Control of
Borrowing (Jersey) Law 1947[1]
A LAW to provide for the regulation
of the borrowing and raising of money, the issue of securities, the admission
of members of bodies corporate and the continuance on Jersey of bodies
incorporated abroad, the circulation of offers of securities for subscription,
sale or exchange, the creation of partnership interests and the registration of
limited liability partnerships and for purposes connected with the matters
aforesaid[2]
Commencement
[see endnotes]
1 Interpretation
(1) In
this Law, unless the context otherwise requires, the following expressions have
the meanings hereby assigned to them, that is to say –
“Commission”
means the Jersey Financial Services Commission established by the Financial
Services Commission (Jersey) Law 1998;
“issue”
includes re-issue;
“limited liability company” means a
limited liability company registered under the Limited
Liability Companies (Jersey) Law 2018, and includes a series created
within that limited liability company under Article 12 of that Law;
“limited liability
partnership” means a limited liability partnership registered under the Limited
Liability Partnerships (Jersey) Law 2017;
“limited partnership”
and “partnership agreement” have the meanings respectively given to
them by the Limited
Partnerships (Jersey) Law 1994;
“LLC interest” has the same meaning as in
the Limited
Liability Companies (Jersey) Law 2018;
“Minister”
means the Minister for External Relations;
“register”, in
relation to securities, includes a register of issued bearer securities and
also includes any book in which securities are registered;
“registered”,
in relation to any security, includes inscribed;
“registered in
Jersey” means, in relation to securities, registered in a register in
Jersey;
“security”
includes shares, bonds, notes, debentures, debenture stock, LLC interests and
units under a unit trust scheme;
“share”
includes stock and any perpetual debenture or perpetual debenture stock;
“unit” means,
in relation to a unit trust scheme, any right or interest, (described whether
as a unit or otherwise) which may be acquired under the scheme, being a right
or interest created or issued for the purpose of raising money for the purposes
of the scheme or a right or interest created or issued in substitution (whether
directly or indirectly) for any right or interest so created or issued;
“unit trust scheme”
means any arrangement made for the purpose, or having the effect, of providing
facilities for the participation by persons, as beneficiaries under a trust in
profits or income arising from the acquisition, holding, management or disposal
of securities or any other property whatsoever.[3]
(2) Any
reference in this Law to the borrowing of money –
(a) includes a reference to the making of any
arrangement by which a sum which would otherwise be payable at any date is
payable at a later date, and includes, in particular, the making of any
arrangement by which the whole or any part of the price of any property is
allowed to remain unpaid either for a fixed period or indefinitely; but
(b) does not include a reference to the
acceptance by a person carrying on a banking undertaking of moneys to be placed
to the credit of a current or deposit account.
(2A) In
this Law –
(a) any
reference to a limited partnership within the meaning of the Limited
Partnerships (Jersey) Law 1994 includes a reference to a separate
limited partnership established in accordance with the Separate Limited
Partnerships (Jersey) Law 2011; and
(b) the
reference in Article 2(10)(b) to the Limited
Partnerships (Jersey) Law 1994 in respect of a limited partnership
includes a reference to the Separate Limited
Partnerships (Jersey) Law 2011 in respect of a separate limited
partnership.[4]
(2B) In
this Law –
(a) any
reference to a limited partnership within the meaning of the Limited
Partnerships (Jersey) Law 1994 includes a reference to an incorporated
limited partnership established in accordance with the Incorporated
Limited Partnerships (Jersey) Law 2011; and
(b) the
reference in Article 2(10)(b) to the Limited
Partnerships (Jersey) Law 1994 in respect of a limited partnership
includes a reference to the Incorporated
Limited Partnerships (Jersey) Law 2011 in respect of an incorporated
limited partnership.[5]
(3) A
person shall be deemed for the purpose of this Law to borrow or raise money in
Jersey if the money is made available in Jersey, or, in any such case as is
mentioned in paragraph (2), if the money would, but for the arrangement in
question, have been payable in Jersey, and, without prejudice to the preceding
provisions of this paragraph, a person shall also be deemed for the purposes of
this Law to borrow money in Jersey if the money is borrowed on the security of
property in Jersey.
(4) An
arrangement to provide any guarantee or to mortgage or charge any property to
secure the repayment of any sum borrowed before the arrangement is made, being
a sum which is already due when the arrangement is made, or which is payable
not later than 6 months, or such longer or shorter period as may, on the
recommendation of the Commission, be prescribed by Order of the Minister, after
the arrangement is made, shall be deemed for the purposes of paragraphs (2)
and (3) to be an arrangement by which that sum is payable at a date later than
it would otherwise have been payable.[6]
(5) A
sum which, at the time of, or by virtue of, the making of any arrangement, is
payable on demand or on the expiration of a fixed period after demand shall be
deemed for the purposes of the paragraphs (2), (3) and (4) to be payable
at the time of the making of the arrangement, or, as the case may be, on the
expiration of the fixed period after the making of the arrangement,
notwithstanding that no demand has been made.
(6) For
the purposes of this Law, the registration of a limited liability partnership
under the Limited
Liability Partnerships (Jersey) Law 2017 shall be deemed to be the
creation of a partnership interest for the purposes of the limited liability
partnership.[7]
(7) For
the purposes of this Law, the registration of a limited liability company under
the Limited
Liability Companies (Jersey) Law 2018 is taken to create an LLC
interest in the limited liability company.[8]
(8) In
this Law, references to a body corporate do not include a limited liability
company registered as a body corporate.[9]
2 Control of borrowing, etc.
(1) The
Minister may, on the recommendation of the Commission, make Orders for
regulating, subject to such exemptions as may be specified in the Orders, all
or any of the following transactions and acts, that is to say –
(a) the
borrowing of money in Jersey where –
(i) the payment is
secured by the creation of a simple conventional hypothec on real property in
Jersey, or
(ii) the
aggregate of the amount of money borrowed under the transaction, and of any
other amounts so borrowed (including amounts borrowed under transactions to
which the foregoing clause refers) by the same person in the previous 12
months, exceeds £10,000;
(b) the raising of money in Jersey by the issue,
whether in Jersey or elsewhere, by any body corporate, of any shares in that
body corporate;
(c) the issue for any purposes –
(i) by any body
corporate of any shares in or debentures or other securities of that body
corporate, if either the body corporate is incorporated under the law of
Jersey, or the shares, debentures or other securities are or are to be
registered in Jersey, or
(ii) by
any Government, other than the Government of the United
Kingdom or the States of any of the Channel Islands, of any securities of
that Government which are or are to be registered in Jersey;
(d) the
admission of any person to membership, otherwise than by reason of the issue or
transfer of shares, of a body incorporated in Jersey;
(e) the
issue to a body incorporated outside Jersey of a certificate of continuance
under Article 127O of the Companies
(Jersey) Law 1991;
(ea) the issue to a
limited liability body registered outside Jersey of a certificate of
continuance under Regulation 75 of the Limited
Liability Companies (General Provisions) (Jersey) Regulations 2022;
(f) the circulation in Jersey of any offer
for subscription, sale or exchange of –
(i) any shares in or
debentures or other securities of any body corporate not incorporated under the
law of Jersey, or
(ii) any
securities of any Government other than the Government of the United Kingdom or
the States of any of the Channel Islands:
Provided that sub-paragraph (a)
shall not apply to the borrowing of money by any person in the ordinary course
of his or her business from a person carrying on a banking undertaking.[10]
(2) An
Order made under paragraph (1) for regulating, subject as therein
mentioned, all or any of the transactions therein mentioned may –
(a) make
provision for the grant of a consent by the Commission for a transaction either
unconditionally or subject to such conditions as to the Commission seem
appropriate either generally or in any particular case;
(b) make
provision for the variation of conditions attached to a consent and the
attachment of new conditions;
(c) prescribe
conditions applicable to –
(i) all consents,
(ii) certain
classes of consents,
(iii) all
consents granted to certain persons or classes of persons,
(iv) all
consents granted in respect of certain transactions, or
(v) all consents granted in
respect of transactions with certain persons or classes of persons;
(d) make
provision for consents –
(i) to be revoked by the
Commission,
(ii) to
be limited so as to expire at the end of a specified period unless renewed;
(e) make provision requiring the payment of fees
published by the Commission in accordance with Article 15(5) of the Financial Services Commission
(Jersey) Law 1998.[11]
(3) Where
an Order made under paragraph (1) makes provision for the Commission to
grant a consent for a transaction either unconditionally or subject to
conditions, vary conditions attached to a consent, attach new conditions to a
consent or revoke or refuse to grant a consent, the Commission, in the
discharge of those functions, shall have regard to the need to protect the
integrity of Jersey in commercial and financial matters and the best economic
interests of Jersey and, in relation to the creation of a partnership interest
for the purposes of a limited liability partnership, the Commission shall also
have regard to the size of the limited liability partnership and to the status
of the applicant or the holder of the consent, as the case may be.[12]
(4) Where
a condition attached to a consent is varied or a new condition is attached to a
consent, or a consent is revoked, such variation or such new condition, or such
revocation, as the case may be, shall not take effect before the expiration
of –
(a) a
period of 3 months from the date on which notice in writing of the decision of
the Commission to make such variation or attach such new condition or revoke
such consent is given to the holder of the consent; or
(b) the
date on which an appeal (if any) is determined or abandoned,
whichever is later (but it
may take effect earlier at the request of the holder of the consent).[13]
(5) Where
the Commission refuses the grant of a consent, or attaches any condition to the
grant of a consent, or varies any such condition, or attaches a new condition,
or revokes a consent, the applicant or the holder of the consent, as the case
may be, may by notice in writing require the Commission to furnish to him or
her within 30 days a statement in writing of its reasons for that decision.[14]
(6) Nothing
in paragraph (4) or (5) derogates from or otherwise affects a condition
prescribed under paragraph (2)(c).[15]
(7) A
notice given under paragraph (5) more than 30 days after the notification
of the decision of the Commission was given shall have no effect.[16]
(8) Any
person aggrieved by such decision of the Commission may appeal to the Inferior
Number of the Royal Court, either in term or in vacation within 90 days after
the notification of the decision of the Commission was given, on the ground
that the decision of the Commission was unreasonable having regard to all the
circumstances of the case, and the decision of the Inferior Number of the Royal
Court shall be final and without further appeal, but without prejudice to the
right of the Inferior Number to refer the matter to the Superior Number of the
Royal Court.[17]
(9) The
provisions of this Article shall apply in relation to units under a unit trust
scheme as they apply in relation to shares in a body corporate, but
as if –
(a) any reference to the issue of shares in a
body corporate by that body corporate were a reference to an issue of units for
the purposes of the scheme; and
(b) any reference to shares in a body corporate
incorporated, or not incorporated, under the law of Jersey were a reference to
units issued under a scheme governed, or not governed, by the law of Jersey.
(10) The
provisions of this Article shall apply in relation to a partnership interest
under a limited partnership or a limited liability partnership as they apply in
relation to shares in a body corporate but as if –
(a) any reference to the issue of shares in a
body corporate by that body corporate were a reference to the creation of a
partnership interest for the purposes of the partnership; and
(b) any reference to shares in a body corporate
incorporated, or not incorporated, under the law of Jersey were a reference to
a partnership interest created under a limited partnership established, or not
established, in accordance with the Limited Partnerships (Jersey)
Law 1994 or under a limited liability partnership registered, or not
registered, in accordance with the Limited Liability Partnerships
(Jersey) Law 2017.[18]
(10A) This
Article applies in relation to an LLC interest in a limited liability company
as it applies in relation to shares in a body corporate as if –
(a) any reference to the issue of
shares in a body corporate by that body corporate were a reference to the
creation of an LLC interest in the limited liability company; and
(b) any reference to shares in a body
corporate incorporated, or not incorporated, under the law of Jersey were a
reference to an LLC interest created in a limited liability company registered,
or not registered, in accordance with the Limited
Liability Companies (Jersey) Law 2018.[19]
(11) The
provisions of the Schedule shall have effect in relation to Orders made under
this Article, but the rights of the persons concerned in any transaction shall
not be affected by the fact that the transaction was in contravention of any
such Orders.
3 Limitation of liability[20]
(1) No
person or body to whom this Article applies shall be liable in damages for
anything done or omitted in the discharge or purported discharge of any
functions under this Law or any enactment made, or purportedly made, under this
Law unless it is shown that the act or omission was in bad faith.
(2) This
Article applies to –
(a) the States;
(b) the Minister and any person who is, or is
acting as, an officer servant or agent in an administration of the States for
which the Minister is assigned responsibility, or performing any duty or
exercising any power on behalf of the Minister; and
(c) the Commission, any Commissioner or any person
who is, or is acting as, an officer, servant or agent of the Commission or
performing any duty or exercising any power on behalf of the Commission.
4 [21]
5 Citation
This Law may be cited as
the Control of Borrowing (Jersey) Law 1947[22].
Schedule[23]
PROVISIONS AS TO
ENFORCEMENT AND PENALTIES
1. Any
person who contravenes any provision of any Order made under this Law shall be
liable to imprisonment for a term not exceeding 5 years or to a fine or to both
such imprisonment and a fine.
2.
(1) The
Commission may give any person directions requiring him or her, within such
time and in such manner as may be specified in the directions, to furnish to
it, or to any person designated in the directions as a person authorized to
require it, any information in his or her possession or control which the
Commission or the person so authorized, as the case may be, may require for the
purpose of securing compliance with, or detecting evasion of, any Order made
under this Law:
Provided that if a person
required to give any information under this paragraph objects to the giving thereof
on the ground that it might tend to incriminate him or her, the person shall
not be bound to give that information.
Nothing in this paragraph
shall be taken to require any person who has acted as advocate or solicitor for
any person to disclose any privileged communication made to him or her in that
capacity.
(2) The
Commission may give to any person directions requiring him or her, within such
time and in such manner as may be specified in the directions, to produce such
books, accounts or other documents (hereinafter referred to as “documents”)
in his or her possession or control as may be required for the purpose of
securing compliance with, or detecting evasion of, any Order made under this Law
or by any person designated in the directions as a person authorized to require
them and any documents produced by a person in compliance with any such
requirements may be given in evidence against him or her notwithstanding that
they may tend to incriminate him or her.
Nothing in this paragraph
shall be deemed to require any person who has acted as advocate or solicitor
for any person to disclose any privileged communication made to him or her in
that capacity.
(3) If
the Bailiff is satisfied by information on oath given by an officer of the
Commission or with the authority of the Commission that there is reasonable
ground for suspecting that there are at any premises any documents which a person
ought to have produced under sub-paragraph (2) but has failed or refused
to produce, the Bailiff may issue a warrant authorizing any person or class of
persons named in the warrant to enter the premises specified in the information
(using such force as is reasonably necessary for the purpose) at any time
within one month from the date of the warrant, and to search the premises and
take possession of any documents appearing to be such documents as aforesaid or
take in relation thereto any other steps which may appear necessary for
preserving them and preventing interference therewith.
(4) Any
person who –
(a) fails or refuses to comply with any
requirements to furnish information or produce documents imposed on the person by or under this paragraph;
(b) with intent to evade the provisions of this paragraph
or any Order made under this Law, destroys, mutilates, defaces, secretes or
removes any documents; or
(c) obstructs any persons exercising any powers
conferred on them by or under this paragraph,
shall be liable to
imprisonment for a term not exceeding 5 years or to a fine or both such
imprisonment and a fine.
(5) Any
person who makes default in complying with a condition –
(a) imposed
on the person by the Commission pursuant to a power in that behalf in any Order
made under this Law; or
(b) prescribed
by any such Order,
shall be liable to
imprisonment for a term not exceeding 5 years or to a fine or to both such
imprisonment and a fine.
(6) Any
person who continues to make default in complying with a condition referred to
in sub-paragraph (5) after being convicted of that default shall be liable
to a fine for each day on which the default so continues or to imprisonment for
a term not exceeding 5 years or to both a fine and such imprisonment.
3.
(1) Any
person who knowingly or recklessly provides the Commission or any other person
entitled to information under this Law (or under an Order made under this Law)
with information that is false or misleading in a material particular shall be
guilty of an offence if the information is provided –
(a) in
purported compliance with a requirement imposed under this Law (or under
an Order made under this Law); or
(b) otherwise
than as mentioned in clause (a) but in circumstances in which the person
providing the information intends, or could reasonably be expected to know,
that the information would be used by the Commission for the purpose of
carrying out its functions under this Law (or under an Order made under
this Law).
(2) Any
person who knowingly or recklessly provides the Commission or any other person
with information that is false or misleading in a material particular shall be
guilty of an offence if the information is provided in connection with an
application for consent under an Order made under this Law.
(3) A
person who is guilty of an offence against this Article shall be liable to
imprisonment for a term not exceeding 5 years or a fine, or both.
4.
(1) Where
an offence under this Law (or under an Order made under this Law)
committed by a limited liability partnership or body corporate is proved to
have been committed with the consent or connivance of, or to be attributable to
any neglect on the part of –
(a) a person
who is a partner of the partnership, or director, manager, secretary or other
similar officer of the body corporate; or
(b) any person
purporting to act in any such capacity,
the person shall also be
guilty of the offence and liable in the same manner as the partnership or body
corporate to the penalty provided for that offence.
(2) Where
the affairs of a body corporate are managed by its members, sub-paragraph (1)
shall apply in relation to acts and defaults of a member in connection with his
or her functions of management as if he or she were a director of the body
corporate.
5.
(1) Any
person who aids, abets, counsels or procures the commission of an offence under
this Law (or under an Order made under this Law) shall also be guilty of
the offence and liable in the same manner as a principal offender to the
penalty provided for that offence.
(2) Nothing
in this paragraph affects the operation of paragraph 4(1) or (2).