The JFSC’s remit includes a combination of responsibility for proper conduct, strong prudential compliance, comprehensive registers of businesses, including beneficial ownership information and coordinated efforts to combat financial crime.
As you will read in other contributions to this publication, the breadth and maturity of Jersey’s financial services industry makes Jersey a highly competitive jurisdiction with an international reputation for quality. That reputation for quality is borne out by the approach that businesses here take to compliance with regulation. In turn, that approach to compliance has seen Jersey consistently meet the standards set by international bodies including the International
Monetary Fund (IMF), Organisation for Economic Cooperation and Development (OECD), European Securities and Markets Authority (ESMA) and Financial Action Task Force (FATF).
As a jurisdiction, Jersey is unashamedly focused on combating financial crime as our number one priority and this means that the people and global organisations who do business here can be confident that they are investing in an international finance centre that is relentless in its commitment to deter, detect and fight money laundering and terrorist financing.
Global regulation does not stand still in this context, indeed it cannot. This means our efforts have a focus on maintaining the strength of our regulation such that Jersey’s businesses remain compliant with those international standards.
In respect of conduct and prudential regulation, our work is equally robust in ensuring equivalence with the international standards. This means vetting and monitoring businesses and the senior managers who work within them as well as ongoing assessments of compliance with robust liquidity and solvency benchmarks.
Across these core supervisory imperatives: fighting financial crime; ensuring proper conduct; and maintaining robust finances, Jersey’s regulatory regime safeguards the interests of the clients of our financial services industry both locally and internationally. The Island has an ethos that is geared toward meeting high standards and our role as regulator therefore includes ensuring those standards evolve in line with global expectations, while focusing our interventions on the small minority of businesses that pose the greatest risk of failure to meet them.
During the first quarter of 2020, global society experienced shocks that are still being felt. Our first concern was minimising the human impact as our people contended with the human impact as our people contended with the need to take care of their families and community. Rightly, every business in Jersey similarly focused on doing the right thing by their staff and clientele.
This focus continues as we look to the next stage of managing the gradual approach to recovery, yet it is a testament to the integrity of Jersey’s finance industry that amongst the management of very real human needs, regulated businesses have also worked to ensure continuity in the services they provide to their global client base. A significant part of Jersey’s ability to respond to the shocks the world has experienced is its pragmatic commitment to high standards. This is a practical benefit of Jersey’s strong regulatory regime and the high-quality people and businesses that operate here. Jersey’s enviable digital infrastructure played a part in rapidly enabling the shift from face-to-face business to virtual with minimal impact. For our part, not only did we work to maintain the right level of engagement between our supervision teams and regulated businesses, but we also accelerated the progress of our work to digitise our Registry and, where possible, our other initiatives.
Our readiness to respond during the events of early 2020 was supported by the Government of Jersey’s commitment to ensuring that the environment for doing business accommodates the unexpected. Island agencies pulled together to protect the environment in which our regulated businesses operate and this, in turn, reinforced the strength of the Island’s collaborative approach to maintaining high standards – not just when times are good but also when times are tough, very tough.
Looking back to 2019, the majority of Jersey’s financial services industry had enjoyed a sustained period of prosperity since the 2008 financial crisis. The Net Asset Value of our funds held was at record levels, there were more than 300 Jersey Private Funds (a product launched in 2017) and, holistically, employee numbers had been stable or had grown each year. Professional services firms continued to win business, Jersey banks experienced stable or increasing deposits and there had been similar stability, or growth, within the other sectors that we regulate.
In this context, during 2019 the JFSC went through a process of taking stock and planning for the future. A clear message that came out of our planning exercises was that Jersey’s financial services industry holds an enviable position economically and reputationally. While we know that the picture for the remainder of 2020 presents significant challenges, the stability and growth that Jersey’s financial services industry has experienced means we enter the next stage from a position of strength.
Opportunities exist to invest in the right infrastructure and be smart in these times that are not so prosperous. As with all jurisdictions, in the coming months and years, Jersey will be put to the test. A key part of passing that test will be ensuring that Jersey continues to lead the way in complying with international standards, expectations and the global transparency agenda.
Jersey’s strong infrastructure continues to evolve and contribute to the attractiveness of the jurisdiction as one of the world’s leading international finance centres. Coordinated efforts between the Island’s agencies and businesses, continue to develop a safe, stable and well-regulated environment for the international business and investment communities. This includes our work:
- supporting digital transformation across the finance sector particularly for regtech and fintech
- ensuring our workforce acquires the knowledge, skills and resilience needed in 2020 and beyond
- developing the effectiveness of our supervision of regulated businesses
- embedding risk-based choices throughout all of our decision making
- aligning our activities with new and developing international
- standards including in respect of beneficial ownership and sustainability disclosure
One example from 2019 that demonstrates the JFSC’s commitment to improvement, is the relaunch of our website. Our new website was the most improved website in the UK Consumer Finance INDEX moving up 157 places in Q1 2020 to fourth position. It really is worth taking a look at: www.jerseyfsc.org.