During the latter stages of 2012, Jersey Finance, the industry’s representative body, commissioned a report from McKinsey & Company seeking guidance on how the island should position itself in the years ahead. Since the report’s publication, it is pleasing to note a more cohesive approach to the way in which Jersey promotes itself. As part of the relevant initiatives, during the first half of 2014, the Jersey Financial Services Commission (JFSC) entered into memoranda of understanding with the China Securities Regulatory Commission and the Emirates Securities and Commodities Authority, thus setting the scene for greater business opportunities in these regions.
As regards the JFSC itself, we were pleased to see the appointment of a chief operating officer and three new directors, covering policy and strategy, funds and trust company business. A new chairman will also be appointed shortly.
Also on the regulatory theme, the entire industry has geared itself up for the ongoing information exchange required under the US Foreign Account Tax Compliance Act (FATCA) and intergovernmental agreements. We now live in a world where transparency is seen by some as a must. How this will all pan out remains to be seen, but, from a Jersey perspective, a great deal of work is going on behind the scenes, particularly in relation to the desire in many jurisdictions to have a register of companies and trusts. This subject will run for some time.
As for Jersey itself, it was pleasing to see that the island maintained its AA+ international credit rating, issued by Standard & Poor’s. This was followed in July by the island being recognised once again as the ‘Best Offshore Centre’ at the Global Investor/ISF Awards 2013.
Late spring saw a fairly unique occasion, when the island welcomed a delegation of Arab ambassadors for a two-day visit. This event further strengthened the links between the island’s finance industry and the Gulf region.
Legal developments
The island’s courts continue to be regarded as pre-eminent in their field, with judgments providing great assistance to practitioners looking to administer structures based on the island or elsewhere. The Bailiff, Sir Michael Birt QC, the head of the judiciary, has announced he will step down in 2015. His judgments are held in high regard worldwide, perhaps, in part, due to his previous experience in the trust world, which is mirrored by that of his successor, William Bailhache QC. These changes, along with the new appointments at the JFSC, demonstrate the importance the island places on having the best people at a regulatory and judicial level.
Aiming to ensure the island stays at the forefront of innovation, important changes to the Companies (Jersey) Law 1991 will take effect this year. The Law introduces further innovations that will make the island even more attractive for those who use Jersey companies for investment structuring, asset holding and a wide variety of other purposes. The island’s government has also agreed to the introduction of a new charities law, which will further increase confidence in the island’s ability to offer up philanthropic structures based in Jersey. Ongoing amendments to the island’s much-respected trust law are also under active consideration.
International financial flows
Set against a backdrop of continuing geopolitical instability in many areas of the world, Jersey continues to welcome international families and companies seeking a well-regulated, stable jurisdiction in which they can trust their assets to be well managed.
As the world begins to show signs of economic recovery, Jersey is set to play its part. In this regard, Jersey Finance recently presented the results of a major report on international financial flows. The report found that the allegations that international finance centres allow significant illicit capital flows, enabling individuals and multinational enterprises to avoid paying a ‘fair’ amount of tax, rests on poor data and analysis, and on mistakes about how financial transactions, international taxation and anti-money laundering rules actually work.
All expect the final quarter of this year to be an extremely busy time for the island. Let us hope so.
STEP Jersey 22nd International Conference
STEP Jersey’s Annual Conference will be held on 21 November 2014 at the Pomme d’Or Hotel, St Helier. Senator Sir Philip Bailhache, Jersey’s Minister for External Relations, will open the conference with his keynote address. Speakers will include Shân Warnock-Smith QC TEP, Elspeth Talbot Rice QC and Clive Beer. A pre-conference drinks reception hosted by XXIV Old Buildings will be held the night before at the Royal Yacht Hotel, St Helier. For more information, visit www.step.org/events-calendar or contact [email protected]