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 JFSC's required annual banking fee income of 2.16 million pounds for both 2020 and 2021. It applies to any person applying for, or already holding, a registration to undertake deposit taking business under Article 9 of the Banking Business (Jersey) Law 1991. The paper does not itself change fees; it sets out several strategic options and invites comment before a final fees notice is issued.

• Option 1: Increase fee rates within the current mechanism (proportionate increase for all banks based on consolidated income bands).
• Option 2: Introduce a subsidiary charge to address disproportionate impacts between branches and subsidiaries.
• Option 3: Introduce new consolidated income bands, particularly for banks with income well above 20 million pounds.
• Option 4: Replace income bands with on-island balance sheet asset bands to better reflect supervisory risk profile.
• Option 5: A blended approach combining balance sheet asset bands with staggered branch/subsidiary fees and above inflation increases to the branch/subsidiary component.
• Jersey Resolution Authority (JRA): If the JFSC is appointed as the JRA (expected decision in 2021), banks may face an additional levy of roughly 12 percent, to be consulted on separately, potentially invoiced in Q3 2021 or mid 2021.
• Advanced approaches: Banks adopting internal models (advanced approaches) will need to agree bespoke fees bilaterally with the JFSC to cover specialist supervisory costs.

The JFSC asks respondents which strategic option would best balance fairness to the banking industry with meeting its budgeted 2020 and 2021 fee income. Firms facing financial constraints due to Covid-19 are encouraged to contact their supervisors. The final fees notice was expected to take effect on or before 30 November 2020, with firms notified separately on using the myJFSC portal for invoices.

Key obligations

• Interested parties, including registered and prospective deposit taking businesses, are invited to submit comments on the proposed fee options to Jersey Finance Limited or the JFSC by 11 November 2020.
• Banks experiencing Covid-19 related financial constraints affecting their ability to pay increased fees are encouraged to contact their supervisors at the earliest opportunity.

Applies to

banks, deposit-taking businesses registered 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 to the consultation to be received by Jersey Finance Limited or the JFSC.
• on or before 30 November: Expected date the final banking fees notice will take effect following the consultation.
• Q3 2021 / mid-2021: Possible timing for invoicing an additional JRA-related levy on banks, subject to further consultation.