Sound Business Policy

Summary

This is the JFSC's Sound Business Policy, which identifies activities considered sensitive or reputationally risky to Jersey and explains how these are factored into the Commission's decisions on Control of Borrowing (Jersey) Order 1958 (COBO) consents and into ongoing supervision of financial services businesses. The listed activities are not prohibited, but they trigger enhanced scrutiny, additional information requests and possible delays in processing applications.

• Who must apply the policy: Anyone applying to the JFSC for a COBO consent under Articles 1, 2, 3, 4, 4A, 5, 5A, 8, 9, 10, 11 and 11A, including applications relating to cryptocurrencies, initial coin offerings or tokenisation of real world assets, and applications for transfer of a Reserved Company.
• Financial services businesses: Registered persons and certificate holders under the Codes of Practice for fund services business, investment business, trust company business and certified funds must have due regard to the SBP, regardless of the incorporation jurisdiction of the entity being serviced; this also extends to alternative investment funds and AIF services businesses.
• AML/CFT obligations: All financial services businesses registered with the JFSC for financial crime purposes must consider the SBP when completing the customer risk assessment and business risk assessment required under the AML/CFT/CPF Handbook, unless exempted under the Proceeds of Crime (Low Risk Financial Services Business) (Jersey) Order 2024.
• Disclosure duty: Applicants must indicate on their application form whether the entity, or any subsidiary, wholly owned subsidiary or holding body, carries out any activity listed in the Appendix table (defence, pharmaceuticals, dual use goods, mining/drilling/quarrying, or financial services business regulated in Jersey but not in the target market), and must disclose any direct or indirect exposure to such activities.
• Effect of exposure: Where a listed activity is identified, the JFSC may request additional information or verification, which can delay processing and may rule out fast-track or one-day incorporation/registration; the JFSC may liaise with the applicant's legal advisors (with authority) to obtain information.

The policy applies whether the sensitive activity is carried out in Jersey or elsewhere, by a Jersey-incorporated or registered person, or otherwise. It operates alongside Jersey's Statement on Financial Services and Financial Crime risk appetite framework and reflects FATF expectations on vigilance regarding high-risk and suspended jurisdictions.

Key obligations

• Applicants for relevant COBO consents (Articles 1, 2, 3, 4, 4A, 5, 5A, 8, 9, 10, 11, 11A) must submit a completed application form disclosing proposed activities.
• Applicants must indicate on the application form whether the entity or any subsidiary, wholly owned subsidiary or holding body carries out any activity listed in the Sound Business Policy table, and disclose any direct or indirect exposure to such activities.
• Registered persons and certificate holders subject to the JFSC Codes of Practice (fund services, investment business, trust company business, certified funds) must have due regard to the Sound Business Policy principles, irrespective of the entity's incorporation jurisdiction.
• Financial services businesses registered with the JFSC for financial crime purposes must consider the Sound Business Policy when completing customer risk assessments and business risk assessments, unless exempted under the Proceeds of Crime (Low Risk Financial Services Business) (Jersey) Order 2024.
• Applicants whose activities align with cryptocurrency, initial coin offering, or real-world asset tokenisation activity must ensure alignment with the JFSC's related guidance.

Applies to

COBO consent applicants, external bodies corporate, fund services businesses, investment businesses, trust company businesses, certified funds, alternative investment funds and AIF services businesses, registered persons and certificate holders, financial services businesses registered for financial crime purposes