Bank licensing policy

Summary

This is the Jersey Financial Services Commission's policy setting out the criteria it uses to assess applications for a banking licence under the Banking Business (Jersey) Law 1991 (BBJL). It applies to any firm seeking to be licensed to take deposits in Jersey, whether an internationally active banking group establishing a subsidiary or branch, or a wholly new Jersey start-up bank.

• Core considerations: All applicants must undergo fit and proper assessment of directors, controllers and associated persons, provide a full and transparent ownership structure, and demonstrate competence and adequate systems and controls, including AML/CFT/CPF and Banking Code compliance.
• Controllers and directors: Prospective directors and controllers, including shareholder controllers, must obtain a 'no objection' decision from the JFSC as part of the application.
• Internationally active banking groups: Applicants must generally show a minimum five year satisfactory track record as a supervised banking business, a satisfactory audit history, a stable management team, investment grade credit rating (or group rating), and that the home jurisdiction applies equivalent AML/CFT standards and adequate consolidated supervision; authorisation depends on receiving home supervisor confirmation.
• Jersey start ups: Shell banks are prohibited; applicants must demonstrate genuine physical presence in Jersey involving meaningful decision-making and management, and address financial soundness (capital, liquidity, large exposures) within their internal capital adequacy assessment.
• Restricted licence / mobilisation: Where an applicant needs time to build systems before accepting deposits, the JFSC may grant a restricted licence subject to conditions, which will only be lifted once full compliance is evidenced.

The policy is applied flexibly overall, but a limited set of requirements marked 'must' are mandatory. It does not cover bank resolution or resolvability, which falls under separate legislation (JRDCA).

Key obligations

• Applicants must provide a comprehensive and transparent ownership structure identifying all intermediate and significant ultimate owners.
• Prospective directors and controllers, including shareholder controllers, must submit 'no objection' applications to the JFSC as part of the licensing process.
• Applicants must demonstrate they are, and will remain, competent to undertake deposit-taking business and comply with relevant regulatory requirements.
• Applicants must be structured and organised so as to enable JFSC oversight.
• Internationally active banking group applicants must demonstrate full ability to adhere to Jersey regulations including the BBJL, Banking Code and AML/CFT/CPF Handbook.
• The group to which an internationally active applicant belongs must be subject to consolidated supervision by its home supervisor, and the JFSC must receive the home supervisor's confirmation of agreement before authorisation.
• Jersey start-up applicants must demonstrate genuine physical presence in Jersey involving meaningful decision-making and management, as shell banks are not permitted.
• Applicants under a restricted licence must evidence full compliance before restrictions are removed.

Applies to

banks, applicants for a banking licence, internationally active banking groups, Jersey start-up banks, directors, controllers and shareholder controllers of applicant banks