While preparing for the MONEYVAL assessment is a key priority this year, we continue to strengthen our regulatory framework in line with international standards, foster valued stakeholder relationships and invest in our people and technology.
Despite global instability and geopolitical disruption, we remain committed to our top strategic priority of achieving sustainable, long-term excellence in regulatory effectiveness. Our focus is to improve our capability to combat financial crime while seeking to enhance our Island’s reputation via local and international engagement and adding value to Jersey’s vibrant financial industry through greater efficiency and accessibility.
As a unitary regulator, we recognise the importance of achieving the right balance between mitigating the risk of financial crime and ensuring we fulfil our conduct and prudential supervisory responsibilities. With this in mind – and in collaboration with Government, Jersey Finance and industry stakeholders – we will continue to develop our framework on sustainable finance, the enhancement of Jersey’s consumer lending regime and the alignment of our banking regime with Basel III.
1) Facilitating Business Integrity
Cooperation and engagement are key to our role as a regulator and company registry. It is essential to understand international rules and standards and how they can be applied in a proportionate but effective way in maintaining Jersey’s reputation as a leading international finance centre. This contributes to meeting our guiding principles – the protection and enhancement of the reputation and integrity of Jersey in commercial and financial matters, the best economic interests of the Island and the need to counter financial crime both in Jersey and elsewhere.
The JFSC is party to a wide range of domestic and international Memorandums of Understanding (MoUs) and cooperation agreements. Locally, examples include cooperation agreements with the Chief Minister and the Channel Islands Financial Ombudsman (CIFO), while internationally we are party to over 80 MoUs. Evidence of the importance of this extensive cross-border assistance and collaboration are the Multilateral Memorandums of Understanding (MMOUs) with bodies such as the International Organisation of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS).
Jersey prides itself on being a well-regulated and compliant international finance centre and we have a crucial role in ensuring continued market access, keeping abreast of new developments and meeting accepted international standards.
This is achieved through effective dialogue with standard setting organisations, participating in their work and applying appropriate measures. We benefit from their collective experience as we develop a greater understanding of risk and how to mitigate it.
In addition to meeting international standards, we are also focussed on emerging topics such as sustainability. We remain committed to supporting the global move towards more sustainable finance and the need to take environmental, social and governance (ESG) considerations into account when making investment decisions.
For example, in 2021, we introduced measures to mitigate the risk of ‘greenwashing’ whereby sustainable investments are mislabelled, with transitional periods completing in early 2022. We actively engage with local networks such as Jersey for Good and are a member of the Network for Greening the Financial System. This ensures we operate in an informed manner, further backed by the International Network of Financial Centres for Sustainability assessment of our region. Our work in this area is aligned with industry and the Government of Jersey.
2) Harnessing Technology and Influencing the Digitalisation of Financial Services
Our innovation hub focusses on identifying and responding to emerging technologies including – but not limited to – regtech, virtual assets and artificial intelligence. The innovation hub is committed to enabling tech-savvy businesses through the development of clear and appropriate financial regulation.
We are working closely with our key partners in Government, Digital Jersey and Jersey Finance to build consensus on how the Island harnesses the opportunities of new technology, whilst appropriately identifying and mitigating associated risks. For example, together with Government, we recently co-hosted ‘Future Forward: Embracing RegTech in Financial Services’, an industry event featuring experts in the fields of digital identity, blockchain analytics, open finance and legal tech.
Internationally, we continue to engage with other regulators through the Global Financial Innovation Network (GFIN) and IOSCO. Membership of such organisations helps to ensure we stay informed of the latest developments in this area and remain connected with policy makers in other jurisdictions. Separately, the innovation hub continues to engage bilaterally with a range of overseas regulators including the UK’s Financial Conduct Authority, the Monetary Authority of Singapore, Malta and Luxembourg.
As part of our digital transformation programme we are seeking to capitalise on the potential of our data to make both the JFSC and industry more efficient. We have identified a clear opportunity to improve user experiences, enhance security and build our collective knowledge, skill and understanding, to foster enhanced digital capability.
3) Developing our People, Systems and Capability to be a High-performing Organisation
The fallout from global events such as the COVID-19 pandemic and the war in the Ukraine has severely impacted the economic climate and led to a cost-of-living crisis affecting most countries and businesses. Conversely, it has also created opportunities to consider organisational design, future workforce planning and how technology can support resourcing challenges.
To manage the extension of our regulatory perimeter, enhanced international standards and the introduction of new regimes, the JFSC has almost doubled in size over the last five years. This external and internal context requires us to consider our organisational development and the capacity and capabilities we need to build for the future, including how we adapt to become even more data orientated.
Such developments have also meant a change in our cultural narrative to realise our aspiration to become a more dynamic, innovative, agile and effective organisation.
To further increase our effectiveness, we are now developing our people to be educators as well as regulators. This forms part of an increased focus on stakeholder engagement with industry, consolidating knowledge and communicating it effectively to support better decision making and understanding, facilitating improved business integrity.
Overall, we are in a good place and beginning to realise our vision to be a high-performing regulator, building for the long term success of Jersey.
As we increasingly focus on digitalisation, sustainability and new regimes, it is fundamental that we continue our business transformation and actively engage in cross-border cooperation, fostering strong stakeholder relationships as a future-focussed organisation with the people, knowledge and capability to continue to deliver for Jersey.