PRESS RELEASE 23 February 2009
GUIDANCE NOTE: NATURAL PERSONS UNDERTAKING THE ACTIVITY OF ACTING AS A DIRECTOR
The Commission has today published a Guidance Note in respect of natural persons undertaking the activity of acting as a director under the Financial Services (Jersey) Law 1998 (the “FS(J)L”). The purpose of the Guidance Note is twofold:
- To publish for the first time the Commission’s interpretation of a number of areas of the FS(J)L with particular reference to certain phrases within Articles 2 and 7 of the FS(J)L.
- To explain the scope, rationale and implications of the main exemptions in place in respect of the FS(J)L, in terms of individuals acting as a director.
In addition to advising of the publication of the Guidance Note, this press release will also advise on a number of proposed amendments to the exemptions referred to above, which the Commission believe is necessary in order to bring greater clarity to this area of regulation. The Commission is also proposing to introduce an additional exemption, again with the purpose of bringing greater certainty to this area of financial services business regulation. The proposal is as follows:
Create a new exemption that introduces de–minimis provisions which will allow an individual to hold a maximum of six directorships (in addition to any that would otherwise be exempt) before the need to register is triggered.
Amendments to existing exemptions
- Amend the wording of the ‘Directors’ exemption contained in paragraph 13 of the Schedule to the Financial Services (Trust Company Business (Exemptions)) (Jersey) Order 2000.
Whilst the Commission believes that the wording successfully exempts directors of say, local florists, grocers, garages etc, there is the potential for individuals that may act as a director, on a professional basis, for more than one such company, not to be able enjoy this exemption. As the financial services regulations were never intended to catch such areas of activity, the Commission felt it necessary to amend the wording of this exemption to provide more explicit wording.
- Amend the wording of the ‘Connected Persons’ exemption contained in paragraph 1 of the Schedule to the Financial Services (Trust Company Business (Exemptions No 4)) (Jersey) Order 2000.
In reviewing the terms of this exemption, it would seem that the accompanying note could potentially result in misinterpretation, on the basis that the wording is perhaps too widely constructed, and may exempt directors of companies on a far wider basis than the ‘private arrangements’ it was designed to capture. As a result, the Commission believes it is of value to publish its interpretation of this exemption within the Guidance Note and would propose an amendment to this exemption to clarify this point.
- 3. Amend the wording of the Experienced Personal Adviser exemption contained in paragraph 4 (note 1) of the Schedule to the Financial Services (Trust Company Business (Exemptions No 2)) (Jersey) Order 2000, to more effectively enshrine the grandfathering nature of this exemption.
This exemption was crafted to accommodate “retired” individuals that were holding a handful of directorships or trusteeships as at 11 December 2000 (the date this exemption came into force). The majority of these engagements would have been a legacy from the individual’s previous employment within the financial services industry. Any individual not in this position, as at 11 December 2000, would not be able to enjoy the exemption and would be required to register to conduct this type of business. The Commission is of the view that the current wording of this exemption does not unequivocally reflect the intention behind this piece of legislation as described above.
The proposed amendments will be subject to a consultation process which the Commission will commence in the first half of the year. The consultation will be based on suggested legal drafting of an amended Exemptions Order.
- Ends -
For further information please contact: -
Debbie Sebire - Director, Trust Company Business
Tel: + 44 (0) 1534 822113
Fax: + 44 (0) 1534 822002