Trust Company Business Code of Practice

Summary

This Code of Practice, issued by the Jersey Financial Services Commission under the Financial Services (Jersey) Law 1998, sets out binding conduct, governance and prudential requirements for firms registered to carry on trust company business in Jersey. It is built around seven high-level principles (integrity, customer interests, effective organisation and risk management, transparency, adequate financial resources and insurance, openness with the JFSC, and no misleading statements), each supported by detailed enforceable rules.

• Corporate governance: Registered persons must maintain an adequate regulatory span of control (at least three appropriately skilled, independent individuals where entitled to control trust company business assets) and clearly apportioned responsibilities among directors, key persons and senior managers.
• Customer interests and delegation: Firms must act with due skill, care and diligence, manage conflicts of interest, evidence discretionary decisions in writing, and only delegate duties to appropriate persons with proper documentation, monitoring and due diligence.
• Systems, competence and CPD: Requires internal systems and controls, a compliance function with a Compliance Officer, Money Laundering Reporting Officer and Money Laundering Compliance Officer, staff competence standards, and continuing professional development.
• Complaints and record keeping: Registered persons must operate complaints-handling procedures and maintain adequate records, including in relation to payment of financial penalties.
• Financial resources and insurance: Firms must maintain and be able to demonstrate adequate financial resources (including Adjusted Net Liquid Assets calculations per the Second Schedule) and adequate professional indemnity insurance, including run-off cover on cessation of business.
• Dealings with the JFSC: Registered persons must deal with the JFSC openly and co-operatively, including notifying the JFSC in writing of specified matters (email or the JFSC's online portal is acceptable unless a provision specifies otherwise).
• Prohibition on misleading conduct: Registered persons must not make statements, or engage in advertising, that are misleading, false or deceptive.
• Variances: Registered persons conducting only a single class of trust company business may apply in writing for amended requirements under the Third Schedule, and other specific variances (e.g. to financial resource calculations, professional qualifications) may be sought via written application as set out in the Fourth Schedule (Table of Consents).

Breach of the Code does not itself create civil liability but is grounds for JFSC regulatory action, which can include written directions, financial penalties, public statements, or in serious cases revocation of registration. Where full compliance cannot be achieved (e.g. shortly after first registration), the registered person should agree a written action plan with the JFSC in advance.

Key obligations

• Maintain a regulatory span of control of at least three appropriately skilled, independent individuals where the registered person is entitled to control trust company business assets
• Clearly apportion responsibilities among directors/partners, key persons, senior managers and employees and adequately monitor and control the business at senior management and board level
• Only delegate duties/powers to appropriate persons for a proper purpose, with documented expiry or review terms, ongoing monitoring, and due diligence on the delegatee
• Implement adequate procedures to avoid or manage conflicts of interest and keep records of conflicts that arise
• Evidence in writing any decision made in the exercise of discretion or powers on behalf of customers
• Operate an effective complaints handling procedure and maintain adequate records, including of complaints and financial penalty payments
• Maintain a compliance function with an appointed Compliance Officer, Money Laundering Reporting Officer and Money Laundering Compliance Officer
• Ensure trust company business employees meet qualification requirements and undertake continuing professional development
• Maintain and be able to demonstrate adequate financial resources (including required ANLA calculations) and adequate professional indemnity insurance, including arranging run-off PII cover when ceasing a class of business
• Notify the JFSC in writing of specified matters as required under the Code
• Not make statements or advertisements that are misleading, false or deceptive
• Ensure, as far as possible, that the Jersey regulatory framework is applied to overseas subsidiaries, branches, brokers or intermediaries, and bring significant conflicts with host jurisdiction requirements to the JFSC's attention
• Agree a written action plan with timescales with the JFSC where full compliance with the Code cannot be achieved, e.g. temporarily after first registration

Applies to

registered persons (trust company business), trust company business employees, principal persons, key persons

Deadlines

• 1 June 2019: Revised Code became effective from this date for all registered persons
• 1 January 2008: Original effective date of the Code of Practice for Trust Company Business

Related documents

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