Playing by the rules

Thursday 19 June 2014

More complaints and breaches are being reported to the Jersey Financial Services Commission than ever before – but they say it’s down to better awareness of the rules rather than firms taking on dodgy business.

In the regulator’s annual report, they say that Jersey has had to do less than other jurisdictions to apply new global standards on financial services because our standards of regulation have always been high.

Deputy chairman John Averty wrote: “Regulation over several years of economic downturn has presented its challenges. There has been a change in the global view of required standards, but as Jersey has always committed to high standards of conduct since the inception of its finance industry, this has had less impact than for many jurisdictions.

“However, it has to be noted that we have dealt with more breaches during the downturn than hitherto. There will be a number of reasons for this, but the main one appears to be an increase in reporting awareness rather than a deterioration in behaviour or taking on riskier business.”

The report also notes that there will be a full MONEYVAL – a European committee of experts on international anti money-laundering standards – inspection of Jersey’s regulations and rules before the end of the year.

Mr Averty also welcomed the move to bring in civil penalties for the commission.

He wrote: “Where possible, the Commission believes remediation is the best first step, but takes firm action in serious misconduct cases, of which there have regrettably been a few instances.

“At present the Commission only has the blunt instrument of banning individuals or closing firms down but I am pleased to report that the Chief Minister has agreed to propose to the States a new law allowing financial civil penalties to be imposed in cases where remediation is not possible, an inadequate response to the circumstances, or has failed.

“This will not only enable us to meet international expectations, but also place the not inconsiderable financial cost of inspections and enforcement more on those that behave inappropriately rather than, as at present, on the finance industry as a whole.”