securities investment business

Who is caught

Securities investment business in Jersey is regulated principally under the Financial Services (Jersey) Law 1998, which prohibits carrying on financial service business (including investment business) in or from Jersey without registration by the Jersey Financial Services Commission. The Financial Services (Financial Service Business) (Jersey) Order 2009 sets out the specific activities that bring a person within the investment business class and require registration.

Registrable activities

• Investment business classes: Classes A to E under the 2009 Order cover dealing in investments, managing investments, giving investment advice (with or without holding client assets), and business relating to certain non-public collective investment funds.
• Forward foreign exchange: Guidance treats a forward FX transaction as regulated investment business where it has a settlement date of seven days or more and is entered into for speculative rather than commercial purposes; spot FX is never caught.
• Registered persons: Persons registered under Article 9 to conduct investment business are subject to the Investment Business Code of Practice and its supporting guidance.

Securities issues and offers

Separately, the raising of money and the issue and circulation of securities in or into Jersey are controlled under the Control of Borrowing (Jersey) Law 1947 and the Control of Borrowing (Jersey) Order 1958 (COBO), which require Commission consent for a range of capital-raising activities by bodies corporate, partnerships and other vehicles, subject to stated thresholds and exemptions. JFSC guidance addresses securities issues by Jersey companies and LLCs and the circulation of offers to retail investors in Jersey by foreign domiciled persons.

Sources: Control of Borrowing (Jersey) Law 1947 · Control of Borrowing (Jersey) Order 1958 · Financial Services (Jersey) Law 1998 · Financial Services (Financial Service Business) (Jersey) Order 2009 · Investment Business Code of Practice · Circulation in Jersey of offers to retail investors by foreign domiciled persons · Guidance Note: Forward Foreign Exchange Transactions (2010-09-13) · Guidance Note: Securities Issues by Jersey Companies

Key duties

The central obligation is registration before carrying on investment business, followed by continuing conduct, financial, client-asset, reporting and notification duties drawn from the Financial Services (Jersey) Law 1998, its subordinate Orders, and the Investment Business Code of Practice.

Registration and notifications

• Registration: A person must not carry on investment business in or from Jersey unless registered under Article 7 of the Financial Services (Jersey) Law 1998, and must satisfy the JFSC's fit and proper criteria on integrity, competence, financial standing and organisation on application and on an ongoing basis.
• Change notifications: Registered persons must notify the Commission of changes in principal persons, key persons (compliance officer, money laundering compliance officer, money laundering reporting officer), and shareholdings or LLC interests, and must display their registration certificate and conditions.
• Material change of circumstances: Registered persons must notify and re-satisfy the fit and proper criteria on a material change such as an anticipated change of ownership.

Accounts, audit and financial resources

• Accounting periods and auditor: Under the Accounts, Audits and Reports Order 2007, registered persons must obtain Commission approval of accounting periods, engage only a Commission-approved auditor, and keep accounting records for at least 10 years.
• Filing deadline: Financial statements, with the declaration, directors' report and auditor's report, must be provided to the Commission within 4 months of the accounting period end, extendable to up to 8 months in special circumstances with Commission permission.
• Financial resources (ANLA): Under the Code and supporting guidance, registered persons must maintain adequate financial resources and calculate Adjusted Net Liquid Assets at least quarterly, moving to monthly where ANLA falls between 110% and 130%, and daily for investment businesses with position, counterparty or foreign currency risk unless the JFSC grants a variance. If ANLA falls below 110% of the Expenditure Requirement, a documented restoration plan is generally required within 30 days of notification.
• Professional indemnity insurance: The Code requires adequate professional indemnity insurance, including JFSC-consented run-off cover when ceasing investment business.

Client assets

• Segregation and reconciliation: Under the Investment Business (Client Assets) Order 2001, registered persons must pay client money into a client bank account with an approved bank, keep it segregated, account for it, and reconcile at least monthly (completing within 10 business days), retaining records for at least 10 years.
• Protected property: The 2022 amending Order requires client property to be held as trustee, with due diligence on approved custodians and third parties, written custodian agreements, statements at least every six months, and specified disclosures where an overseas jurisdiction applies.

Conduct of business

• Code of Practice principles: Registered persons must comply with the seven principles of the Investment Business Code of Practice, covering integrity, client interests, systems and controls, transparency, financial resources, open dealing with the JFSC, and avoiding misleading statements.
• Suitability and client information: Firms giving advice or exercising discretion must obtain and document client information, assess and evidence suitability, issue Suitability Letters, and send transaction confirmations promptly (no later than one business day after the transaction unless otherwise agreed).
• Conflicts and vulnerable clients: Firms must identify, prevent and manage conflicts of interest with policies reviewed and reported to the board at least annually, and must identify and protect vulnerable clients through documented policies and procedures.
• Staff competence: Investment employees must hold qualifications appropriate to their role; since 1 January 2014 advice to retail clients requires a QCF level 4 qualification (or level 3 with gap-fill).
• Advertising: Under the Advertising Order 2008, financial service advertisements must identify the issuer and provider, be clear, fair and not misleading, not claim Commission approval, and copies and approval records must be kept for 10 years after last issue.

Securities issue consents

• COBO consent: Jersey companies and LLCs must obtain Commission consent under COBO before issuing securities within Articles 4 or 4A; standard consent conditions typically require notice of material changes, prior approval of ownership changes, immediate notice of default, and an annual confirmation of no breaches with the Annual Return.

Sources: Financial Services (Jersey) Law 1998 · Financial Services (Advertising) (Jersey) Order 2008 · Financial Services (Investment Business (Client Assets)) (Jersey) Order 2001 · Financial Services (Trust Company and Investment Business (Accounts, Audits and Reports)) (Jersey) Order 2007 · Investment Business Code of Practice · Guidance Note: Definitions and Guidance on the Adjusted NET Liquid Assets (ANLA) Calculation · Conflicts of Interests requirements under Principle 2 the Code of Practice for Investment Business · Licensing policy in respect of those activities that require registration under the Financial Services (Jersey) Law 1998 · Professional Qualifications (Investment Business) · Guidance Note: Securities Issues by Jersey Companies · Suitability of advice under the Code of Practice for Investment Business · Provision of Investment Services to Vulnerable Persons under the Code of Practice for Investment Business · Financial Services (Investment Business (Client Assets)) (Amendment No. 2) (Jersey) Order 2022

Exemptions and carve-outs

The Financial Services (Jersey) Law 1998 itself contains schedule exemptions from registration for specified categories of activity or person, and a series of Orders provide targeted carve-outs from the investment business registration regime. Several of these exemptions preserve certain conduct, supervisory and enforcement provisions of the Law as if the exempt person were registered.

• Insurance permit holders: A person holding an insurance business permit under the Insurance Business (Jersey) Law 1996 is exempt from Articles 13 to 18 of the Financial Services (Jersey) Law 1998 for investment business connected to that permitted insurance business. Guidance confirms insurers that only effect long term contracts need not register, but those providing investment advice must register for the advisory activity.
• Overseas persons: An overseas person (no Jersey place of business and not Jersey-incorporated) is exempt when carrying out specified transactions with Jersey persons, provided the transaction arose from an unsolicited approach or a compliant advertisement; extra conditions apply where the Jersey counterparty is a natural person acting as a member of the public.
• Qualifying Segregated Managed Accounts: Operators of QSMAs meeting the Schedule conditions are exempt from most of the Law, subject to notification, fee, fair-treatment and quarterly reporting obligations, though certain enforcement and Commission-powers provisions continue to apply.
• Special purpose investment business: Functionaries of a special purpose (securitisation or repackaging) regulated scheme whose securities are issued only to qualified professional investors are exempt from registration, but remain subject to Articles 12, 23 to 26, 28, 32 to 39 and 41.
• Restricted investment business: Functionaries of a professional investor regulated scheme carrying on only restricted investment business are exempt from Article 7 registration, subject to minimum subscription or professional investor and signed-warning conditions, and remain subject to Articles 12, 23 to 26, 28, 32 to 39 and 41.
• Advertising exemptions: The Advertising Order 2008 does not apply to money service business advertisements and provides exclusions for certain fund prospectuses, business-name-only notices, sponsorship statements, and specified communications by overseas persons.
• COBO exemptions: COBO provides exemptions from consent requirements including a de minimis threshold (currently 50,000 pounds or equivalent raised over 12 months), a 10-holder exemption, employee share options, and certain non-public foreign offers valid in the UK or Guernsey with no relevant connection to Jersey.

Sources: Control of Borrowing (Jersey) Order 1958 · Financial Services (Jersey) Law 1998 · Financial Services (Advertising) (Jersey) Order 2008 · Financial Services (Investment Business (Insurance Business – Exemption)) (Jersey) Order 2001 · Financial Services (Investment Business (Overseas Persons – Exemption)) (Jersey) Order 2001 · Financial Services (Investment Business (Qualifying Segregated Managed Accounts – Exemption)) (Jersey) Order 2014 · Financial Services (Investment Business (Restricted Investment Business – Exemption)) (Jersey) Order 2001 · Financial Services (Investment Business (Special Purpose Investment Business – Exemption)) (Jersey) Order 2001 · Circulation in Jersey of offers to retail investors by foreign domiciled persons · Guidance Note: Treatment of Insurance Companies under the Financial Services (Jersey) Law 1998 in respect of Investment Business (2010-09-13)

Enforcement and penalties

Enforcement combines criminal offences under the primary laws, a civil financial penalty regime, and the Commission's intervention powers. The Commission may also issue public statements naming unauthorised or fraudulent operators.

Civil financial penalties

The Financial Services Commission (Jersey) Law 1998 (Articles 21A to 21G) allows the Commission to impose civil penalties on registered persons, principal persons and key persons for specified contraventions. The Financial Services Commission (Financial Penalties) (Jersey) Order 2015 sets the maximum levels by band.

• Band 1: Repeated failure to notify a matter required by a Code of Practice after a 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 rectified within a reasonable 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 those harms: up to 8% of average annual turnover for a registered person, or 400,000 pounds for an individual.
• Late payment: An unpaid penalty attracts a late payment surcharge and enforcement action.

Criminal offences and intervention

• Market abuse and information offences: The Financial Services (Jersey) Law 1998 creates offences relating to insider dealing, market manipulation, provision of misleading information in relation to securities dealing, and supplying false information to or obstructing the Commission.
• Code non-compliance: Non-compliance with the Investment Business Code of Practice is grounds for regulatory action including written directions, public statements, financial penalties, or revocation of registration.
• Appointment of a manager: Under the Appointment of Manager Order 2008, the Commission may apply to the Royal Court for appointment of a manager over a firm's affairs in prescribed circumstances, including inadequate management, carrying on business without registration, and failure to comply with conditions or directions.
• COBO offences: Contravention of an Order made under the Control of Borrowing (Jersey) Law 1947 is an offence punishable by up to 5 years imprisonment, a fine, or both.
• Public warning statements: The Commission issues public statements identifying unauthorised or fraudulent entities holding themselves out as carrying on investment business without registration.

Sources: Control of Borrowing (Jersey) Law 1947 · Financial Services (Jersey) Law 1998 · Financial Services (Appointment of Manager) (Jersey) Order 2008 · Financial Services Commission (Jersey) Law 1998 · Financial Services Commission (Financial Penalties) (Jersey) Order 2015 · Investment Business Code of Practice · Dandoo Express Group Plc (the scam entity) (2025-12-04) · AIB Private Bank (Jersey) Limited/AIB Online/AIB Plc (2004-05-21)