Consultation Paper No. 7 2020 - Banking Business (Jersey) Law 1991: Deposit-taking fees

Summary

This is a JFSC consultation paper seeking industry views on how to raise the 2020 and 2021 annual banking fee income (budgeted at 2.16 million pounds) from deposit-taking businesses registered under the Banking Business (Jersey) Law 1991. It sets out five alternative fee-charging mechanisms and invites comment rather than immediately changing any fee. Responses were due by 11 November 2020, and the JFSC indicated it intended to publish feedback and a final fees notice to take effect on or before 30 November 2020.

• Option 1: Increase fee rates within the current mechanism, applying proportional increases across all banks.
• Option 2: Introduce a subsidiary charge to differentiate fees between branches and subsidiaries.
• Option 3: Introduce new consolidated income bands, including higher bands for banks with income well above 20 million pounds.
• Option 4: Introduce on-island balance sheet asset bands as an alternative or supplement to income bands.
• Option 5: A blended approach combining elements of the above, including staggered branch/subsidiary fees and above-inflation increases to certain components.

The paper also flags that a possible future Jersey Resolution Authority role for the JFSC could require an additional levy of up to roughly 12 percent on banking fees, to be consulted on separately, and that banks facing Covid-19 related financial constraints are encouraged to contact their supervisors. No fees are being finalised by this document itself; it is a request for input on options.

Key obligations

• Interested parties, including the Jersey Bankers Association as representative body, are invited to submit comments on the proposed fee options to Jersey Finance Limited or the JFSC by 11 November 2020.
• Firms experiencing Covid-19 related financial constraints affecting ability to pay increased fees are encouraged to contact their supervisors at the earliest opportunity.

Applies to

banks registered to undertake deposit-taking business under Article 9 of the Banking Business (Jersey) Law 1991, Jersey Incorporated Banks adopting advanced approaches (internal models)

Deadlines

• 11 November 2020: Deadline for responses/comments on the consultation paper to be received by Jersey Finance Limited or the JFSC.
• on or before 30 November 2020: Target date by which the JFSC indicated the final fees notice arising from this consultation would take effect.