Banking Business (Accounts, Auditors and Reports) (Jersey) Order 2023

Summary

This Order sets out detailed requirements for banks registered under the Banking Business (Jersey) Law 1991 regarding the appointment of auditors, maintenance of accounting records, preparation of declarations and directors' reports, and the provision of financial statements and prudential returns to the Jersey Financial Services Commission. It replaces or supplements earlier regimes and creates specific offences for non-compliance.

• Auditor appointment: Jersey incorporated banks and overseas incorporated banks (including via a Jersey branch auditor) must appoint an auditor, assess the proposed auditor's skills, resources and experience, and notify the Commission before appointment.
• Commission objection powers: The Commission may object to an auditor or proposed auditor; registered persons must remove an auditor promptly once an objection notice takes effect, subject to a right of appeal to the Court within one month.
• Access and information for auditors: Registered persons must give auditors access to records and provide information and explanations the auditor needs.
• Termination notifications: Registered persons must notify the Commission without delay of an auditor's termination, and the outgoing auditor must send a statement or report to the Commission within 7 days of termination taking effect.
• Accounting periods: Jersey incorporated banks must apply for Commission approval of their first (up to 18 months) and subsequent accounting periods; overseas incorporated banks must notify the Commission of their accounting period before it starts and of any change before it takes effect.
• Accounting records: Registered persons must keep accounting records showing all transactions, secure them against loss or unauthorised access, back them up, and retain records for at least 10 years.
• Declarations and directors' reports: After each accounting period, a declaration (signed by a director or principal manager) and a directors' report covering director changes and a summary of activities must be prepared.
• Provision to auditors and Commission: Financial statements, declarations, directors' reports and prudential returns must be provided to the auditor as soon as practicable, and financial statements, declarations and reports must be provided to the Commission.
• Direct reporting to the Commission: Auditors and other reporting persons must report directly and immediately to the Commission where they become aware of circumstances that could prejudice depositors, including suspected fraud, misappropriation, or reckless management, without informing the registered person first.
• Offences: Contravention of key provisions (appointment, access, accounting records, accounting period notifications, misleading statements to auditors, termination reporting) constitutes an offence liable to a fine.

Transitional provisions deem existing auditors to have been validly appointed under the new Order, and registered persons relying on prior exemptions or variations must notify the Commission within 3 months of the relevant commencement date to preserve them. The Order commenced in stages between 8 August 2023 and 8 November 2023.

Key obligations

• A Jersey incorporated bank and an overseas incorporated bank must appoint an auditor and take reasonable steps to assess the proposed auditor's skills, resources and experience before appointment, notifying the Commission of the intended appointment.
• A registered person must allow its auditor access to accounting and other records at all times and provide information and explanations the auditor requires.
• A registered person must notify the Commission without delay of the termination of an auditor's appointment, stating the effective date and reason.
• An auditor must, within 7 days of termination taking effect (or a longer period allowed by the Commission), send the Commission a statement confirming no reportable circumstances or a report of such circumstances.
• A Jersey incorporated bank applying for registration must apply for Commission approval of its first accounting period (not more than 18 months) and subsequent accounting period, and must not change its accounting period without Commission approval.
• An overseas incorporated bank must notify the Commission of its first accounting period before it starts and of any change in accounting period before the change takes effect.
• A registered person must keep accounting records showing and explaining all transactions, secure them against loss, corruption or unauthorised access, back them up, and retain records and backups for at least 10 years.
• A Jersey incorporated bank or overseas incorporated bank must prepare a declaration after each accounting period, signed by a director or principal manager, addressing compliance with the Law, Orders, codes of practice, accounting record adequacy, and anti-money laundering/counter-terrorist financing requirements, including details of any material failures and remedial measures.
• A Jersey incorporated bank and overseas incorporated bank must prepare a directors' report after each relevant accounting period containing prescribed information about directors and bank activities.
• A registered person must provide its auditor, as soon as practicable after each relevant accounting period, with the financial statements, declaration, directors' report and prudential return.
• Financial statements, declarations and reports must be provided to the Commission at the same time as required under the Order.
• Auditors and other reporting persons must immediately report directly to the Commission, without informing the registered person, where they become aware of circumstances that could prejudice depositors' interests, including suspected fraud, misappropriation or reckless management by directors or senior management.
• Registered persons relying on an existing exemption or variation corresponding to a requirement under the Code or the Banking Business (General Provisions) (Jersey) Order 2002 must notify the Commission of that exemption or variation within 3 months after Article 20(2) comes into force to preserve it.

Applies to

Jersey incorporated banks, overseas incorporated banks, Jersey branches of overseas incorporated banks, registered persons carrying on deposit-taking business, auditors (including Jersey branch auditors)

Deadlines

• within 7 days of termination taking effect: Auditor must send the Commission a statement or report following termination of appointment (or a longer period if allowed by the Commission).
• at least 10 years from the date records were made: Accounting records and backup copies must be retained.
• within one month from the date the notice was served: Deadline for a person aggrieved by a notice of objection to an auditor to appeal to the Court.
• within 3 months after the date Article 20(2) comes into force: Registered persons must notify the Commission of any existing exemption or variation under the Code or the 2002 Order to continue benefiting from it.
• 8 August 2023: Commencement of Article 1, Article 20(2) and Article 21 (7 days after the Banking Business (Amendment No. 9) (Jersey) Law 2022 comes into force).
• 8 September 2023: Commencement of all remaining provisions except Article 18(3) (one month and 7 days after the Banking Business (Amendment No. 9) (Jersey) Law 2022 comes into force).
• 8 November 2023: Commencement of Article 18(3) (3 months and 7 days after the Banking Business (Amendment No. 9) (Jersey) Law 2022 comes into force).

Related documents

• This document is made under Banking Business (Jersey) Law 1991
• This document is made under Financial Services (Jersey) Law 1998