Jersey has presented a draft law to the Government to regulate corporate and trust services. With the...
With the Edwards report still lurking in the political background, UK territories are making a collective decision to re-examine the area of corporate and trust services regulation.
Guernsey, the Isle of Man and Bermuda are also looking at these areas. Although there is no direct co-operation between them, a raft of legislation is set to emerge from these jurisdictions over the next few years.
On the trust side, there are few jurisdictions in the world that actively regulate trustees, even among mainstream centres and so this is one area where onshore centres may fall behind some of their offshore counterparts.
Jersey's draft law is a broad outline that will lay the groundwork for the introduction of the actual regulations. The date for the introduction of the main legislation, plus the raft of subordinate legislation, is currently slated for the start of 2001.
When it is introduced, it will become a legal requirement for companies that provide trust and corporate services as part of their business (not on a personal basis) to be registered by the Jersey Financial Services Commission.
Directors, company secretaries and trustees will all need to have certain qualifications and experience in order to show their competence in these areas.
This will only effect businesses that provide these services professionally, so an investor with a Jersey-based company holding assets will not be affected, whereas the company providing them with the legally required personnel will be.
The legal muscle behind these new regulations will be substantial. If companies are found to no longer fulfil the criteria needed for registration, if they are found to be seriously undermining the good of their clients or the reputation and integrity of Jersey, or if they publish a misleading advert, the commission can make public statements about this activity, it can order companies to follow directions and take out injunctions if they fail to comply. This can lead to lead to criminal prosecution.
Although it will not be an issue in the near future, the next area for regulation is likely to be that of general insurance intermediaries.
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