banking

Who is caught

The instruments indexed under this topic regulate deposit-taking business carried on in or from Jersey. The Banking Business (Jersey) Law 1991 is not itself among the indexed documents, but the subordinate Orders and guidance notes here operate under it and identify who is caught. Supervision sits with the Jersey Financial Services Commission (JFSC), whose founding statute lists banks registered under the 1991 Law among the entities it supervises.

• Deposit-takers: Persons carrying on deposit-taking business (banks) registered under the Banking Business (Jersey) Law 1991 are the core population for the banking Orders and guidance.
• Jersey incorporated banks (JIBs): Jersey incorporated deposit takers are the subject of the prudential reporting and capital/liquidity guidance (ICAAP, capital ratios, LCR/LMR, NSFR, credit risk and the various return-validation notes).
• Overseas incorporated banks and Jersey branches: Overseas incorporated banks, including through a Jersey branch, are covered by the accounts and auditor requirements and by separate branch prudential-reporting guidance.
• Other deposit-regime actors: The General Provisions Order also reaches certain non-bank actors whose activities might otherwise fall within the deposit-taking regime, and anyone issuing deposit advertisements in or targeted at Jersey.
• Statistical reporting: The Co-ordinated Portfolio Investment Survey guidance applies to Jersey banking licence holders (alongside funds, insurers and SPVs) as portfolio-investment holders.

Sources: Banking Business (Appointment of Manager) (Jersey) Order 2008 · Banking Business (General Provisions) (Jersey) Order 2002 · Banking Business (Accounts, Auditors and Reports) (Jersey) Order 2023 · Financial Services Commission (Jersey) Law 1998 · Co-ordinated Portfolio Investment Survey (CPIS) Guidance Note for Jersey Participants · Guidance Note: Pillar 2 in Jersey · Guidance Note: Prudential Reporting of Capital Ratios (Last revised 1 January 2025) · Prudential reporting of credit risk under the standardised approach to credit risk · Guidance Note on Prudential Reporting of Financial Data · Guidance Note on Prudential Reporting of Financial Data for JIBs · Guidance Note on Prudential Reporting of Liquidity Data (Branches) - Issued August 2019, Amended October 2019 · Guidance Note: Prudential Reporting of Liquidity Ratios

Key duties

Banks face a registration requirement, standing conditions on their business, detailed accounts and auditor duties, and recurring prudential reporting and monitoring obligations. The recurring and deadline-bearing duties are set out first.

Registration and conditions

• Registration: A person must be registered under the Banking Business (Jersey) Law 1991 to carry on deposit-taking business; carrying on such business unregistered is a trigger for JFSC intervention.
• New activities: A registered person must not commence a new Jersey activity that has or may have a significant effect on its business or profitability without the Commission's consent.
• Fit and proper persons: A registered person must remove a director, controller or manager if the Commission requires this on fit and proper grounds, and must comply promptly with notices under Article 26(1) of the Law.
• Overseas banks: Overseas incorporated banks must appoint a Commission-approved senior officer outside Jersey and must notify the Commission within 14 days of any change of the Jersey principal manager or deputy.
• Jersey banks - expansion and exposure: Jersey incorporated banks must obtain Commission approval before establishing or acquiring an overseas office, branch or subsidiary, before an overseas deposit-taking/banking joint venture, and before an exposure to one person or connected group exceeding 25% of agreed capital resources.
• Deposit advertising: Deposit advertisements issued in or targeted at Jersey must comply with the content conditions in Schedule 2 (deposit-taker identification, interest terms, deposit protection scheme details, currency).

Auditors and accounts

• Auditor appointment: Jersey and overseas incorporated banks must appoint an auditor, assess the proposed auditor's skills, resources and experience, and notify the Commission before appointment; the Commission may object.
• Auditor access: A registered person must give its auditor access to records at all times and provide information and explanations required.
• Auditor termination: A registered person must notify the Commission without delay of an auditor's termination; the outgoing auditor must send the Commission a statement or report within 7 days of termination taking effect (or a longer period allowed).
• Accounting periods: Jersey incorporated banks must obtain Commission approval of their first (up to 18 months) and subsequent accounting periods; overseas incorporated banks must notify their accounting period before it starts and any change before it takes effect.
• Accounting records: Records must show and explain all transactions, be secured and backed up, and be retained for at least 10 years.
• Declarations and reports: After each accounting period a signed declaration (covering compliance, record adequacy and AML/CFT) and a directors' report must be prepared, provided to the auditor with financial statements and the prudential return, and provided to the Commission.
• Direct auditor reporting: Auditors and other reporting persons must report directly and immediately to the Commission, without first informing the bank, on circumstances that could prejudice depositors, including suspected fraud, misappropriation or reckless management.

Prudential reporting and monitoring

• Prudential returns: JIBs must submit prudential returns for each prudential period end date, calculated consistently with JFSC guidance definitions; the return template sheets must be completed accurately and reconcile internally and against the balance sheet (subject to the numerous validation and verification checks in the JIBs guidance notes).
• Capital monitoring: JIBs must monitor their CET1, Tier 1 and total capital ratios internally on a daily basis and notify the JFSC if capital ratio limits are not met or capital buffers are not maintained; the Leverage Ratio must also be calculated and reported.
• Liquidity monitoring: JIBs must calculate and report HQLA, the LCR or LMR and the NSFR per JFSC guidance, monitor the LCR/LMR daily, and notify the JFSC if limits or liquidity buffers are not maintained.
• ICAAP and Pillar 2: JIBs are expected to prepare and maintain an ICAAP, conduct stress and reverse stress testing and maintain recovery plans, obtain prior JFSC approval before using any Advanced Approach for Pillar 1, and notify the JFSC if capital falls below the Capital Buffer.
• Branch liquidity data: Jersey branches of overseas incorporated banks must complete the liquidity returns (cashflows, large deposits and whole-bank data) in sterling equivalent in line with the branch guidance and their Liquidity Management Policy.

Statistical reporting

• CPIS return: Banking licence holders that hold portfolio investment assets issued by non-residents must submit an annual Co-ordinated Portfolio Investment Survey return via myJFSC, valued and geographically allocated per the guidance.

Sources: Banking Business (Appointment of Manager) (Jersey) Order 2008 · Banking Business (General Provisions) (Jersey) Order 2002 · Banking Business (Accounts, Auditors and Reports) (Jersey) Order 2023 · GN JIBs 6.1 - Validation and verification of the '6.1 Capital Adequacy' Sheet · Co-ordinated Portfolio Investment Survey (CPIS) Guidance Note for Jersey Participants · Guidance Note: Pillar 2 in Jersey · Guidance Note: Prudential Reporting of Capital Ratios (Last revised 1 January 2025) · Prudential reporting of credit risk under the standardised approach to credit risk · Guidance Note on Prudential Reporting of Financial Data · Guidance Note on Prudential Reporting of Financial Data for JIBs · Guidance Note on Prudential Reporting of Liquidity Data (Branches) - Issued August 2019, Amended October 2019 · Guidance Note: Prudential Reporting of Liquidity Ratios

Exemptions and carve-outs

The main exemptions in the banking instruments appear in the General Provisions Order, which carves out specified transactions and named persons from the deposit-taking prohibition, subject to conditions.

• Exempt transactions: Certain dealings by charities, industrial and provident societies, advocates and solicitors, investment dealers, and trustees are excluded from the deposit-taking prohibition.
• Exempt persons: The Channel Islands Co-operative Society Limited and Community Savings and Credit Limited are exempt persons, each subject to Schedule 1 conditions (for example deposit limits, auditor statements, information and inspection rights, and annual accounts).
• Preserved variations: The Accounts, Auditors and Reports Order allowed registered persons relying on existing exemptions or variations under the earlier regime to preserve them by notifying the Commission within 3 months of the relevant commencement.

Beyond these, the prudential guidance notes state that they do not themselves introduce new obligations, and no further general banking exemptions appear in the indexed instruments.

Sources: Banking Business (General Provisions) (Jersey) Order 2002 · Banking Business (Accounts, Auditors and Reports) (Jersey) Order 2023

Enforcement and penalties

Enforcement combines a civil financial penalty regime, criminal offences for specific contraventions, and a power to appoint a manager to intervene in a bank's affairs.

Civil financial penalties

The Financial Services Commission (Jersey) Law 1998 creates a civil financial penalty regime (Articles 21A to 21G) allowing the Commission to impose penalties on registered persons, principal persons and key persons, with notification, surcharge, appeal and proceeds provisions. The Financial Penalties Order 2015 sets the bands and maximum levels for contraventions of a Code of Practice or relevant enactment.

• Band 1: Repeated failure (more than once in 2 years) to notify a Code-required matter after a prior written warning: up to the lower of 4% of average annual turnover or 100,000 pounds for a registered person, or 10,000 pounds for an individual.
• Band 2: A contravention not in Band 2A or 3 and not rectified within a reasonable Commission-set timeframe: up to the lower of 6% of average annual turnover or 4,000,000 pounds for a registered person, or 200,000 pounds for an individual.
• Band 2A: A negligent contravention causing or risking specified harms: up to the lower of 7% of average annual turnover or 4,000,000 pounds for a registered person, or 300,000 pounds for an individual.
• Band 3: An intentional or reckless contravention involving the specified harms: up to 8% of average annual turnover for a registered person, or 400,000 pounds for an individual.

Criminal offences

• Accounts and auditor offences: Contravention of key provisions of the Accounts, Auditors and Reports Order (appointment, auditor access, accounting records, accounting-period notifications, misleading statements to auditors, termination reporting) is an offence liable to a fine.

Appointment of a manager

The Appointment of Manager Order lets the Commission appoint a manager to take over a deposit-taker's affairs on defined triggers, including inadequate management (controller dishonesty, insufficient resources, poor records, conflicts, serious AML/CFT breaches, or death/incapacity of a controller), failure to wind up properly, persistent failure on complaints, carrying on business unregistered, the need to protect assets or records, avoiding forced closure, implementing a compensation scheme, and non-compliance with conditions, objection notices or directions under the Law.

Sources: Banking Business (Appointment of Manager) (Jersey) Order 2008 · Banking Business (Accounts, Auditors and Reports) (Jersey) Order 2023 · Financial Services Commission (Jersey) Law 1998 · Financial Services Commission (Financial Penalties) (Jersey) Order 2015