Consultation Paper No.6 2017 - Amendments to the Codes of Practice

Summary

This is a JFSC consultation paper proposing a package of amendments to nine sector-specific Codes of Practice (covering deposit-taking, funds, insurance, investment business, money service business and trust company business). It sets out proposed generic changes applying across most Codes plus code-specific changes, and invites industry comment before the amended Codes are finalised.

• Corporate governance review: Registered persons (other than under the AIF Code) would be required to regularly review corporate governance arrangements, including periodic self-assessment of board effectiveness.
• Qualified audit notification: Registered persons would have to notify the JFSC on a timely basis if their auditor qualifies the audit report or raises a matter of emphasis.
• Record-keeping: Records must be maintained as adequate, orderly and up-to-date (clarifying existing requirements).
• Definition of complaint: A formal definition of 'complaint' would be inserted into most Codes, modelled on the UK FCA definition.
• Risk management scope: Clarifies that Principle 3's reference to 'risk' covers all business risks, not only money laundering/terrorist financing risk.
• Fees and cooperation: Principle 6 (open and co-operative dealing with the JFSC) would be clarified to include timely provision of fee data and timely payment of fees.
• Cessation of Business Plans: Registered persons would need written JFSC confirmation of no objection before implementing a Cessation of Business Plan.
• Online portal use: Registered persons would be required to use the JFSC's online portal where specified, and to notify the JFSC within one business day of any systems failure preventing portal access.
• Code-specific amendments: Further changes are proposed to the AIF, Banking, Certified Funds, FSB, GIMB, IB, Insurance, MSB and TCB Codes individually, many aimed at aligning the TCB Code with the GIFCS Standard for trust and corporate service providers.

The JFSC intends to issue finalised amended Codes during Q4 2017, coming into force two months after issue, subject to consultation feedback. Interested parties are asked to comment, including on whether a two month lead-in period is adequate.

Key obligations

• Submit written comments on the proposed amendments to Jersey Finance Limited or the JFSC by 18 October 2017
• Once adopted, registered persons (excluding AIF Code entities where noted) must regularly review corporate governance arrangements and carry out periodic self-assessment of board effectiveness
• Once adopted, registered persons must notify the JFSC on a timely basis of any auditor qualification of, or matter of emphasis in, the audit report
• Once adopted, registered persons must maintain adequate, orderly and up-to-date records
• Once adopted, registered persons must obtain written confirmation from the JFSC that it has no objection to a Cessation of Business Plan before implementing it
• Once adopted, registered persons must use the JFSC's online portal for notifications/information where specified, and notify the JFSC within one business day if a systems failure prevents portal access
• Once adopted, registered persons must ensure timely provision of regulatory fee data and timely payment of fees due, as part of Principle 6 obligations

Applies to

registered persons, deposit-taking business (banks), fund services business, certified funds, alternative investment funds, general insurance mediation business, insurance business, investment business, money service business, trust company business

Deadlines

• 18 October 2017: Deadline for responses to the consultation paper, sent to Jersey Finance Limited or directly to the JFSC
• Q4 2017: Intended issue date for the finalised amended Codes of Practice
• two months after issue: The amended Codes are intended to come into force two months after they are issued