Since the announcement of the 1998 Edward's review of the industry, Jersey has been under consistent ...
The dust has now settled since the publication of the review. So far the island has managed to achieve a balance between the review's recommendations and the practicalities for those working in the industry.
The island has tightened its regulations considerably, to the extent that Jersey can claim its regulations are more pervasive than in most other jurisdictions worldwide. Investors can be confident when they use Jersey that they are protected against dubious individuals, business or processes. But our position on the question of confidentiality remains the same. It is important for the long-term future of the island's industry that Jersey clients can conduct their legitimate financial affairs without fear of unwarranted intrusion or disclosure. However, we are also determined that where risks exist to Jersey's future prosperity, they should not originate from regulatory issues.
The far greater risk to the well-being of the industry is from tax harmonisation in its many guises. The OECD, which plans to publish a list of 'tax havens' and which is examining measures to eradicate perceived unfair tax advantages, is essentially a step towards tax harmonisation. It is probable that both the International Business Company and Tax Exempt Company could be targets of the Government and/or the OECD and we must continue to monitor these developments carefully. We need to ensure we maintain our tax advantages and that Jersey remains a jurisdiction which clients can use to undertake legitimate tax planning. Fortunately, any tax concerns are a longer-term issue rather than a short-term fear.
Despite these potential threats, the industry will continue to draw strength from Jersey's stable economy. The backbone of the industry remains the many major banking and trust organisations, and quality financial professionals. Recent acquisitions of trust companies by international banking groups are a positive signal of their belief in Jersey's long-term future.
The Jersey Financial Services Commission has forged closer links with the industry and the consultative line the commission. The Jersey Bankers Association and other organisations enjoy regular consultation with the IFSC. This process enables us to express our interests and concerns at an early stage and to have a voice in shaping both regulation and the underlying legislation.
Inflation, however, is a worry and the Government has to find a way of closing the gap with the UK, otherwise our competitiveness across all sectors will be affected.
There is an anxiety about the current trend to encourage outsourcing of back-office processes to other jurisdictions. Apart from sending an inappropriate signal that implies the island is unable to cope with further business, it would be far better in the long term if institutions could outsource to a common utility in Jersey, so that we retain all the relevant competences and business.
Jersey will need to be flexible and ready to change. There are colossal opportunities around as businesses and individuals internationalise. E-commerce, for example, presents Jersey with a natural opportunity.
If the industry continues to be innovative in finding new areas of specialisation, as demonstrated by its remarkable success in expanding into areas such as employee share ownership schemes and securitisation, and if we continue to innovate, then we have a prosperous long-term future.
Martyn Scriven is president of the Jersey Bankers Association
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