Financial Services (Fund Services Business (Accounts, Audits and Reports)) (Jersey) Order 2007

Summary

This Order sets out detailed accounting, audit and reporting requirements for persons registered under the Financial Services (Jersey) Law 1998 to carry on fund services business. It covers approval of accounting periods, record keeping, appointment of auditors, preparation of financial statements and declarations, and reporting obligations to the Jersey Financial Services Commission.

• Accounting periods: Registered persons must apply to the Commission for approval of a first accounting period (maximum 18 months) and subsequent periods (normally 12 months), and cannot change an approved period without Commission approval.
• Accounting records: Registered persons must keep accounting records showing all transactions, enabling preparation of financial statements and disclosure of financial position and compliance with financial resources requirements; records must be securely stored, backed up, and retained for at least 10 years.
• Auditor appointment: Registered persons must not engage an auditor unless approved by the Commission; on termination of an auditor's appointment, the auditor must notify the Commission within 7 days of any relevant circumstances.
• Financial statements and declarations: Registered persons must provide their auditor with financial statements and a declaration after each accounting period, and the auditor must prepare reports on both.
• Declaration content: The declaration must state compliance with the Law, applicable Orders and Codes of Practice, proper accounting records, and money laundering law requirements, detailing any material failures and remedial measures.
• Reports to the Commission: Registered persons must provide financial statements to the Commission within 4 months of the end of the accounting period (extendable to up to 8 months in special circumstances agreed with the Commission), accompanied by the declaration, auditor's report, and details of any relevant internal control reports.
• Financial statement standards: Financial statements must be prepared in accordance with International Financial Reporting Standards, UK GAAP, or another standard agreed with the Commission, and must show a true and fair view of the registered person's affairs and profit or loss.
• Consolidated statements: Affiliated members of a Jersey based group may satisfy financial statement obligations by providing consolidated group financial statements, subject to conditions.
• Exemptions: The Commission may exempt a registered person from all or part of Articles 2 to 9 if satisfied no client is likely to be prejudiced, subject to any conditions imposed.
• Reporting of concerns: Auditors, accountants and other reporting persons must communicate to the Commission circumstances giving reasonable cause to believe grounds for revocation exist or that a client has incurred or is at significant risk of material loss due to a breach of requirements or internal controls.

Breach of most substantive obligations (accounting period approval, record keeping, auditor appointment, provision of financial statements, auditor cooperation, false declarations) is a criminal offence punishable by a fine. Transitional provisions modified certain obligations for persons already holding permits under the earlier 1988 Law around the Order's 14 November 2007 commencement, including an extended 10 month filing period for accounting periods ending before 1 December 2009.

Key obligations

• A person applying for registration to carry on fund services business must apply to the Commission for approval of a first accounting period (not more than 18 months) and the following accounting period.
• A registered person must not change an approved accounting period without the Commission's approval.
• A registered person must keep accounting records showing and explaining all transactions, enabling preparation of financial statements and disclosure of financial position and compliance with financial resources requirements.
• A registered person must store accounting records securely, protect them from unauthorized access, and back up or duplicate them.
• A registered person must retain accounting records and backup copies for at least 10 years from the date they were made.
• A registered person must not employ or engage an auditor unless that auditor is approved by the Commission.
• An auditor whose appointment is terminated must, within 7 days of termination, provide the Commission a statement on whether there are circumstances relating to the termination that should be brought to its attention.
• A registered person must provide its auditor with financial statements and a declaration as soon as practicable after the end of each accounting period.
• A registered person must give its auditor access to records, documents, information and explanations requested for the purposes of the Order.
• A registered person must not make misleading, false or deceptive statements to its auditor.
• A registered person's declaration must address compliance with the Law, applicable Orders and Codes of Practice, proper accounting records, and money laundering law requirements, and detail any material failures and remedial measures.
• A registered person must not include misleading, false or deceptive statements in a declaration.
• A registered person must provide financial statements to the Commission within 4 months after the end of the accounting period, or within an agreed extended period of up to 8 months in special circumstances.
• Financial statements provided to the Commission must be accompanied by a declaration, auditor's report, and (where available) details of relevant internal control reports from auditors, accountants or consultants.
• Financial statements must be prepared in accordance with IFRS, UK GAAP, or another standard agreed with the Commission, and must give a true and fair view of the registered person's state of affairs and profit or loss.
• Auditors, accountants and other reporting persons must communicate to the Commission circumstances giving reasonable cause to believe a ground for revocation of registration has occurred or may occur, or that a client has incurred or is at significant risk of material loss due to certain breaches.
• For accounting periods ending before 1 December 2009, relevant persons transitioning from the 1988 Law must provide financial statements within 10 months after the end of the accounting period.

Applies to

registered persons carrying on fund services business, auditors, accountants, consultants

Deadlines

• within 4 months after the end of the accounting period: Deadline for registered persons to provide financial statements to the Commission (extendable to up to 8 months by agreement with the Commission in special circumstances).
• within 7 days of the termination: Deadline for an auditor whose appointment is terminated to provide the Commission a statement on relevant circumstances.
• at least 10 years from the date the records were made: Minimum retention period for accounting records and backup copies.
• 14 November 2007: Commencement date of the Order and reference point for transitional provisions applying to persons previously holding permits under the Collective Investment Funds (Jersey) Law 1988.
• accounting periods ending before 1st December 2009: Transitional extended deadline of 10 months after the end of the accounting period for providing financial statements, instead of the standard 4 months.

Related documents

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