Foundations (Mergers) (Jersey) Regulations 2009

Summary

This Jersey regulation sets out the legal framework allowing foundations to merge with one another, or with certain foreign bodies corporate designated as recognized entities, and to continue either as a new foundation, as one of the merging foundations, or as a recognized entity. It prescribes the agreements, notices, registrar and Commission approvals, and creditor protections required for each type of merger.

• Merger of foundations (Part 2): Two or more foundations may merge and continue as a new foundation or as one of the merging foundations, following a written merger agreement approved by the registrar.
• Merger with a recognized entity, continuing as a foundation (Part 3): A foundation may merge with a body corporate designated by the Minister as a recognized entity and continue as a foundation, subject to registrar approval.
• Merger with a recognized entity, continuing as a recognized entity (Part 4): A foundation may merge with a recognized entity and continue as that recognized entity, subject to permission from the JFSC (the Commission).
• Creditor and court protections: Notice of any merger agreement must be published and sent to creditors with claims over £5,000, the registrar and guardians; aggrieved persons may apply to the Royal Court to restrain a merger, and insolvent mergers require Royal Court approval.
• Offences: It is an offence to knowingly or recklessly provide false or misleading information or documents to the Commission or registrar, or to publish a misleading merger notice; failure by a qualified member to notify implementation under Regulation 34(1) is also an offence.

The Regulations impose procedural and disclosure obligations on the qualified members of merging foundations' councils rather than ongoing prudential requirements, and are enforced through registrar/Commission approval processes and statutory offences.

Key obligations

• Foundations intending to merge must first enter into a written merger agreement setting out the terms and means of the merger.
• Qualified members must jointly publish notice of the merger agreement within 28 days after the date of the agreement.
• Before or when publishing the notice, qualified members must send a copy to each creditor with a claim exceeding £5,000, to the registrar, and to the guardians of the merging foundations.
• Qualified members must supply a copy of the merger agreement to a qualifying creditor without charge if requested.
• If any merging foundation is not solvent, the qualified members must obtain an Act of the Royal Court confirming the merger is not prejudicial to creditors before applying to implement the agreement.
• Applications to the registrar or Commission to implement a merger agreement must be accompanied by the required fee, guardian approvals, evidence of notice compliance, and (where continuing as a new foundation) the proposed charter and related certificates.
• A qualified member must, as soon as reasonably possible after implementation of a merger agreement with a recognized entity, inform the Commission that it has been implemented and the date of implementation.
• Persons must not knowingly or recklessly provide false, misleading or deceptive information or documents to the Commission or registrar, or publish a misleading merger notice.

Applies to

foundations, recognized entities (bodies corporate incorporated or established outside Jersey designated by the Minister), qualified members of councils of foundations, guardians of foundations

Deadlines

• within 28 days after the date of the agreement: Qualified members must publish notice of the merger agreement.
• within 28 days after the first publication of the notice: A person aggrieved by the proposed merger may apply to the Royal Court for an order to restrain it.
• at least 28 days after the application is made: The Royal Court must not hear an application concerning an insolvent merging foundation before this period elapses.
• within 28 days: If the registrar refuses to accept a merger application, it must inform the qualified members of the refusal and reasons within this period.
• within 28 days of being informed of the refusal: Qualified members may appeal the registrar's or Commission's refusal to the Royal Court.
• as soon as reasonably possible after implementation: A qualified member must inform the Commission that a merger agreement with a recognized entity has been implemented and the date of implementation.

Related documents

• This document is made under Foundations (Jersey) Law 2009
• Financial Services (Disclosure and Provision of Information) (Jersey) Regulations 2020 amends this document