The Security Interests (Jersey) Law 2012 (the
Law) will come fully into force from 2 January
2014 and provides for registration as a means of perfecting
security over intangible moveable property. The register of
security interests will be maintained by the registrar of companies
and will be a matter of public record.
There was concern expressed in the trust industry in Jersey as
to what the new registration requirement meant for trustees and in
particular as to whether trusts would need to be reflected on the
register. Trusts are usually a private matter between the
settlor and the trustee and not a matter of public record.
However, a requirement to reflect trusts on the register of
security interests would mean that their existence was made
public. Might competitor jurisdictions argue that Jersey had
introduced a form of Trusts Register?
This concern has been recognised in the Security Interests
(Registration and Miscellaneous Provisions) (Jersey) Order 2013
(the Order), which carves out most trusts (other
than certain unit trusts) by providing an exemption from
registration where a security interest is granted by the trustees
of a trust over the trust property of that trust. In such
circumstances, registration will not be required in order to
perfect the security and as a matter of law neither the name of the
trust nor the name of the trustee will need to be entered on the
public register of security interests.
Certain unit trusts (referred to in the Order as
"prescribed unit trusts") will however remain subject to
the general provisions of the Law. This is in recognition of
the fact that such entities are of a more commercial nature and the
same sensitivities do not therefore apply. A unit trust will
be a prescribed unit trust where:
1. it is a unit trust within the meaning of
the Trusts (Jersey) Law 1984;
2. express provision is made in the instrument
by which the trust was created to the effect that the trustees of
the trust may issue units in the trust;
3. all of those units are registered in a
register of holders of units in the trust in the name of one or
more legal persons (that is, a company or other person, or an
association of persons, that is not an individual, registered or
otherwise formed anywhere in the world);
4. none of those legal persons:
(a) is a
foundation that has as an object the benefit of one or more
(b) acts as
trustee for the benefit of one or more individuals, or
as the nominee of one or more individuals;
5. the trust property of the trust includes
immovable property (whether or not that property is situated in
6. the trust property of the trust is held
directly by the trustees of the trust or indirectly by the trustees
of the trust through one or more legal persons; and
7. the trustees of the trust have consent
under Article 9 of the Control of Borrowing (Jersey) Order 1958 in
relation to the issue of the units in the trust.
We expect that many lenders will require security taken pursuant
to the Law to be registered in the new registry of security
interests, whether to perfect the security or to give notice to
third parties. However, as noted above, it will not be
necessary for security granted by trustees of a trust (other than a
prescribed unit trust) to be registered in order to perfect
security and indeed registration of security granted by trustees of
trusts (other than prescribed unit trusts) will not be
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