In the face of a pandemic that has caused widespread disruption globally since the first months of the year and during a period in which, aside from the ramifications of COVID-19, financial services continue to tackle increasing regulatory and compliance complexity worldwide.
Amidst this complex scenario, international investors are looking for jurisdictions that can offer expertise, certainty and stability, in a robustly regulated, digitally progressive environment and Jersey continues to deliver. It has maintained its leading-edge role and, in doing so, has highlighted two of its inherent strengths, its resilience during challenging times and its ability to be fastmoving to cope with changing circumstances.
Our response to the COVID-19 crisis was swift and decisive. Within a short period of time at Jersey Finance, work processes were restructured, events rescheduled, online delivery established, webinars and podcasts replaced face-to-face delivery and cooperation with our Government, the industry Members here in Jersey and our other stakeholders, were all stepped up. The swift response to the challenges faced has been appreciated by clients in the key markets across the globe and it has enabled Jersey to remain the ‘go to’ jurisdiction for its areas of expertise in funds, banking and wealth management.
Substance and innovation
Alongside these measures, it has been important to reinforce our position as both a jurisdiction of substance that continues to provide a world-class regulatory framework, endorsed by global standard setters and one that is also a pioneer of innovative legislative developments.
We work closely with the Government of Jersey and our regulator, the Jersey Financial Services Commission (JFSC), on Jersey’s transparency and tax environment to ensure the right approach to legislation and regulation. As a result, the Organisation for Economic Cooperation and Development (OECD) Harmful Tax Practices Review confirmed that Jersey’s domestic legal framework is in line with relevant international standards. The Jersey authorities have also made a political commitment to align the Island with the principals of the EU’s Fifth Anti-Money Laundering Directive and committed to a public register of beneficial ownership as an example of best practice.
Jersey scores higher than most when benchmarked against global regulatory standards – it achieved one of the highest scores globally when evaluated by MONEYVAL, is one of around just 20 countries worldwide to currently be deemed ‘fully compliant’ by the OECD in terms of tax compliance and is a signatory to the Foreign Account Tax Compliance Act (FATCA) and the OECD’s Common Reporting Standard (CRS). In essence, this means we automatically exchange information with more than 100 countries, and we have agreements with around 50 countries to exchange information on companies within an agreed time frame.
It has now been more than a decade since Jersey took the strategic decision to implement a vision that would establish us as a global player, building on our existing business links and strong global contacts and reputation for probity, which had positioned us as a sophisticated IFC, ideally placed to meet the needs of global investors, including those in emerging markets.
Since then collaboration with our Government and the regulator has been a constant and our global presence has expanded and deepened.
Our global strategy has taken into account the implications of Brexit and we are well positioned regardless of the outcome of negotiations. We have our own bilateral private placement agreements already in place with individual EU member states to enable ‘third country’ fund managers to market to EU
investors and those that are not affected by Brexit. In addition, given the UK likely will continue to be the biggest and most important centre for institutional capital in Europe post-Brexit, we have the mechanisms necessary to support EU managers wanting to access the UK.
For countries across the globe tackling the COVID-19 pandemic, there is an even greater need to support their economies at home through attracting foreign direct investment and by active involvement in international investment opportunities and Jersey has the experience in navigating global regulation and compliance requirements to support such investment ambitions.
Thanks also to Jersey’s forward-thinking digital strategy, which has been developing at pace over recent years, our robust digital infrastructure has allowed our financial services industry to maintain its high-quality services to a global client base, including during the pandemic. Jersey’s high-speed fibre broadband has recently been recognised as one of the fastest in the world, according to independent rankings and we know it has been well received amongst clients globally who depend on quality service, speed and reliability. It is among our priorities to stay close to rapidly evolving digital and fintech developments and to work closely with our wider digital offering through Digital Jersey, whilst at the same time raising understanding and advocacy for our financial centre.
I have been proud to have been Chairman of Jersey Finance in the build up to the 60th anniversary year in 2021 since the emergence of the Island’s finance industry. It has also been a period when we have deepened our ties with key markets overseas and made further strides in demonstrating how Jersey plays a positive role in these global markets. It is clear that investors and advisers today demand robustly regulated jurisdictions such as Jersey that can offer expertise in service delivery, experience in the use of investment structures and an understanding of regulatory and legislative frameworks and yet remain nimble enough to take advantage of the latest innovations in digital technology and to enhance its legislative armoury when necessary to meet client demands, a combination of features which makes Jersey such a compelling location for international investors.
Renewal and the future
It has been estimated that borrowing by governments around the world could reach between nine and 11 trillion US dollars this year. Huge efforts over several years will be necessary to manage these unprecedented deficits without crippling the necessity for economic social and environmental renewal.
Investment capital will need to flow where it is needed in a fast, secure and efficient way and this is where Jersey will have a role to play as a stable, resilient and expert IFC. This is a time for sensible and rational collaboration, for IFCs to work together with the international community, governments and investors to do what they do best – get investment to where it is needed most, securely and efficiently.
One saying I have learnt during my time as Chairman of Jersey Finance is that we cannot direct the wind, but we can adjust the sails. In this unprecedented global environment, it is natural that there will be a lot of adjusting to do in the months to come. However, given Jersey’s stability, resilience and compliance with global standards, the expertise and depth of its workforce and its established and growing channels in international markets, we remain ideally placed to play a prominent role in the recovery process for economies worldwide.