We are cautiously optimistic about Jersey's future and the role it plays as a key functionary in international capital flows.
Jersey's position in the financial services industry remains unchanged following the 52% vote for Brexit. Jersey has always been a third country to the European Union for the purposes of financial services, and its role as a well-regulated and highly-regarded centre provides much-needed reassurance to investors, their advisers and the asset management community.
The island's finance industry facilitates estimated investment flows into the UK and the rest of the EU of £800bn.1 Jersey's relationship with the EU is based upon Protocol 3 of the UK's Treaty of Accession, which is dependent on the UK's EU membership. However, the provision of financial services into Europe falls outside Protocol 3 and Jersey is treated as a "third country" jurisdiction. Consequently, Jersey has negotiated market access on a case-by-case basis.
Jersey's Government believes it's in the island's best interest to maintain the substance of its existing relationship with the EU, as set out in Protocol 3, and is working to secure this relationship. Jersey's constitutional relationship with the UK is not affected by the UK's decision to leave the EU. And Jersey maintains strong access to European markets through broad and robust third country agreements. These arrangements also remain unaffected.
If the UK does emerge as a stronger, more agile global competitor post-Brexit, Jersey could stand to benefit from capital flows both into and out of the UK.
As (at the time of publishing) Article 50 of the Lisbon Treaty is yet to be invoked, and withdrawal negotiations would take place over two years, it will be some time before we know what shape the future UK-EU relationship will take. Whilst we experience this period of disruption and uncertainty, we are cautiously optimistic about Jersey's future and the role it plays as a key functionary in international capital flows.
1 source: Jersey Finance
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