Consultation Paper No. 3 2016 - MiFID II: whether to introduce an EU equivalent regime in Jersey

Summary

This is a Jersey Financial Services Commission consultation paper (Consultation No. 3 2016) seeking industry views on whether Jersey should adopt a MiFID II equivalent regime. It does not itself impose new rules; it explains the potential benefits (EU professional investor passporting) and costs of seeking equivalence, and asks stakeholders to comment.

• Purpose: Gathers stakeholder opinion on whether Jersey's investment business regime should seek to be judged MiFID II equivalent by the European Commission, which would allow passporting of services to EU professional investors.
• Potential changes discussed: If equivalence is pursued, changes would likely be needed to Jersey financial services legislation and the Commission's Codes of Practice (mainly the Code of Practice for Investment Business), including areas such as definitions of financial instruments, corporate governance, prudential requirements, conduct of business, systems and controls, transaction reporting, and incorporation of parts of EMIR.
• Scope of impact: All Registered Persons holding an Investment Business (IB) licence under the Financial Services (Jersey) Law 1998 are within the scope of MiFID II considerations; some currently unregulated persons or exempt activities could become subject to new licensing requirements if equivalence is adopted.
• Proposed approach: Any Jersey MiFID II equivalent regime would be proportionate, switching off provisions for activities not present in Jersey (e.g. trading venues), with a Ministerial Order mechanism to switch them on later if needed, and would apply uniformly to all clients regardless of EU residency.

The paper is purely consultative at this stage: it invites written comments on a series of questions (listed in the paper) about whether Jersey should pursue MiFID II equivalence, and does not create binding obligations. Responses feed into the Commission's decision on next steps.

Applies to

Investment Business (IB) Registered Persons, Registered Persons holding a licence under the Financial Services (Jersey) Law 1998, potentially unregulated persons carrying out MiFID defined investment activities

Deadlines

• 15 July 2016: Deadline for comments to reach Jersey Finance Limited (co ordinating an industry response) for inclusion in the collective industry submission.
• 22 July 2016: Deadline for responses sent directly to the Commission (John Charles Cronin) rather than via Jersey Finance.