Feedback Paper on Follow-on Consultation to Consultation No. 6 2022 on Revised Outsourcing Policy (OSP)

Summary

This is a JFSC feedback paper responding to the Follow-on Consultation (Consultation No.6, 2022) on the Revised Outsourcing Policy (OSP). It summarises industry comments received, sets out the JFSC's responses, and confirms the final form of the Revised OSP, which is attached as an appendix and takes effect from 1 January 2024 after a six-month transition period.

• Scope of Funds: Jersey Private Funds and other funds with only a CoBO consent (including Non-Domiciled Funds and Unregulated Funds) are no longer caught by the OSP generally, but remain in scope for AML/CFT/CPF purposes (subject to an AMLSP carve-out), and the OSP still applies to such funds' Jersey service providers who are subject to Regulatory Laws.
• Data Centre and Cyber Security Services: The blanket exemption for these services is removed, meaning outsourcing of such services may now fall within the OSP notification regime.
• AMLSP exemption: An exemption is confirmed where an Anti-Money Laundering Services Provider (AMLSP) performs AML/CFT/CPF services for a registered AMLSP Direct Customer, provided stipulated conditions are met.
• Automated AML/CFT/CPF screening: An exemption is confirmed for Service Providers providing automated third-party AML/CFT/CPF screening services to a Business.
• Transition period: A six-month transition period applies before the Revised OSP becomes effective on 1 January 2024.
• Outsourcing Notification and Material Change process: The final Revised OSP clarifies when a new Outsourcing Notification (and No Objection) is required versus when a Material Change to Outsourcing Notification (via myJFSC) suffices, including where a Business becomes newly caught by the OSP.

The paper does not itself impose new substantive requirements beyond confirming the final Revised OSP text (in Appendix A, provided in clean and redline form) and its effective date; readers should consult that Revised OSP directly for the operative rules.

Key obligations

• Businesses with existing or new Outsourcing arrangements must comply with the final Revised OSP from its effective date of 1 January 2024.
• Businesses must submit an Outsourcing Notification via myJFSC and obtain a No Objection (where required) before proceeding with new Outsourced Activity.
• Businesses must submit a Material Change to Outsourcing Notification via myJFSC for material changes to an existing Outsourcing arrangement where a No Objection was previously granted or an Outsourcing Notification was previously submitted.
• Where a No Objection was not previously required but becomes required under the Revised OSP (e.g. a Supervised Person newly caught by the OSP), the Business must submit an Outsourcing Notification and obtain a No Objection before the Material Change process becomes relevant.
• Funds and their Jersey Service Providers (other than via an AMLSP) must comply with the OSP in relation to AML/CFT/CPF services, consistent with the Proceeds of Crime Supervisory Bodies Law and AML/CFT/CPF Handbook, following the end of the Schedule 2 transitional arrangements (30 June 2023).

Applies to

banks, trust company business, fund services business, investment business, insurance business, general insurance mediation business, money service business, Jersey Private Funds, Non-Domiciled Funds, Unregulated Funds, Anti-Money Laundering Services Providers (AMLSPs), Supervised Persons, virtual asset service providers

Deadlines

• 1 January 2024: Effective date of the final Revised Outsourcing Policy (OSP), following the six-month transition period.
• 30 June 2023: End of transitional arrangements for the re-cast Schedule 2 of the Proceeds of Crime (Jersey) Law 1999, after which all Fund and securities services activities become subject to Proceeds of Crime Supervisory Bodies Law and AML/CFT/CPF Handbook requirements.