Feedback on Consultation No. 4 2021 - Decision-Making Process (2022-02)

Summary

This is a feedback paper responding to Consultation No. 4 2021, in which the JFSC proposed changes to the internal decision-making process (DMP) it follows before imposing a regulatory sanction (such as a public statement, civil financial penalty, or director/employee ban). The JFSC confirms it will adopt the proposed revised DMP largely as consulted on, with two minor clarificatory amendments, and will publish the finalised revised DMP together with an updated policy statement on regulatory settlements.

• Stage 2 replaced: The formal Review Committee stage is replaced by a quicker, less formal internal Executive review (a triage step deciding whether a case should proceed to the Board DMP Committee), with the decision made by an officer of at least Executive Director grade independent of the Enforcement Division.
• New decision-maker: Instead of the full Board, a rotating three-Commissioner Board DMP Committee will decide contested cases, meeting on an ad-hoc basis.
• Notice of Intent clarified: Any Notice of Intent will now be accompanied by a draft of the proposed directions/public statement (and the proposed civil financial penalty amount, if applicable) and will explain the reasons for the proposed sanction and the supporting material relied on.
• Representation period fixed: A Subject will be given one month to make written representations on a Notice of Intent, aligning with the Article 21C Commission Law timeframe for civil financial penalty notices.
• No new appeal tier: The JFSC declined to create an internal or tribunal appeal mechanism, relying instead on the existing statutory right of appeal to the Royal Court.

The revised DMP is a JFSC internal governance document rather than a set of direct compliance requirements for regulated firms; it primarily affects how enforcement cases against regulated businesses and individuals (Subjects) will be handled procedurally going forward. It will apply to Enforcement cases opened from the date the finalised revised DMP is published.

Key obligations

• A Subject who receives a Notice of Intent has one month within which to submit written representations before the Board DMP Committee proceeds

Applies to

banks, trust company businesses, investment businesses, fund services businesses, money service businesses, general insurance mediation businesses, DNFBPs (lawyers, accountants, estate agents), individuals and businesses subject to JFSC enforcement action

Deadlines

• one month: Time given to a Subject to make written representations on a Notice of Intent issued at the end of Stage 3 of the revised DMP
• date of publication of the revised DMP: The revised DMP will take effect for Enforcement cases opened from the date it is published