Feedback on Consultation No. 3 2022: Senior Management Functions

Summary

This is a feedback paper from the Jersey Financial Services Commission summarising responses to its 2022 consultation on which senior managers within regulated firms should fall within scope of the JFSC's civil financial penalties regime. It explains the four final categories of 'senior management function' adopted in the JFSC's statutory Notice and clarifies the practical steps (or lack thereof) expected of firms before the Notice takes effect.

• Category 1: A person managing any aspect of a registered person's local AML/CFT compliance or risk function, sitting below board level but above a Key Person role.
• Category 2: A person below board level, reporting directly to the board or a Principal Person, with responsibility for applying AML/CFT arrangements and able to exercise significant influence over money laundering/terrorist financing risk decisions.
• Category 3: A person (alone or jointly, including committee members) carrying out a duty or responsibility that the Money Laundering Order or an AML/CFT Code of Practice requires senior management to perform, regardless of residency.
• Category 4: A person appointed as the 'senior officer' of a bank under Article 11(2)(a) of the Banking Business (General Provisions) (Jersey) Order 2002.
• MLROs: MLROs and deputy MLROs are already in scope of the civil financial penalties regime via a 2022 amendment to the Commission Law and do not need separate inclusion in the Notice.

The final Notice designating these senior management functions was published on 12 January 2023 and comes into effect on 13 March 2023. No immediate personal questionnaire (PQ) or notification obligations are imposed on Registered Persons or Senior Managers; the JFSC has separately indicated it intends 'in due course' to seek a legislative change bringing Senior Managers into the statutory no-objection regime, but no timetable has been set. As a matter of best practice, Registered Persons are encouraged to identify employees falling within the four categories and notify those employees, but should not report this information to the JFSC or submit PQs at this time.

Key obligations

• Registered Persons should, as a matter of best practice, identify which employees fall into one of the four senior management function categories in the Notice and notify those employees accordingly.
• Registered Persons should not, at this time, advise the JFSC who they consider their Senior Managers to be.
• Senior Managers should not submit personal questionnaires (PQs) to the JFSC at this time.

Applies to

Registered Persons, banking business, trust company business, fund services business, investment business, money service business, general insurance mediation business, Senior Managers, Principal Persons, Key Persons (compliance officers, money laundering compliance officers, MLROs)

Deadlines

• 13 March 2023: Date the final Notice designating senior management functions comes into effect.
• 12 January 2023: Date the final form of the statutory Notice was published by the JFSC.