Regulatory Risk Committee Terms of Reference

Approved by the Board of Commissioners on 5 December 2024.

The Regulatory Risk Committee is primarily responsible for overseeing the adequacy and effectiveness of JFSC’s system of regulation (including Policy, Authorisations, Supervision, Enforcement and Registry divisional activities), and ensuring it is adhering to its Guiding Principles including reducing the risk to the public of financial loss and countering financial crime. It is through this lens that matters should be considered when deciding whether to bring forward items for the Committee’s attention.

Membership

The Regulatory Risk Committee (Committee) shall comprise at least four members.

Members should have appropriate knowledge, skills and expertise to fulfil their role as a member of the Committee. At least two members should have relevant regulatory experience and have a good knowledge and understanding of the local finance industry in Jersey. Neither the Chair of the Board of Commissioners (hereafter referred to as the Board) nor the Director General shall be a member of the Committee.

Members of the Committee are appointed by the Board, on the recommendation of the Nomination Committee, in consultation with the Chair of the Committee.

Only members of the Committee have the right to attend Committee meetings. However, the Director General, Executive Director of Supervision, Executive Director of Enforcement, Executive Director of Registry and the Chief Risk Officer will be invited to attend meetings of the Committee on a regular basis, and other individuals may be invited to attend all or part of any meeting as and when appropriate.

The Board appoints the Committee Chair. In the absence of the Committee Chair, the remaining members present will elect one of themselves to chair the meeting.

Secretary

The Commission Secretary, or their nominee, shall act as the secretary of the Committee and will ensure that the Committee receives information and papers in a timely manner.

Quorum

The quorum necessary for the transaction of business shall be three members.

Frequency of meetings

The Committee will meet at least three times a year at appropriate times, and otherwise, as required.

Notice of meetings

Meetings of the Committee will be called by the secretary of the Committee at the request of the Committee Chair or any of its members.

Unless otherwise agreed, notice of each meeting confirming the venue, time and date of the meeting, together with an agenda of items to be discussed and supporting papers, shall be forwarded to each member of the Committee and any other person required to attend, no later than five working days before the date of the meeting.

Minutes of meetings

The Commission Secretary shall minute the proceedings and decisions of all Committee meetings, including recording the names of those present and in attendance.

Draft minutes of Committee meetings shall be circulated to all members of the Committee and included in the next Committee meeting papers.

Duties

The Committee has the main duty of conducting oversight of the JFSC’s regulatory risk management approach, including its system of regulation and the effectiveness of its regulatory risk identification, assessment and response.

Regulatory risk management oversight

The Committee shall:

• Oversee the ability of the JFSC’s regulatory risk management framework to identify, assess, manage and mitigate regulatory risk overseen by the JFSC. It shall seek assurance on the principal regulatory risks the JFSC identifies as those to which it (and Jersey) may be exposed.
• Oversee the JFSC’s capability to identify and manage new and emerging regulatory risks.
• Advise on the likelihood and the impact of principal regulatory risks materialising, and the JFSC’s ability to manage and mitigate these risks to reduce the likelihood of their incidence or their impact.
• Evaluate the JFSC’s principal regulatory risks when assessing the JFSC’s future strategy and advise on the risk aspects of proposed changes to the JFSC’s strategy.

Regulatory risk effectiveness

The Committee shall:

• Set the JFSC’s overall regulatory risk appetite, tolerance and strategy, and advise on the principal and emerging risks the JFSC is willing to take in order to achieve its long-term strategic objectives.
• Re-assess the JFSC’s regulatory risk appetite on an annual basis.
• Oversee the effectiveness of JFSC’s system of regulation in mitigating and managing principal regulatory risks and seek assurance that the risk profile is consistent with the delivery of the JFSC’s Guiding Principles. To facilitate this, it shall receive regular reports in respect of:
  • Jersey’s regulated sector risk profile covering financial crime, prudential and conduct risk;
  • Policy, Supervision, Enforcement and Registry business plans and strategies;
  • Divisional performance reporting including measures and reporting on effectiveness;
  • External feedback; and
  • Performance against regulatory risk appetite.

Reporting responsibilities

The Committee Chair shall report on its proceedings after each meeting on all matters within its duties and responsibilities and shall report to the Board on how it has discharged its responsibilities.

The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit, where action or improvement is needed.

The Committee shall compile a report on its activities to be included in the JFSC’s annual report, describing the work of the Committee. In compiling the reports, the Committee shall:

• Report on the principal risks facing the JFSC.

Other matters

There will be direct access between the Committee and the Director General, Executive Director of Supervision, Executive Director of Enforcement, Executive Director of Registry and the Chief Risk Officer.

The Committee shall:

• Have access to sufficient resources in order to carry out its duties, including access to the Commission Secretariat for advice and assistance as required.
• Give due consideration to all relevant laws and regulations applicable to the JFSC.
• Oversee any investigation of matters which are within its terms of reference.
• Work and liaise, as necessary, with all other Board Committees.
• Ensure that a periodic evaluation of Committee performance is carried out.
• At least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

Authority

The Committee is authorised to:

• Request the attendance of any JFSC employee at a meeting of the Committee and/or seek any information it requires from any employee of the JFSC in order to perform its duties.
• Delegate any matter or matters to another Committee or person(s) as it deems appropriate.
• Obtain, at the JFSC’s expense, independent legal or other professional advice on any matter within its terms of reference, if it believes it necessary to do so.