Deposit-taking Business Code of Practice - Prudential Returns

Summary

This Code of Practice sets out the prudential reporting requirements that apply to banks registered under the Banking Business (Jersey) Law 1991, forming one of five parts of the Banking Code. It is effective from 23 February 2024 and applies to both Jersey Incorporated Banks (JIBs) and Overseas Incorporated Banks (OIBs), covering quarterly and year-end Prudential Returns and related auditor reporting.

• Quarterly returns: JIBs and OIBs must complete Prudential Returns as at 31 March, 30 June, 30 September and 31 December each year, submitted within 20 working days of the relevant date.
• Year-end return and audit: A year-end Prudential Return must be produced and provided to the JIB Auditor or Branch Auditor, who must prepare and sign a report addressing whether the return is incorrect or misleading, which is then submitted to the JFSC together with financial statements and directors' reports.
• Processes and controls: Registered Persons must maintain robust, documented processes for producing Prudential Returns, assign sign off and oversight responsibility, and keep records as business records.
• Consolidated reporting: JIBs with a material subsidiary that is itself a bank or non-Jersey financial services business must normally also submit a consolidated return alongside the solo return at financial year-end.
• Engagement letters: JIBs and OIBs must document instructions to their auditor in an engagement letter covering specified matters (control framework, staff competence, IT shortcomings, backups, reconciliation to financial statements) and provide a copy to the JFSC with the auditor's report.
• Notification of delay: A JIB or OIB that becomes aware it is likely to miss a reporting deadline must notify the JFSC immediately; extensions may be granted under Article 17 of the BAO.
• Offences: Contravention of the statutory reporting requirements is a criminal offence attracting a fine, and knowingly or recklessly providing false or misleading information is an offence under Article 22 of the Banking Law.

The Code also provides guidance referencing Basel Committee external audit guidelines and ISAE 3000 for the level of assurance expected, and confirms that variations or exemptions from Code requirements may be requested from the JFSC in writing.

Key obligations

• JIBs and OIBs must submit quarterly Prudential Returns as at 31 March, 30 June, 30 September and 31 December each year, within 20 working days of the relevant date.
• JIBs and OIBs must produce a year-end Prudential Return and provide it to their JIB Auditor or Branch Auditor for audit.
• The JIB/Branch Auditor's signed report on the Prudential Return must be provided to the JFSC together with financial statements, directors' report and related auditor's reports.
• Registered Persons must maintain robust, documented processes for producing Prudential Returns, with established sign-off and oversight responsibility, and retain records as business records.
• JIBs with a material subsidiary that is a bank or non-Jersey financial services business must normally also submit a consolidated return alongside the solo return at year end.
• A JIB or OIB must notify the JFSC immediately if it becomes aware it is likely to fail to meet a reporting deadline.
• JIBs and OIBs must document instructions to their auditor in an engagement letter covering specified review matters and provide a copy to the JFSC with the auditor's report.
• Registered Persons must establish responsibility for addressing issues arising from prior audit reports.
• Where a JIB wishes to include interim profits in Tier 1 capital, the Prudential Return must be accompanied by an interim audit report from the JIB auditor.
• Capital and liquidity adequacy must be monitored daily by JIBs and OIBs.

Applies to

Jersey Incorporated Banks (JIBs), Overseas Incorporated Banks (OIBs), Registered Persons under the Banking Law, JIB Auditors, Branch Auditors

Deadlines

• within 20 working days of the date with respect to which the return was prepared: Deadline for JIBs and OIBs to submit quarterly and year-end Prudential Returns to the JFSC.
• 31 March, 30 June, 30 September, 31 December each year: Quarterly Prudential Return reporting dates for JIBs and OIBs.
• 23 February 2024: Effective date of the Prudential Reporting Code for all Registered Persons.

Related documents

• This document is made under Banking Business (Jersey) Law 1991