Equity Trust (Jersey) Limited (2015-07-16)

Summary

This is a public statement issued by the Jersey Financial Services Commission under Article 25 of the Financial Services (Jersey) Law 1998 concerning Equity Trust (Jersey) Limited. It sets out the findings of a Commission investigation into Equity's conduct as trustee of two non-charitable purpose trusts (Bacchus and Proteus) and as trustee/service provider to a group of collective investment funds investing in Eastern European property, spanning events from 2005 through 2014.

The statement is historical and enforcement-related rather than rule-making: it details due diligence failures, poor record-keeping, unmanaged conflicts of interest, inadequate cash-flow monitoring and a deficient complaint handling system, and finds Equity breached Principles 2, 3 and 6 of the Codes of Practice for Trust Company Business. It also records Equity's later cooperation, a 'Regulatory Healthcheck', a remediation plan, settlement offers to investors and a contribution towards the Commission's costs.

• Findings: Inadequate due diligence, unformalised and unmonitored loans, unmanaged conflicts of interest, poor accounting records, absence of cash-flow forecasting, inconsistent information to lenders, and no effective complaint handling system.
• Codes breached: Principle 2 (highest regard for customer interests), Principle 3 (effective organisation and risk management), and Principle 6 (open and co-operative dealings with the Commission).
• Remedial steps taken by Equity: Commissioned a Regulatory Healthcheck, implemented a Remediation Plan with TMF Group support, made settlement offers to fund managers/trustees and investors, and contributed to the Commission's investigation costs.

Applies to

trust company business, licensed fund services business