Civil Financial Penalties on Registered Persons: Methodology for determining the amount

Summary

This JFSC policy document sets out the methodology the Jersey Financial Services Commission will use to calculate the amount of a civil financial penalty imposed on a registered person for a significant and material contravention of the Money Laundering (Jersey) Order 2008 or a JFSC Code of Practice. It does not create new obligations for registered persons but explains, step by step, how the JFSC exercises its statutory discretion under Article 21B of the Financial Services Commission (Jersey) Law 1998 when quantifying penalties.

• Penalty bands: Four bands apply depending on the nature of the contravention, with maximum penalties ranging from the lower of 4% of average annual turnover or £100,000 (Band 1) up to 8% of average annual turnover (Band 3, intentional or reckless contraventions).
• 14 step process: The methodology runs through 14 steps: judging seriousness (Step 1, scored 1 to 5 against the JFSC's Guiding Principles), adjustments for knowledge of the contravention, voluntary reporting, remediation, other aggravating/mitigating factors, disgorgement of profit, consistency with prior cases, application of the statutory maximum, consideration of financial consequences to the person and third parties, and any early settlement discount.
• Appeal right: A registered person may appeal to the Royal Court against the imposition or amount of a penalty on the ground the JFSC's decision was unreasonable (Article 21F of the Commission Law).
• Worked example: Appendix 3 provides an illustrative worked example showing how the steps combine to produce a gross calculation, a maximum-adjusted amount, an actual penalty, and a discounted settlement penalty.

Because this is a methodology/policy statement rather than a rule imposing new compliance duties, it mainly affects how penalties are calculated once a contravention has already been established, though it references existing duties (such as open and co-operative dealing with the JFSC) that can affect the size of any penalty.

Applies to

registered persons