For the past 40 years, Jersey has been a prominent player in delivering fund services, offering a full suite of fund products from detailed rules-based retail public funds through to private funds for professional investors.
As the island’s financial services regulator, at the Jersey Financial Services Commission we recognise the importance of this sector and are committed to ensuring we have the right regulatory framework in place to enable its ongoing growth. That is why we continue to evolve our regulatory approach, whether that is working to streamline regimes or digitise our capabilities.
Crucial to our ability to evolve is our policy work. With any and all development in this area, we always seek to engage extensively with the island’s government, the local funds industry, overseas agencies, standard-setting bodies and other financial services regulators across the world. This is to make sure we continue to deliver rational and proportionate regulation.
One important development in recent years has been the Jersey Private Fund (JPF), which we launched in 2017, consolidating all private fund products in the island. Alongside the launch, we introduced the concept of a ‘designated service provider’ for regulatory compliance and oversight of the fund and we created the JPF Guide, which gives a clear set of requirements for the fund and managers.
One of those requirements is that all JPFs have to submit an annual return to us and last year we received 130 online submissions. That return period has provided us with some valuable insights, notably that those JPFs reported a collective total of assets under management of £19.4 billion (€22.4 billion).
Our discussions with local industry are ongoing about JPFs adopting similar reporting to public funds in the future. This would allow us to paint a picture of Jersey’s funds sector in its totality, rather than with a public/private divide.
Looking forward
Our work on the National Risk Assessment and our own supervisory data collection exercise has certainly enabled us to create a better profile of the sector and, with 217 JPFs holding active licences at the end of March 2019, we are looking forward to the next return period.
We know that to really be at the forefront of regulation, we need to continue to become a more digital regulator. We are committed to delivering on this, ensuring that we are an easier organisation to interact with. We have started as we mean to go on with the successful introduction of our online submissions process for JPF applications, notifications and returns.
Next, we plan to extend our digital capabilities to offer additional data exchange services and we are focusing on digitising applications for public funds and other industry sectors. Already in 2019, we have launched an online facility for firms to submit their financial statements and, later this year and into 2020, we plan to deliver digital application forms for fund services businesses, and Jersey and non-domiciled public funds.
We have more to do in the funds space and we plan to start our next phase of regime enhancements once the changing geopolitical environment we are currently experiencing becomes more certain.
Our resources have naturally been diverted to ensure that, in the event of a deal or no-deal Brexit, Jersey’s relationships with other jurisdictions, in particular the UK, remain unchanged. We have consequently been preparing a number of amendments to laws, regulations and orders to safeguard the island’s position and we recently updated our Alternative Investment Fund’s memorandum of understanding with the UK’s Financial Conduct Authority.
The latter should ensure that connections between UK managers and Jersey funds stay the same and, irrespective of the outcome, it should be business as usual.
By Mike Jones, director of policy and risk, Jersey Financial Services Commission
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