Q4/2021 saw a number of legislative updates that are directly relevant to directors of Jersey and Guernsey businesses. In addition, our teams have published guidance on the latest matters coming from the courts of the Islands and beyond that are relevant to directors and senior leadership. In summary:
- The States of Guernsey have approved new financial services regulatory laws along with revised rules, codes and guidance relating to those laws
- Key changes have been made to economic substance rules and ESG fund rules in Jersey and Guernsey
- Changes to streamline the Jersey prospectus rules took effect from mid-October
Follow the links below to our briefings, or contact one of the team listed below to discuss in more detail.
JERSEY & GUERNSEY
Jersey & Guernsey Consolidate Economic Substance and Extend to Partnerships
Both Channel Islands have brought partnerships into scope of economic substance requirements for accounting periods commencing on or after 1 January 2022, although partnerships formed on or after 1 July 2021 will be in scope immediately on formation where they conduct activities that trigger the economic substance requirements. You can read more here.
Updates to Rules For ESG Funds
The Guernsey Green Fund (Amendment) Rules, 2021 came into effect in July, introducing two key changes to the Guernsey Green Fund Rules following a thematic review. The changes aim to reduce the administrative burden where possible, while continuing to protect investors from potential greenwashing, which is an increasing concern given growing popularity of ESG investing. Similarly, in Jersey, updates have been made to certain codes of practice and the JPF Guide to introduce new disclosure requirements to address concerns around potential greenwashing. Read our note regarding the Guernsey changes here, and our note about the Jersey changes here.
Update to Listing Rules on The International Stock Exchange
The International Stock Exchange has announced a number of improvements to its Listing Rules and Fees that took effect on 2 August, designed to bring the Exchange into alignment with international practice, add further flexibility to its offering, and to streamline processes from a client perspective.
The view of the Walkers' Channel Islands Listings Team is that the changes are a positive development for existing listings clients, to those considering new listings and their professional advisers.
Request for feedback on proposed fee rates
The JFSC is asking for feedback on its proposed 8.5% increase in fee rates for, amongst others, General Insurance Mediation Businesses, Money Service Businesses and Trust Company Businesses. The deadline for feedback is 24 December 2021. For more information, please click here.
Updates to the Sanctions Reporting Regime and Practical Guidance
A new Sanctions Compliance Reporting Form has been published by the Government of Jersey, replacing the old document. At the same time, the JFSC has updated the sanctions section of its website and its guidance notes to clarify certain aspects of the mandatory sanctions screening requirements. More information available here.
Jersey Employment Law Update: Paid leave, holidays and time limits
One of the key differences between Jersey employment law and that of the UK or Guernsey is in respect of holiday entitlements. A recent case from the Jersey Employment Tribunal focuses on two issues - entitlement to paid bank holidays, and claims for unpaid holidays.
Jersey Company Law - Changes to Streamline Prospectus Rules To Reflect UK & EU Regimes
Changes to streamline the Jersey prospectus rules so that they more closely reflect the regimes in the UK and across Europe took effect from midOctober 2021. The rules have been brought into effect following consultation and engagement between the Government, regulator and the wider financial services industry - the result is a new regime that creates six exemptions to the general requirement to produce a formal prospectus document where investment into a Jersey company is being invited.
Consultation on Changes to AML/CFT Handbooks
On 1 November 2021, the JFSC launched a consultation on proposed changes to the AML/CFT Handbooks, which is due to close on 7 January 2022. The proposed changes would merge existing Handbooks, extend the scope of the AML/CFT Codes of Practice, and add new rules in respect of electronic identification.
JFSC Feedback from Transaction Monitoring Questionnaire
A review by the JFSC in July 2021 identified both deficiencies and examples of good practice in the area of transaction monitoring. The Feedback Paper lists a number of actions that Boards and senior management should consider to enhance their systems and controls, including improvements to record-keeping, training and testing of relevant internal systems.
The revised versions of Guernsey's five key regulatory laws came into effect on 1 November 2021, being: The Protection of Investors (Bailiwick of Guernsey) Law, 2020; The Banking Supervision (Bailiwick of Guernsey) Law, 2020; The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2020; The Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020; and Insurance Business (Bailiwick of Guernsey) Law, 2002, and the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002. For further information you can read our briefing here.
The Guernsey Financial Services Commission has published revised rules, codes and guidance which accompany the new regulatory laws. The rules, codes and guidance came into effect on 1 November 2021.
Guernsey's Data Protection Regulator Approves New EU Standard Contractual Clauses
The Office of the Data Protection Authority in Guernsey has approved the European Commission's new standard contractual clauses for the international transfer of personal data to "third countries" which have not yet adopted data protection legislation that is equivalent to the EU's General Data Protection Regulation and so are not yet considered to have 'adequacy'. The ODPA has also published a helpful technical update on international data transfers which includes the current list of jurisdictions with adequacy. The New SCCs have a transitional period and controllers and processors must transition all existing contracts to the New SCCs by 27 December 2022.
GFSC - Thematic Review on Reporting Suspicion
The GFSC published report on the thematic review on the reporting of suspicion of money laundering or terrorist financing (undertaken during the second half of 2020) - it found that MLROs were suitably senior, qualified and independent. Link here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.