Build even more effective supervision

In 2021, we will continue our extensive programme of improvements to make our supervisory work even more effective. This work falls under three headings: fighting financial crime, developing our supervisory approach and modernising our regulatory remit.

Fighting financial crime by:

• Progressing our preparation work for being assessed by MONEYVAL, including collating and reporting on the data we hold which relates to financial crime
• Building on our 2020 work to implement the FATF Recommendations to enhance Jersey’s AML/CFT regime
  • Working to implement additional changes to the AML/CFT Handbooks
  • Working with Government to prepare the ground for extending the money laundering regulation to VASPs, non-profit organisations, money/ value transfer services (MVTS) and Non-profit organisations (NPOs):
    • VASPs - Making recommendations to Government for a licensing regime, in line with FATF Recommendation 15,
      and preparing for its implementation in 2022. Legislation is expected to be in place by the end of 2021
    • NPOs– Undertaking further work to develop our recommendations to Government
    • MVTS (Amended Regime) - Making recommendations to Government to fully implement FATF Recommendation 14,
      for the new FATF definition of MVTS
• Increasing our engagement with Industry to develop local typologies of the risks which arise in Jersey and therefore strengthen our understanding of money laundering and terrorist financing risk in line with the findings from the National Risk Assessment
• Providing technical support to Government to finalise the National Risk Assessment for terrorist financing
• Consulting with Industry on an AML/CFT exemptions regime in order to develop recommendations for Government to bring exemptions line with the FATF Recommendations
• Advising Government on changes to the administrative enforcement powers/penalties with regard to money laundering control failings
• Continuing to develop our supervisors’ capabilities through structured training and development so we are recognised as an AML/CFT centre of excellence.

Developing our regulatory approach by:

Supporting the work that we outlined in the earlier section of this business plan to transform the way we supervise, in 2021 we will also be:

• Developing our own internal review process so that we can regularly assess how effective we are as a supervisor
• Starting the planning for enhancing Registry compliance/enforcement and breach monitoring
• Checking companies on our registers on a continual basis, particularly those that are considered to be more high risk
• Reducing our data processing and administrative burdens to make our dealings with Industry easier and more automated, so that we can more effectively and accurately manage data and workflows to focus on critical supervisory activity
• Continue to develop and strengthen the co-ordination between our Enforcement and Supervision teams
• Consulting on enhancements to our decision-making process to deliver efficiencies in the process which will, in turn, provide us with an opportunity to develop our enforcement strategy, which, given the JFSC focus on financial crime capability, will see a focus on AML related cases
• Mapping all authorisations processes and implementing efficiencies, following our 2020 review of how we grant licences
• Planning the requirements for any system development that needs to be delivered in 2022
• Developing and testing a multi-year data strategy to provide staff across the organisation with better insights to allow them to do their jobs better.

Modernising our regulatory remit

We have to continue to evolve in light of new challenges facing the Island and any potential responsibilities that we may take on in the future. 2021 looks set to be a year of legislative preparation for new and amended regulatory regimes:

• Control of Borrowing Order (CoBO) – We will complete our advice to Government on amendments to this critical piece of legislation for the protection of Jersey's global reputation. This will see a key distinction being made between non-financial services activities and financial services activities
• Jersey Resolution Authority and Depositor Compensation Scheme (New Regime) – We have indicated our willingness to support Government in the practical work of setting up a new Resolution Authority and this will require work from us in 2021 to implement Government plans
• Consumer lending - We will continue to advise Government on possible initiatives to add to the protections for borrowers in Jersey and plan for potential appropriate follow-up actions
• Pensions (new Regime) – There are three phases to this. The first is now likely to be in 2021 and will extend the application of FSJ Law Investment Business activity to all pension products i.e. all pension products will be considered “investments” for the purposes of Investment Business activity under the Financial Services (Jersey) Law 1998. Phase 2 is to extend the role of the Ombudsman to all pension products. Phase 3 is a product and service provider regulatory regime which would come in at
  the earliest in late 2021/early 2022
• Sustainable finance (amendment to funds and Investment business regimes) – Following our consultation and feedback received from
  Industry, the Code of Practice requirements will focus on disclosure and/or active measures to prevent “green washing”
• Investment business guidance - We will explore the potential for additional guidance on the duties of investment advisers.