984, so successful that it became a blueprint for regulations in some other jurisdictions and then in 2000 a ground breaking system of regulation designed to provide a comprehensive supervisory system for trust business was implemented. The drive for innovation continued and in 2009 foundations were added to the statute, adding appreciably to the choice of structures available and appealing especially to many investors in the emerging markets.
Aligned with banking and trust services, funds was a third pillar of the Jersey offering and a key date was in 2004 when a streamlined regulatory service was introduced which assisted in attracting increasing levels of alternative investment fund business, especially private equity and real estate.
Product innovation and regulatory changes have continued into recent times. For example, in 2017 funds business was boosted by Jersey Private Funds and a further streamlined regulatory framework, while philanthropic endeavours were encouraged through the Jersey (Charities) Law, introduced in 2018. Through every decade, the industry has grown and today, for example there are 30,000 trusts administered in Jersey at a total value exceeding £600 billion and nearly 400 foundations, while funds business recorded £360 billion in funds under administration in the summer of 2020 – the highest figure to date.*
Throughout its evolution, the Jersey government has recognised the value the industry brings to the economy through jobs and taxes and has consistently supported its development.
In more recent decades we have witnessed the global expansion of financial services and the shift of some wealth creation from west to east as new markets such as China emerged. Competition between leading international finance centres (IFCs) for new business has also intensified.
In response to developments, Jersey Finance was established in 2001 to both promote the strengths of Jersey’s offering worldwide and to defend its reputation for probity.
Since those times, while not neglecting London and more traditional markets, Jersey Finance has expanded its presence globally through a network of international offices. Among the highlights has been the opening of an office in Hong Kong in 2009 and a launchpad office in Shanghai in 2014. We became the first IFC with an office presence in the Dubai International Finance Centre in 2017 and we opened an office in New York last year. Meanwhile, Jersey Finance, with support from the government, has hosted regular visits to these and other key markets across Africa, Asia and the Middle East to create a platform for increasing business by building commercial ties, raising awareness of the services available and outlining our focus on high standards of regulation and corporate governance.
One of the high-profile challenges has been to educate many Western governments and influencers of the value of IFCs, and during the last decade, independent studies have been completed to reinforce Jersey’s positive role as an IFC. The most telling research was in 2013, when we demonstrated that Jersey provided £500,000,000 of inward investment into the UK and supported around 180,000 jobs, while similar research showed the value of Jersey’s contribution to the EU**. Meanwhile in 2016, Jersey secured independent endorsement for the quality of its regulation from MONEYVAL, a Council of Europe body and as a co-operative jurisdiction from ECOFIN, the EU Finance Ministers in 2019 – key milestones in the drive to be understood for the quality and probity of our jurisdiction, while expertly delivering cross border investment in support of economic growth worldwide.
Thus, in 2021 the Island celebrates both the 60th anniversary of the finance industry and all its achievements and 20 years since Jersey Finance was established.
As we look ahead, the basic strengths of Jersey, which have served it well during the first 60 years, will continue to be important in future. The appeal of political and economic stability should not be underestimated, nor the inherent skills that the jurisdiction’s 13,000 strong workforce can call upon. The strength of our regulation, our ability to cooperate with the authorities in other nations and our resilience in periods of change, so sharply underlined in 2020 as the industry has adapted effectively to the COVID-19 pandemic, all play their part.
Closer to home on Jersey, the financial services industry is proud to play a role in the Island’s future prosperity by taking the opportunity to work with key local partners to support their fundraising efforts and future success. Aside from its international commercial growth, the industry retains its commitment to the local community with the Island’s best interests at the heart of what we do. With this in mind, we look forward to supporting community events and initiatives during 2021 and beyond.
So let’s celebrate together in the knowledge that Jersey remains well-placed to be the jurisdiction of choice for international investors and their advisers in the years ahead, as we continue to work hard to remain competitive, innovate when necessary and maintain those high standards.
*Figures compiled by the Jersey Financial Services Commission
** Capital Economics Research