Fund Services Business Code of Practice

Summary

This Code of Practice, issued by the Jersey Financial Services Commission under Article 19 of the Financial Services (Jersey) Law 1998, sets out the principles and detailed rules that all persons registered to carry on fund services business in Jersey must follow. It covers conduct, governance, financial resources and dealings with the JFSC, and is used by the JFSC as part of its ongoing fit and proper assessment of registered persons.

• Integrity and Fund interests: Registered persons must conduct business with integrity and have due regard for the interests of the Fund they service.
• Governance and controls: Must organise and control their affairs effectively, maintain adequate risk management systems, corporate governance, internal systems and controls, staff integrity/competence, CPD, a Compliance Officer and MLRO, a complaints procedure, and record keeping.
• Transparency: Must be transparent in business arrangements with the Fund, including via Fund Services Business Agreements.
• Financial resources and insurance: Must maintain adequate financial resources (calculated per the First Schedule's Adjusted Net Liquid Assets/Expenditure Requirement methodology) and adequate professional indemnity insurance.
• Dealing with the JFSC: Must deal with the JFSC in an open and co-operative manner, including providing information requested under Article 8 of the Financial Services Commission (Jersey) Law 1998.
• No misleading statements: Must not make statements that are misleading, false or deceptive.
• AIF Code overlap: Where relevant (e.g. AIF services business exempt persons, or depositaries under the AIFM Directive/UK AIFM Regulations), must also comply with applicable sections of the AIF Code.
• Consents required: Certain actions require prior written JFSC consent, including a change in the manager of a managed entity, excluding a long-term subordinated loan from the ANLA calculation, and the level of run-off PII cover on ceasing a class of business.

The Code also applies a lighter-touch regime to managed entities acting for Qualifying Funds, which are subject only to its core principles unless they elect to comply in full. Registered persons unable to achieve full compliance temporarily must agree a remediation plan and timescale with the JFSC in advance.

Key obligations

• Conduct fund services business with integrity and due regard for the interests of the Fund
• Organise and control affairs effectively, demonstrating adequate risk management systems, corporate governance and internal controls
• Maintain and be able to demonstrate integrity and competence of staff, and provide Continuing Professional Development
• Appoint a Compliance Officer and a Money Laundering Reporting Officer
• Maintain a complaints handling procedure and adequate record keeping
• Maintain adequate financial resources calculated using the ANLA/Expenditure Requirement methodology in the First Schedule, keeping ANLA at least 110% of the Expenditure Requirement
• Notify the JFSC if the ratio of ANLA to Expenditure Requirement falls below 130%
• Maintain adequate professional indemnity insurance, including appropriate run-off cover on cessation of a class of business (subject to JFSC consent on cover level)
• Be transparent in business arrangements with the Fund, including through Fund Services Business Agreements
• Deal with the JFSC in an open and co-operative manner and provide information requested by the JFSC
• Not make misleading, false or deceptive statements
• Where relevant, comply with the applicable sections of the AIF Code
• Obtain prior written JFSC approval before changing the manager of a managed entity
• Obtain JFSC consent before excluding a long-term subordinated loan from the ANLA calculation
• Agree a documented plan of action with the JFSC in advance if unable to achieve full compliance with the Code for a temporary period

Applies to

registered persons carrying on fund services business, managers of managed entities, depositaries appointed under the AIFM Directive or UK AIFM Regulations, AIF services business providers exempt under the FS(J)L

Related documents

• This document is made under Financial Services (Jersey) Law 1998