Jersey Law
32/1998
INVESTMENT
BUSINESS (JERSEY) LAW 1998
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ARRANGEMENT OF ARTICLES
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PART I
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PRELIMINARY
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Definitions,
exemptions and functions
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1.
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General
interpretation
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2.
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Meaning
of “investment” and “investment business”
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3.
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Exemptions
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4.
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Power
to vary definitions and exemptions
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5.
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Functions
of the Commission
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5A.
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Limitation
of liability
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PART II
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REGISTRATION OF INVESTMENT
BUSINESS
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Investment business
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6.
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Prohibition
of carrying on unauthorised investment business
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Registration
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7.
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Application
for registration
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8.
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Registration
or refusal of application, or revocation of registration
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9.
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Conditions
of registration
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10.
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Procedure
on refusal or revocation, or new or varied condition
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PART III
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SUPERVISION OF INVESTMENT BUSINESS
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Principal persons and shares
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11.
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Objection
to principal person and to changes in holdings
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12.
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Notification
of change of principal person and changes in holdings
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13.
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Failure
to notify change of principal person or changes in holdings
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14.
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Powers
of Commission and Court in respect of shares
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Accounts and Auditors
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15.
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Power
to make Orders relating to accounts and auditors
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16.
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Communication
by auditors, accountants and others with the Commission
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Powers, controls, misleading
statements etc.
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17.
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Codes
of practice
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18.
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Client
assets
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19.
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Contracts
made by or through unregistered persons
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20.
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Power
to issue directions
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21.
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Injunctions
and remedial orders
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22.
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Public
statements.
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23.
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Powers
of intervention
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24.
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Compensation
schemes
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25.
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False
information and failure to supply information
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26.
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Regulations
regarding recission of agreements and withdrawal of offers
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27.
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Misleading
statements and practices
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28.
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Control
of advertising
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Information and investigations
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29.
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General
power to require provision of information and documents
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30.
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Investigations
on behalf of the Commission
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31.
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Entry
and search of premises
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32.
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Obstruction
of investigations
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33.
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Co-operation
with relevant supervisory authority
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Restrictions on disclosure of
information
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34.
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Restricted
information
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35.
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Permitted
disclosures
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36.
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Information
supplied to Commission by relevant overseas authority
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PART IV
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SUPPLEMENTARY
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37.
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Service
of notices
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38.
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Legal
proceedings
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39.
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Orders
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40.
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Transitional
provisions
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41.
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Consequential
amendments
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42.
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Short
title and commencement
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SCHEDULES
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FIRST
SCHEDULE – Investments
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SECOND
SCHEDULE – Exemptions
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THIRD
SCHEDULE – Consequential amendments of other enactments
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INVESTMENT
BUSINESS (JERSEY) LAW 1998
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A LAW to
make provision for the supervision of investment business, and generally to
provide for purposes connected therewith and incidental thereto, sanctioned by
Order of Her Majesty in Council of the
21st day of OCTOBER 1998
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(Registered on the
20th day of November 1998)
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STATES OF JERSEY
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The 2nd day of June 1998
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THE
STATES, subject to
the sanction of Her Most Excellent Majesty in Council, have adopted the
following Law –
PART I
PRELIMINARY
Definitions,
exemptions and functions
ARTICLE 1
General
interpretation
(1) For
the purposes of this Law –
“applicant”
has the meaning given in Article 7;
“associate”,
in relation to a person means –
(a) the person’s
husband, wife, child or stepchild;
(b) his partner;
(c) any company of which he
is a director;
(d) where the person is a
company, any director or employee of the company, any company in the same group
as the company, and any director or employee of such a company; and
(e) any person with whom
the first mentioned person has an agreement, arrangement or other obligation
–
(i) to act together
in exercising voting power;
(ii) with respect to the
acquisition, holding or disposal of shares or other interests in a body
corporate, partnership or other association;
“auditor”
means a person qualified under Article 113 of the Companies (Jersey) Law 1991 for appointment as auditor of a
company under Article 109 of that Law;
“client”
means any person with or for whom a registered person transacts or has
transacted investment business;
“client
asset” means any property belonging to a client including monies and
investments;
“collective
investment fund” has the meaning given in Article 2 of the Collective
Investment Funds (Jersey) Law 1988;
“the
Commission” means the Jersey Financial Services Commission established by
the Financial Services Commission (Jersey) Law 1998;
“the
Committee” means the Finance and Economics Committee;
“company”
(except for the purposes of paragraph 1 of the First Schedule) means any body
corporate incorporated with or without limited liability in any part of the
world;
“Court”
means the Royal Court;
“documents”
includes accounts, deeds, writings and information recorded in any form and, in
relation to information recorded otherwise than in legible form, references to
its provision or production include references to providing or producing a copy
of the information in legible form;
“group”
in relation to a company, means that company, any other company which is its
holding company or subsidiary and any other company which is a subsidiary of
that holding company;
“holding
company” has the meaning given in Article 2 of the Companies (Jersey) Law
1991;
“industrial
and provident society” means a society registered or deemed to be
registered under the Industrial and Provident Societies Acts 1965 to 75 as
applied to the Island by the Industrial and Provident Societies (Channel
Islands) Order 1965;
“investment”
has the meaning given in Article 2, subject to any Order under Article 4;
“investment
advertisement” means any advertisement containing –
(a) an invitation to
transact investment business to which this Law applies; or
(b) information which is
intended or might reasonably be presumed to be intended to lead directly or
indirectly to the transaction of such investment business,
and includes any
means of bringing such an invitation or such information to the notice of any
person and references to an advertisement shall be construed accordingly;
“investment
business” has the meaning given in Article 2, subject to Article 3 and to
any Order under Article 4;
“partnership”
includes a partnership constituted under the law of a country or territory
outside the Island;
“prescribed”
means prescribed by Order of the Committee on the recommendation of the
Commission;
“principal
person” means –
in relation to a
person –
(a) being a sole trader,
the proprietor;
(b) being a company –
(i) a person who,
either alone or with any associate or associates –
(A) directly or indirectly holds
ten per cent or more of the share capital issued by the company; or
(B) is entitled to exercise or
control the exercise of not less than ten per cent of the voting power in
general meeting of the company or of any other company of which it is a
subsidiary; or
(C) has a holding in the company
directly or indirectly which makes it possible to exercise significant
influence over the management of the company;
(ii) a director or
equivalent by whatever name called;
(iii) a person in accordance with
whose directions, whether given directly or indirectly, any director of the
company, or director of any other company of which the company is a subsidiary,
is accustomed to act (but disregarding advice given in a professional
capacity);
(c) being a partnership
–
(i) a partner;
(ii) where a partner is a
company, any person who, in relation to that company, falls within
subparagraphs (i), (ii) or (iii) of paragraph (b); and
in relation to a
person whose registered office and principal place of business is outside the
Island, includes a person who, either alone or jointly with one or more other
persons, is responsible for the conduct of the person’s investment
business in the Island; and
in relation to a
person who has become bankrupt, includes a person who has been appointed as
liquidator or administrator of the person’s affairs;
“registered
person” means a person registered by the Commission under Article 8 and,
where paragraph (1) of Article 40 applies, includes an applicant to whom that
paragraph applies for the time being, and “registered” shall be construed
accordingly;
“registration”
means registration by the Commission under this Law, and “terms of
registration”, in a case where paragraph (1) of Article 40 applies, shall
be construed as a reference to the terms of a person’s application;
“relevant
supervisory authority”, in relation to a country or territory outside the
Island means an authority discharging in that country or territory supervisory
functions in respect of banking, insurance or investment business or other
financial services corresponding to those of the Commission;
“shareholder
controller” has the meaning given by sub-paragraph (i) of paragraph (b)
of the definition of “principal person”;
“subsidiary”
has the meaning given in Article 2 of the Companies (Jersey) Law 1991;
“unit”
has the meaning given in Article 1 of the Collective Investment Funds (Jersey)
Law 1988.
(2) Unless
the context otherwise requires, references in this Law to any other enactment
shall be construed as references to that enactment as amended, extended or
applied by or under any other enactment and to any enactment which repeals and
re-enacts the first-mentioned enactment with or without further amendment.
(3) A
reference in this Law to a numbered Article or Schedule without further
identification, is a reference to the Article or Schedule so numbered in this
Law.
(4) A
reference in any Article or other division of this Law to a paragraph,
sub-paragraph or note by number or letter only, and without further
identification, is a reference to the paragraph, sub-paragraph or note of that
number or letter contained in the Article or division of this Law in which such
reference occurs.
(5) In
this Law a note contained in a paragraph of a Schedule forms part of that
paragraph.
ARTICLE 2
Meaning of
“investment” and “investment business”
(1) In
this Law, unless the context otherwise requires, “investment” means
any asset, right or interest falling within any paragraph of the First Schedule
and not excepted by virtue of further provisions contained in that paragraph.
(2) Subject
to Article 3, for the purposes of this Law, “investment business”
means the carrying on of any of the following activities, by way of business
–
(a) dealing in investments,
that is, buying, selling, subscribing for or underwriting investments, either
as principal or as agent;
(b) discretionary
investment management, that is, deciding as agent to buy, sell, subscribe for
or underwrite investments on behalf of a principal;
(c) giving investment
advice, that is, giving to persons in their capacity as investors or potential
investors advice on the merits of –
(i) the purchase,
sale, subscription for or underwriting of a particular investment; or
(ii) the exercise of rights
conferred by an investment, to acquire, dispose of, underwrite or convert an
investment.
(3) In
sub-paragraph (a) of paragraph (2) –
(a) “buying”
includes any acquisition;
(b) “selling”
includes any disposal.
(4) In
sub-paragraph (b) of paragraph (3) “disposal” includes –
(a) in the case of an
investment consisting of rights under a contract or other arrangements,
assuming the corresponding liabilities under the contract or arrangements;
(b) in the case of any
other investment, issuing or creating the investment or granting the rights or
interests of which it consists;
(c) in the case of an
investment consisting of rights under a contract, surrendering, assigning or
converting those rights.
ARTICLE 3
Exemptions
The activities
described in the Second Schedule shall not be treated as investment business
for the purposes of this Law, to the extent which is respectively specified for
them in that Schedule.
ARTICLE 4
Power to vary
definitions and exemptions
(1) The
Committee may, on the recommendation of the Commission, by Order amend –
(a) the exemptions
conferred by –
(i) clause (ii) of
sub-paragraph (a) of paragraph (2) of Article 6; and
(ii) sub-paragraph (b) of
paragraph (2) of Article 6; and
(b) the First and Second
Schedules.
(2) The
States may by Regulations amend the definitions and ancillary provisions in
Articles 1 and 2.
(3) An
Order or Regulations made under this Article may contain different provisions
for different classes of person, of business or profession, or of investment
business, or with respect to any provisions of this Law.
(4) An
Order or Regulations under this Article may contain such transitional,
incidental or supplementary provisions as the Commission or the States, as the
case may be, thinks necessary or expedient, and may exclude or modify the
effect of the Order or the Regulations, as the case may be, on any other
enactment which is expressed to have effect in relation to investment business
within the meaning of this Law.
ARTICLE 5
Functions of the
Commission
The Commission
shall have the powers conferred on it by this Law and the duty generally to
supervise the persons registered by it in the exercise of those powers.
ARTICLE 5A
Limitation of
liability
(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 Committee, any
member of the Committee, or any person who is, or is acting as, an officer,
servant or agent of the Committee or performing any duty or exercising any
power on behalf of the Committee; and
(c) the Commission, any
Commissioner or any person who is, or is acting as, an officer, servant or
agent of the Commission or who is a person appointed by the Commission to
conduct an investigation under Article 30 or who is performing any duty or
exercising any power on behalf of the Commission.
PART II
REGISTRATION
OF INVESTMENT BUSINESS
Investment
Business
ARTICLE 6
Prohibition of carrying
on unauthorised investment business
(1) Subject
to paragraph (2), and to paragraph (1) of Article 40 –
(a) no person shall carry
on investment business in or from within the Island; and
(b) no person who is a
company incorporated in the Island shall carry on such business in any part of
the world,
unless that
person is for the time being a registered person under this Law, and acting in
accordance with the terms of his registration.
(2) This
Law shall not apply to –
(a) the doing of anything
by or on behalf of –
(i) the States, the
Viscount or the Judicial Greffier; or
(ii) subject to such
conditions or restrictions as may be prescribed, any other prescribed person or
institution;
(b) subject to such
conditions or restrictions as may be prescribed, any prescribed transaction.
(3) Any
person who holds himself out as carrying on investment business in or from
within the Island, and any company incorporated in the Island which holds
itself out as carrying on investment business shall, for the purposes of this
Article, be treated as carrying on such business.
(4) A
person who contravenes this Article shall be guilty of an offence and liable to
imprisonment for a term not exceeding seven years or a fine, or both.
Registration
ARTICLE 7
Application for
registration
(1) A
person to whom this Law applies who intends to carry on investment business
(referred to in this Law as an “applicant”) shall make an
application to the Commission to be registered under Article 8 for the purposes
of this Law.
(2) The
Committee may, on the recommendation of the Commission, prescribe classes of
investment business in respect of which application may be made.
(3) An
application under paragraph (1) shall –
(a) be in such form as the
Commission may from time to time determine;
(b) contain or be
accompanied by such information and documents as the Commission may require,
relating to the applicant and his business, to persons who are principal
persons in relation to the applicant and verified in such manner as the
Commission may require; and
(c) be accompanied by such
fees as may be prescribed.
(4) At
any time after receiving an application and before determining it the
Commission may, at its discretion, by written notice order the applicant or any
person who is or is to be a principal person in relation to the applicant to
provide such additional information or documents as the Commission reasonably
requires for the determination of the application, verified in such manner as
the Commission may require, and such requirements may differ as between
different applications.
(5) The
Commission may by written notice require the applicant or any person who is to
be a principal person in relation to the applicant to provide a report by an
auditor or accountant, or other qualified person approved by the Commission, on
such aspects of any information and documents required by or under paragraph
(3) or (4) as the Commission may specify.
(6) An
applicant who, while his application is awaiting determination by the
Commission under Article 8 –
(a) determines to bring
about any alteration in; or
(b) becomes aware of any
event which may affect in any material respect,
any information
or documents supplied by him to the Commission in connection with the
application shall forthwith give written notice of that matter to the
Commission.
(7) An
applicant may, by written notice to the Commission, withdraw his application
under this Article at any time before it is granted or refused, but Article 40
shall not apply to any fresh application made by that applicant, except insofar
as the Commission so directs in writing.
(8) Fees
payable under this Article shall be paid to the Commission.
ARTICLE 8
Registration or
refusal of application, or revocation of registration
(1) On
an application under Article 7, the Commission may either register a person
with or without attaching conditions under paragraph (2) of Article 9 or may
refuse to register a person.
(2) Whenever
the Commission registers a person it shall issue to that person a registration
certificate.
(3) The
Commission may refuse to register a person on one or more of the following
grounds, namely that –
(a) having regard to the
information before the Commission as to the –
(i) integrity,
competence, financial standing, structure and organisation of the applicant;
(ii) persons employed by or
associated with the applicant for the purposes of his business or who are
principal persons in relation to the applicant;
(iii) description of business which
the applicant proposes to carry on, the Commission is not satisfied that the
applicant is a fit and proper person to be registered;
(b) the applicant has at
any time and whether or not in relation to the application, in any case where
information was required under this Law in any connection –
(i) failed to provide
any such information; or
(ii) provided to the
Commission information which was untrue or misleading in any material
particular;
(c) the applicant has at
any time failed to comply with any condition prescribed or attached under
Article 9 to a current or previous registration held by him or prescribed or
imposed under paragraph (2) of Article 40 in any material respect;
(d) the applicant or any
person employed by or associated with him for the purposes of his business has
been convicted –
(i) of an offence under
this Law; or
(ii) of any offence
involving dishonesty;
(e) it appears to the
Commission, as a result of information provided in pursuance of requirements of
or under Article 7, or information otherwise obtained, that –
(i) in the best
interests of persons who may transact investment business with the applicant;
(ii) in order to protect the
reputation and integrity of the Island in financial and commercial matters; or
(iii) in the best economic
interests of the Island;
the applicant
should not be registered; or
(f) the Commission
has reason to believe that at any time there has been a failure on the part of
the applicant to follow a Code of Practice issued under Article 17.
(4) The
Commission may revoke a registration under this Law at any time –
(a) at the request of the
registered person;
(b) if the registered
person has not commenced his business in or from within the Island within one
year of the date of his registration;
(c) if the registered
person ceases to conduct his business in or from within the Island;
(d) if the registered
person is a company incorporated in the Island and ceases to conduct his
business in any part of the world;
(e) on one or more of the
grounds set out in paragraph (3), which shall apply in such a case with the
substitution for references to the applicant of references to a registered
person;
(f) if there is a
failure to comply with a notice of objection served under Article 11; or
(g) without prejudice to
paragraph (7), if the registered person fails to pay any fee prescribed under
paragraph (6).
(5) Where,
under this Article, the Commission refuses to register a person or revokes a
registration it shall give notice in writing to the applicant or registered
person concerned.
(6) The
Committee may, on the recommendation of the Commission, prescribe fees to be
paid by a registered person, and the intervals at which such fees are to be
paid.
(7) If
a registered person fails to pay any fee prescribed under paragraph (6) there
shall be payable by that person a prescribed late payment fee.
(8) Fees
payable under this Article shall be paid to the Commission.
ARTICLE 9
Conditions of
registration
(1) The
Committee may, on the recommendation of the Commission, –
(a) prescribe conditions
which shall apply to registered persons and to the carrying on of investment
business by registered persons; and
(b) in like manner, and
from time to time, vary any such condition, or prescribe new conditions; and
such conditions
may make different provision for different classes of persons, or for different
classes of investment business.
(2) The
Commission may attach conditions to any particular grant of registration under
Article 8, and may from time to time vary any such condition or attach new
conditions.
(3) Where,
under paragraph (2), the Commission attaches a condition to a registration,
varies a condition attached to a registration, or attaches a new condition, it
shall give notice in writing to the registered person concerned.
(4) If
any registered person fails to comply with any condition prescribed under
paragraph (1) or attached under paragraph (2), he shall for each such
contravention be liable to imprisonment for a term not exceeding two years or a
fine, or both.
(5) The
record of the conviction of any person for an offence under paragraph (4) shall
be admissible in any civil proceedings as evidence of the fact of the breach of
a condition prescribed or Attached under this Article.
(6) Conditions
prescribed under paragraph (1) or attached under paragraph (2) may indicate
that a Code of Practice issued under Article 17 is to be wholly or partly
disregarded for the purposes of paragraph (4) of that Article.
ARTICLE 10
Procedure on
refusal or revocation, or new or varied condition
(1) Where
the Commission, acting under Article 8, revokes a registration, or, acting
under paragraph (2) of Article 9, attaches a new condition to the registration
of a particular person or varies any condition so attached, subject to
paragraph (4), such revocation, new condition or variation shall not take
effect before the expiration of –
(a) a period of one month
from the date on which notice in writing was given to the registered person
under paragraph (5) of Article 8, or, as the case may be, under paragraph (3)
of Article 9;
(b) the date on which any
appeal against the revocation, new condition or variation is determined or
withdrawn,
whichever is
later, unless the registered person requests that it should take effect at an
earlier date.
(2) Where
the Commission –
(a) acting under Article 8,
refuses to register a person or revokes a registration; or
(b) acting under paragraph
(2) of Article 9, attaches a condition (or a new condition) to the registration
of a particular person or varies any condition so attached,
the applicant or
the registered person, as the case may be, may require the Commission to
furnish him within fourteen days with a statement in writing of its reasons for
that decision.
(3) Any
person aggrieved by such refusal or revocation, or by the conditions attached
to his registration, or by any new condition so attached or by any variation of
such conditions, may appeal to the Court, either in term or in vacation, within
one month from the date on which notice in writing has been given to him under
paragraph (5) of Article 8 or, as the case may be, under paragraph (3) of
Article 9 on the ground that the decision of the Commission was unreasonable
having regard to all the circumstances of the case.
(4) If,
on the application of the Commission, the Court is satisfied that it is
desirable in the best interests of persons who have transacted or may transact
investment business with a registered person that paragraph (1) should not have
effect, or should cease to have effect in a particular case, or that the period
suggested in sub-paragraph (a) of that paragraph should be increased, the Court
may so order.
(5) An
order under paragraph (4) may be made without prior notice to and without
hearing the registered person concerned.
(6) Where
an order is made under paragraph (4) it shall have immediate effect but any
person aggrieved by such an order may apply to the Court, either in term time
or in vacation, to vary or set aside the order on the ground that the order was
unreasonable having regard to all the circumstances of the case.
(7) On
an application under this Article, the Court may make such order as it thinks
fit.
(8) Nothing
in paragraph (1) or (2) derogates from or otherwise affects a condition
prescribed under paragraph (1) of Article 9.
PART III
SUPERVISION
OF INVESTMENT BUSINESS
Principal persons
and shares
ARTICLE 11
Objection to
principal person and to changes in holdings
(1) Where
it appears to the Commission at any time that, on the information before it,
and having regard to the matters set out in paragraph (3) of Article 8 (grounds
for refusal to grant registration), a person who is a principal person in
relation to a registered person or in respect of whom notice has been given
that he will become such a principal person is not a fit and proper person to
be a principal person in relation to a registered person, the Commission shall
serve on that person and on the registered person concerned a written notice of
objection, directing that he shall not continue to be, or shall not become, a
principal person.
(2) Following
receipt of a notice under paragraph (2) or (3) of Article 12 that a person has
increased his holding, or is about to do so, or that he is about to reduce or
dispose of his holding, the Commission may serve on that person and on the
registered person concerned a written notice of objection, directing that he
shall not continue to have such increased holding, or shall not increase,
reduce, or dispose of his holding, as the case may be.
(3) A
notice of objection served on a person directing that he shall not continue to
be a principal person or shall not continue to have an increased holding shall,
subject to paragraph (4), not take effect before the expiration of –
(a) a period of one month
from the date of the notification being given to the person;
(b) the date on which an
appeal under paragraph (10) against the notification is determined or
withdrawn;
whichever is the
later, unless the person to whom the notice relates requests that it should
take effect at an earlier date.
(4) If,
on the application of the Commission, the Court is satisfied that it is
desirable in the best interests of persons who have transacted or may transact
investment business with a registered person that paragraph (3) should not have
effect, or should cease to have effect in a particular case, or that the period
specified in sub-paragraph (a) of that paragraph should be increased, the Court
may so order.
(5) An
order under paragraph (4) may be made without prior notice to and without
hearing the registered person concerned.
(6) Where
an order is made under paragraph (4) it shall have immediate effect but any
person aggrieved by such an order may apply to the Court, either in term time
or in vacation, to vary or set aside the order on the ground that the order was
unreasonable having regard to all the circumstances of the case.
(7) On
an application under this Article, the Court may make such order as it thinks
fit.
(8) A
notice of objection shall –
(a) if served under
paragraph (1), and subject to paragraph (9), specify the reasons for which it
appears to the Commission that the person in question is not fit and proper;
(b) if served under
paragraph (2), and subject to paragraph (9), specify the reasons for such
objection;
(c) draw the attention of
the person to whom or to whose holding objection is taken and of the registered
person to the provisions of paragraphs (3) and (4) of Article 8, if
appropriate; and
(d) give particulars of the
rights of appeal conferred by paragraph (10).
(9) Sub-paragraphs
(a) and (b) of paragraph (8) shall not require the Commission to include in its
reasons for objection any confidential information the disclosure of which
would, in the Commission’s opinion, be prejudicial to a third party.
(10) Any
person aggrieved by a notice served on him under this Article may appeal to the
Court, either in term or in vacation, within one month from the date on which
such notice was given, on the ground that the decision of the Commission is
unreasonable having regard to all the circumstances of the case; but this
paragraph shall not apply to a person in any case in which he has failed to
give a notice or become or continued to be a principal person or increased,
reduced or disposed of his holding, in circumstances in which his doing so
constitutes an offence under Article 13.
ARTICLE 12
Notification of
change of principal person and changes in holdings
(1) No
person shall become a principal person in relation to a registered person
unless he has notified the Commission in writing of his intention to become
such a principal person and the Commission has notified him in writing that
there is no objection to his becoming such a principal person.
(2) No
person who is a shareholder controller shall increase, reduce or dispose of his
holding in the company concerned so that the proportion of the share capital or
voting rights held by him in the company reaches, exceeds or falls below 20 per
cent, 33 per cent or 50 per cent, or so that the company becomes the subsidiary
of such person or ceases to be such subsidiary, as the case may be, unless he
has notified the Commission in writing of his intention to increase, reduce or
dispose of such holding, as the case may be, and the Commission has notified
him in writing that there is no objection to his so doing.
(3) Subject
to paragraph (5), a registered person shall, before the end of one month
beginning with the day on which he becomes aware that any person has become or
is about to become, or has ceased to be a principal person in relation to him,
or has increased, reduced or disposed of his holding, as the case may be, or is
about to do so for the purposes of paragraph (2), give written notice to the
Commission of that fact.
(4) For
the purposes of paragraphs (1) and (3) a person shall be treated as –
(a) becoming a principal
person in relation to a registered person if, being a principal person in one
or more capacities, he becomes a principal person in any additional capacity;
and
(b) ceasing to be a
principal person in relation to a registered person if, being a principal
person in one or more capacities, he ceases to be a principal person in one or
more such capacities.
(5) The
obligations imposed by paragraph (3) shall not apply in any case where a
registered person has complied with an equivalent obligation under another
enactment under which the Commission exercises a supervisory function or where
the Commission by notice in writing waives the obligations, wholly or in part.
(6) A
notice under paragraph (1), (2) or (3) that a person has become or is about to
become a principal person, or has increased, reduced or disposed of his holding
or is about to do so, as the case may be, shall include such information
regarding the person in question as may be required by the Commission.
(7) A
notice under paragraph (2) or (3) that a person has ceased to be a principal
person or has reduced or disposed of his holding or is about to do so, as the
case may be, shall include a statement of the reasons for the change.
(8) Following
receipt of a notice under paragraph (1), (2) or (3), the Commission may, by
giving written notice, require the person concerned or the registered person to
provide such additional information or documents as the Commission may require
in order to decide whether to serve a notice of objection under Article 11.
(9) A
notice given by the Commission under paragraph (1) or (2) that there is no
objection shall lapse if the person concerned does not become a principal
person, or the increase, reduction or disposal, as the case may be, does not
take place within one year following the giving of the notice by the
Commission.
ARTICLE 13
Failure to notify
change of principal person or changes in holdings
(1) A
registered person who fails to give a notice required by paragraph (3) of
Article 12 shall be guilty of an offence and liable to imprisonment for a term
not exceeding six months or a fine, or both.
(2) Any
person who –
(a) fails to give a notice
required by paragraph (1) or (2) of Article 12 or becomes a principal person,
or increases, reduces or disposes of his holding before having been served with
a notice by the Commission under paragraph (1) or (2) of Article 12, as the
case may be; or
(b) becomes or continues to
be a principal person or continues to have an increased holding, or increases,
reduces or disposes of, his holding, as the case may be, following service on
him of a notice of objection under Article 11 in that connection,
shall be guilty
of an offence.
(3) A
person shall not be guilty of an offence under paragraph (2) if he shows that
he did not know of the acts or circumstances by which he became a principal
person or whereby his holding was increased, reduced or disposed of, as the
case may be; but where a person subsequently becomes aware of the relevant acts
or circumstances he shall be guilty of an offence unless he gives the Commission
written notice of the fact that he has become such a principal person or
increased, reduced or disposed of his holding, as the case may be, within
fourteen days of becoming aware of that fact.
(4) A
person guilty of an offence under paragraph (2) or (3) shall be liable to
imprisonment for a term not exceeding two years or a fine, or both.
ARTICLE 14
Powers of
Commission and Court in respect of shares
(1) The
powers conferred by this Article shall be exercisable where a person has
contravened paragraph (2) of Article 13 and –
(a) the registered person
concerned is a company; and
(b) the person concerned is
a shareholder controller of that company.
(2) The
Commission may, by notice in writing served on the person concerned, direct
that any specified shares to which this Article applies shall, until further
notice, be subject to one or more of the following restrictions –
(a) any transfer of, or
agreement to transfer, those shares or, in the case of unissued shares, any
transfer of or agreement to transfer the right to be issued with them, shall be
void;
(b) no voting rights shall
be exercisable in respect of the shares;
(c) no further shares shall
be issued in right of them or in pursuance of any offer made to their holder;
(d) except in liquidation,
no payment shall be made of any sum due from the registered person on the
shares, whether in respect of capital or otherwise.
(3) Subject
to paragraph (4), the Court may, on the application of the Commission, order
the sale of any specified shares to which this Article applies and, if they are
for the time being subject to any restrictions under paragraph (2), that they
shall cease to be subject to those restrictions.
(4) No
order shall be made under paragraph (3) in a case where a notice of objection
was served under Article 11 –
(a) until the end of the
period within which an appeal can be brought against the notice of objection;
and
(b) if such an appeal is
brought, until it has been determined or withdrawn.
(5) Where
an order has been made under paragraph (3) the Court may, on the application of
the Commission, make such further order relating to the sale or transfer of the
shares as it thinks fit.
(6) Where
shares are sold in pursuance of an order under this Article the proceeds of
sale, less the costs of the sale, shall be paid to the Viscount for the benefit
of the persons beneficially interested in them; and any such person may apply
to the Court for an order that the whole or part of the proceeds be paid to him
by the Viscount.
(7) This
Article applies –
(a) to all shares in the
registered person referred to in paragraph (1) held by the person concerned, or
by any associate of his, which were not so held immediately before he became a
principal person, or increased his holding, or which were so held immediately before
he reduced or disposed of his holding, as the case may be; and
(b) where the person
concerned became a principal person, or increased his holding, or reduced, or
disposed of his holding, as a result of the acquisition or disposal by him or
any associate of his of shares in another company, to all the shares in that
company which are held by him or any associate of his and were not so held
before he became a principal person or increased his holding, or which were so
held immediately before he reduced or disposed of his holding.
(8) A
copy of the notice served on the person concerned under paragraph (2) shall be
served on the registered person referred to in paragraph (1) and on any company
referred to in sub-paragraph (b) of paragraph (7) and, if it relates to shares
held by an associate of the principal person concerned, on that associate.
(9) Any
person who fails to comply with a notice served on him under paragraph (2) or
an order made under paragraph (3) shall be guilty of an offence and shall be liable
on conviction to imprisonment for a term not exceeding two years or a fine, or
both.
ARTICLE 15
Power to make
Orders relating to accounts and auditors
(1) The
Committee may, on the recommendation of the Commission, by Order provide for
matters relating to the accounting and audit of registered persons.
(2) Without
prejudice to the generality of paragraph (1), an Order under paragraph (1) may
provide for –
(a) the keeping of
accounting records by registered persons;
(b) the duty of registered
persons to prepare annual financial statements giving a true and fair view of
the registered person’s affairs;
(c) the qualification of
auditors and their appointment by registered persons;
(d) the form and content of
auditors’ reports to be obtained by registered persons;
(e) the submission of
annual financial statements and auditors’ reports to the Commission and
the time limits in which they should be submitted;
(f) the powers and
duties of auditors including their right of access to the accounting and other
records of registered persons;
(g) the form and content of
financial statements.
(3) An
Order made under paragraph (1) may make a contravention of any of its
provisions an offence for which a person is liable to imprisonment for a term
not exceeding two years or a fine, or both.
ARTICLE 16
Communication by
auditors, accountants and others with the Commission
(1) No
duty to which –
(a) an auditor, whether
appointed by virtue of an Order made pursuant to Article 15 or not, of a
registered person; or
(b) a person appointed to
make a report under paragraph (5) of Article 7 or paragraph (4) of Article 29,
may be subject
shall be regarded as contravened by reason of his communicating in good faith
to the Commission, whether or not in response to a request made by it, any
information or opinion on a matter to which this Article applies and which is
relevant to any function of the Commission under this Law.
(2) In
relation to an auditor of a registered person, this Article applies to any
matter of which he becomes aware in his capacity as auditor and which relates
to the business or affairs of the registered person or of any company which is
a holding company or subsidiary in relation to it.
(3) In
relation to a person to whom sub-paragraph (b) of paragraph (1) applies, this
Article relates to any matter of which he becomes aware in his capacity as the
person making the report and which relates to the business or affairs of the
registered person, or of any principal person in relation to whom his report is
made.
(4) The
Committee may, on the recommendation of the Commission and after consultation
with such bodies as appear to the Commission to represent the interests of
persons described in sub-paragraph (a) or (b) of paragraph (1) and registered
persons, make Orders specifying circumstances in which matters to which this
Article applies are to be communicated to the Commission, and it shall be the
duty of those persons to whom the Orders apply to communicate a matter to the
Commission in the circumstances specified in the Orders.
(5) A
person to whom an Order made under paragraph (4) applies who fails to comply
with that Order is guilty of an offence and liable to imprisonment for a term
not exceeding six months or a fine, or both.
(6) Orders
under this Article may make different provision for different cases.
(7) Paragraphs
(1) to (6) shall apply to a person who was an auditor of a registered person or
formerly registered person at any time during the period of his registration,
as they apply to a person who is currently an auditor of a registered person.
Powers, controls,
misleading statements, etc.
ARTICLE 17
Codes of Practice
(1) The
Commission may, after consultation with such persons or bodies as appear to be
representative of the interests concerned –
(a) prepare and issue Codes
of Practice for the purpose of establishing sound principles for the conduct of
investment business;
(b) revise any such Code of
Practice by revoking, varying, amending or adding to its provisions; and
(c) indicate in any such
Code of Practice if and to what extent it is or is not to apply to any class of
investment business or particular investment business.
(2) The
Commission shall cause any Code of Practice issued under this Article to be
printed and distributed, and may make such arrangements as it thinks fit for
such distribution, including causing copies of the Code of Practice to be put
on sale to the public at such price as the Commission considers to be
reasonable.
(3) Failure
to follow a Code of Practice issued under this Article shall not of itself
render any person liable to proceedings of any kind, or invalidate any
transaction.
(4) Subject
to paragraph (6) of Article 9, in any proceedings under this Law or otherwise,
any Code of Practice issued under this Article shall be admissible in evidence
if it appears to the court conducting the proceedings to be relevant to any
question arising in the proceedings, and shall be taken into account in
determining any such question.
(5) A
copy, certified in writing on behalf of the Commission to be an accurate copy
–
(a) of a Code; or
(b) of any part of such a
Code,
shall be
admissible in evidence in all legal proceedings as of equal validity with the
original and as evidence of any fact stated in it of which direct oral evidence
would be admissible.
(6) Where
a document purports on its face to be a copy of a Code or part of a Code,
certified in accordance with paragraph (5), it shall be unnecessary for the
purposes of paragraph (5) to prove the official position or handwriting of the
person signing on behalf of the Commission.
ARTICLE 18
Client assets
(1) Where
a registered person has control of or is otherwise responsible for client
assets which he is required to safeguard, he shall arrange proper protection
for them by way of segregation and identification of the assets or otherwise in
accordance with the responsibilities he has accepted.
(2) Without
prejudice to the generality of paragraph (1), the Committee may, on the
recommendation of the Commission, prescribe the manner in which any classes of
client assets are to be protected.
(3) Orders
made under paragraph (2) may provide that certain client assets are held by a
registered person on trust.
(4) A
person who fails to comply with an Order made under paragraph (2) is guilty of
an offence and liable to imprisonment for a term not exceeding six months or a
fine, or both.
ARTICLE 19
Contracts made by
or through unregistered persons
(1) This
Article applies to any contract entered into by a person (referred to in this
Article as “the provider”) in the course of carrying on investment
business which is in contravention of paragraph (1) of Article 6.
(2) Subject
to paragraph (4), a contract to which this Article applies shall be
unenforceable by the provider against other parties to it; and such other parties
shall be entitled to recover any money or other property paid or transferred by
them under the contract, together with compensation for any loss sustained by
them as a result of having parted with it.
(3) The
compensation recoverable under paragraph (2) shall be such as the parties may
agree or as the Court may, on the application of either party, determine.
(4) The
Court may make an order allowing a contract to which this Article applies to be
enforced or money or property paid or transferred under it to be retained if it
is satisfied that it is just and equitable to do so, having particular regard
to whether the provider was, reasonably, unaware of the contravention.
(5) Subject
to any order made by the Court under paragraph (4), where a party elects not to
perform a contract which is unenforceable against him by virtue of paragraph
(2), and by virtue of that paragraph recovers the money paid or other property
transferred by him under the contract together with any compensation due under
paragraph (2), he shall repay any money and return any other property
previously received by him under the contract.
(6) Where
any property transferred under a contract to which this Article applies has
passed to a third party the references to that property in paragraphs (2), (4)
and (5) shall be construed as references to its value at the time of its
transfer under the contract.
(7) A
contravention of a type referred to in paragraph (1) shall not make a contract
illegal or invalid otherwise than as is provided in this Article.
ARTICLE 20
Power to issue
directions
(1) If
it appears to the Commission in relation to investment business that –
(a) any requirements in
relation to the registration of a registered person are no longer satisfied;
(b) it is in the best
interests of persons who may transact investment business with the registered
person or of the creditors of a registered person;
(c) it is desirable in
order to protect the reputation and integrity of the Island in financial and
commercial matters;
(d) it is in the best
economic interests of the Island; or
(e) any investment
advertisement issued or proposed to be issued by or on behalf of any person is
misleading or undesirable,
the Commission
may, whenever it deems it necessary, give, by notice in writing, such directions
as it may deem appropriate in the circumstances; and any person to whom the
notice is given shall obey, comply with and otherwise give effect to any such
direction within the time and in the manner stated in the direction.
(2) Without
prejudice to the generality of paragraph (1), a direction under this Article
may –
(a) require anything to be
done or be omitted to be done, or impose any prohibition, restriction or
limitation, or any other requirement, and confer powers, with respect to any
transaction or other act, or to any assets, or to any other thing whatsoever;
(b) require that any
principal person or person having functions in relation to the registered
person be removed or removed and replaced by another person acceptable to the
Commission;
(c) require a registered
person or formerly registered person to cease operations and to wind up its
affairs, in accordance with such procedures and directions as may be specified
in the direction, which may provide for the appointment of a person to take
possession and control of all documents, records, assets and property belonging
to or in the possession or control of the registered person or formerly
registered person;
(d) prohibit the issue,
re-issue or continuance of a particular investment advertisement or of
investment advertisements of any description; or
(e) require that any
particular investment advertisement or investment advertisement of any
description be modified in a specified manner.
(3) The
power to give directions under this Article shall include the power to vary or
withdraw any direction, as well as the power to issue further directions.
(4) Where
the Commission is satisfied that the circumstances so warrant, it may at any
time make public any directions it has given under any of the provisions of
this Article.
(5) Any
person to whom a direction is given under paragraph (1) may apply to the
Commission to have it withdrawn or varied and the Commission shall withdraw or
vary the direction in whole or in part if it considers that there are no longer
any grounds under any of sub-paragraphs (a) to (e) of paragraph (1) which
justify the direction or part of the direction concerned.
(6) Any
person aggrieved by a direction given to him under paragraph (1), or a refusal
to withdraw or vary a direction pursuant to paragraph (5), may appeal to the
Court, either in term or in vacation, within one month from the date on which
the direction was given or refusal was made on the ground that the decision of
the Commission was unreasonable having regard to all the circumstances of the
case.
(7) Other
than with respect to a direction to wind up a person’s affairs, an appeal
made under paragraph (6) shall not suspend the operation of any direction in
connection with which the appeal is made.
(8) On
an appeal under paragraph (6) the Court may make such order as it thinks fit
with respect to the whole or any part of the direction concerned.
(9) Any
person who contravenes or fails to comply with any of the provisions of a
direction given under this Article shall be guilty of an offence and liable to
a term of imprisonment for a term not exceeding two years or a fine, or both.
(10) The
record of the conviction of any person for an offence under paragraph (9) shall
be admissible in any civil proceedings as evidence of the facts constituting
the offence.
ARTICLE 21
Injunctions and
remedial orders
(1) Where,
on the application of the Commission, the Court is satisfied that it is likely
that a person will contravene (or continue or repeat a contravention of)
–
(a) paragraph (1) of
Article 6;
(b) any condition
prescribed or attached under Article 9 or imposed under paragraph (2) of
Article 40;
(c) any provision of
Articles 25, 27 or 28;
(d) any direction given
under Article 20; or
(e) any Regulation or Order
made under this Law,
the Court may if
it thinks fit issue an injunction restraining that person from committing (or,
as the case may be, continuing or repeating) the contravention.
(2) Where,
on the application of the Commission, the Court is satisfied that any person
has committed a contravention of a type referred to in any of sub-paragraphs
(a) to (e) of paragraph (1), and that there are steps which could be taken to
remedy the contravention, the Court may make an order requiring that person, or
any other person who appears to the Court to have been knowingly concerned, to
take such steps as the Court may direct to remedy the contravention.
ARTICLE 22
Public statements
(1) The
Commission may issue a public statement concerning a person if that person
appears to the Commission to have committed a contravention of the type
referred to in sub-paragraphs (a) to (e) of paragraph (1) of Article 21 or has
failed to comply with a Code of Practice under Article 17.
(2) The
Commission may issue a public statement concerning a person who it believes to
be carrying on investment business, whether in the Island or elsewhere, if it
appears to the Commission to be desirable to do so in the interests of
investors or potential investors.
(3) Where
a public statement, issued under this Article, concerns a registered person, a
formerly registered person or a principal person in relation thereto the
Commission shall, at least seven days prior to the publication of the
statement, give written notice to the person concerned of the proposed
statement and of the reasons for which it intends to act.
ARTICLE 23
Powers of
intervention
(1) Where,
on the application of the Commission, the Court is satisfied in relation to a
registered person that –
(a) he is not, in terms of
sub-paragraph (a) of paragraph (3) of Article 8, a fit and proper person to
carry on investment business which he is purporting to carry on, or is not fit
to carry it on to the extent which he is purporting to do; or
(b) he has committed or is
likely to commit a contravention of a type referred to in any of sub-paragraphs
(a) to (e) of paragraph (1) of Article 21; and
(c) it is desirable for the
protection of persons transacting investment business with him,
the Court may, as
it thinks just, make an order making his business subject to such supervision,
restraint or conditions, from such time, and for such periods, as the Court may
specify, and may also make such ancillary orders as the Court thinks desirable.
(2) If,
on an application made under paragraph (1), the Court is satisfied that a
person has entered into any transaction in contravention of any of the
provisions of Article 6 or 27, the Court may order that person and any other
person who appears to the Court to have been knowingly concerned in the
contravention to take such steps as the Court may direct for restoring the
parties to the position in which they were before the transaction was entered
into.
(3) Without
prejudice to the generality of paragraph (1) or to paragraph (2), an order
issued under either of those paragraphs may include a requirement that all
assets, or all assets of a specified description which, at any time while the
requirement is in force –
(a) belong to the
registered person concerned; or
(b) belong to persons
transacting investment business with him and are held by or to his order,
shall be
transferred to and held by a person whose appointment is approved by the Court
(in this Article referred to as an “appointed person”).
(4) Where
a requirement of a type referred to in paragraph (3) is imposed under this
Article, it shall be the duty of the registered person concerned to transfer
the assets to the appointed person and to give him all such other assistance as
may be required to enable him to discharge his functions in accordance with the
requirement.
(5) Assets
held by an appointed person in accordance with a requirement of a type referred
to in paragraph (3) shall not be released or dealt with except in accordance
with directions given by the Court or in such circumstances as may be specified
by it.
(6) An
order including a requirement of a type referred to in paragraph (3) may relate
to assets outside the Island.
(7) The
provisions of this Article shall be without prejudice to any right of any
aggrieved person to bring proceedings directly in respect of any right such
person may otherwise have independently of the Commission.
ARTICLE 24
Compensation
schemes
The States may by
Regulations establish in relation to any investment business, or to classes of
such business, schemes for compensation in cases where registered persons or
formerly registered persons are unable, or are likely to be unable, to satisfy
claims in respect of any description of civil liability incurred by them in
connection with such business, and the provisions of such schemes may be
different for different classes of person or for different classes of such
business.
ARTICLE 25
False information
and failure to supply information
(1) Any
person who knowingly or recklessly provides the Commission or any other person
entitled to information under this Law with information which 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 any Regulation or Order made
thereunder;
(b) otherwise than as
mentioned in sub-paragraph (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 exercising
its functions under this Law.
(2) Any
person who knowingly or recklessly provides the Commission or any other person
with information which 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 registration under this Law.
(3) A
registered person or formerly registered person shall be guilty of an offence
if he fails to provide the Commission with any information in his possession,
knowing or having reasonable cause to believe that or being reckless as to
whether –
(a) the information is
relevant to the exercise by the Commission of its functions under this Law in
relation to the registered person or formerly registered person; and
(b) the withholding of the
information is likely to result in the Commission being misled as to any matter
which is relevant to and of material significance for the exercise of those
functions in relation to the registered person or formerly registered person.
(4) Any
person who knowingly or recklessly provides any person appointed under Article
30 with information which is false or misleading in a material particular shall
be guilty of an offence.
(5) A
person guilty of an offence under paragraph (1), (2) or (4) shall be liable to
imprisonment for a term not exceeding five years or a fine, or both.
(6) A
person guilty of an offence under paragraph (3) shall be liable to imprisonment
for a term not exceeding two years or a fine, or both.
ARTICLE 26
Regulations
regarding recission of agreements and withdrawal of offers
The States may by
Regulations make provision for enabling a person who has entered, or offered to
enter, into an agreement relating to investment business with a registered
person to rescind the agreement or withdraw the offer within such period and in
such manner as may be provided for in the Regulations, and, in particular, but
without prejudice to the generality of the foregoing, may make provision
–
(a) for requiring the
service of notice with respect to the rights exercisable under the Regulations;
(b) for the restitution of
property and the making or recovery of payments where those rights are
exercised;
(c) for such other matters
as are incidental to or connected with any of the above.
ARTICLE 27
Misleading statements
and practices
(1) Any
person who –
(a) makes a statement,
promise or forecast which he knows to be misleading, false or deceptive, or
dishonestly conceals any material facts; or
(b) recklessly makes
(dishonestly or otherwise) a statement, promise or forecast which is
misleading, false or deceptive,
is guilty of an
offence if he makes the statement, promise or forecast or conceals the facts
for the purpose of inducing, or is reckless as to whether it may induce,
another person (whether or not the person to whom the statement, promise or
forecast is made or from whom the facts are concealed) –
(i) to enter or offer
to enter into, or refrain from entering or offering to enter into, an agreement
or arrangement the making of which or performing of which constitutes
investment business or would do so but for the Second Schedule; or
(ii) to exercise, or refrain
from exercising, any rights conferred by an investment.
(2) Any
person who does any act or engages in any course of conduct which creates a
false or misleading impression as to the market in or the price or value of any
investment is guilty of an offence if he does so for the purpose of creating
that impression and of thereby inducing another person to acquire, dispose of,
subscribe for or underwrite that investment or to refrain from doing so or to
exercise, or refrain from exercising, any rights conferred by those
investments.
(3) In
proceedings brought against any person for an offence under paragraph (2) it
shall be a defence for him to prove that he reasonably believed that his act or
conduct would not create an impression that was false or misleading as to the
matters mentioned in that paragraph.
(4) A
person guilty of an offence under this Article shall be liable to imprisonment
for a term not exceeding ten years or a fine, or both.
ARTICLE 28
Control of
advertising
(1) The
Committee may, on the recommendation of the Commission, make Orders relating to
the issue, form and content of investment advertisements.
(2) Orders
made under this Article may make different provision for different cases and,
without prejudice to the generality of paragraph (1), may in particular –
(a) prohibit the issue of
investment advertisements of any description (whether by reference to the
matters set out in paragraph (b), to the persons by whom they are issued or
otherwise);
(b) make provision
regarding the presentation, content, accuracy, effect and implications of
investment advertisements, and ancillary matters, and may include provision
regarding matters which must be, as well as matters which may not be, included
in investment advertisements;
(c) provide for exemptions
from any prohibition or requirement imposed by the Orders, including exemptions
by reference to a person’s membership of a class whose membership is determined
otherwise than by the Committee or the Commission.
(3) Any
registered person who issues or causes to be issued in the Island or elsewhere
and, subject to paragraph (4), any other person who issues or causes to be
issued in the Island, an investment advertisement –
(a) the issue of which is
prohibited by an Order made under this Article;
(b) which does not comply
fully with, or contravenes in any material respect, any requirement imposed by
such an Order; or
(c) in circumstances which
do not comply in any respect with any requirement imposed by such an Order,
shall be guilty
of an offence and liable to imprisonment for a term not exceeding two years or
a fine, or both.
(4) A
person whose business it is to publish or arrange for publication of advertisements
shall not be guilty of an offence under this Article if he proves that he
received the investment advertisement in question for publication in the
ordinary course of his business, that the matters contained in the investment
advertisement were not, wholly or in part, devised or selected by him or by any
person under his direction or control and that he did not know and had no
reason for believing that publication of the investment advertisement would
constitute an offence.
(5) For
the purposes of this Article –
(a) an investment
advertisement issued or caused to be issued by any person by way of display or
exhibition in a public place shall be treated as issued or caused to be issued
by him on every day on which he causes or permits it to be displayed or
exhibited;
(b) where an investment
advertisement invites the transaction of investment business with a person
specified in the advertisement, its issue shall be presumed, unless the
contrary is proved, to have been caused by that person.
(6) For
the purposes of this Article an investment advertisement issued outside the
Island shall be treated as issued in the Island if it is directed to persons in
the Island or is made available to them otherwise than in a newspaper, journal,
magazine or other publication published and circulating principally outside the
Island or in a sound or television broadcast transmitted principally for
reception outside the Island.
Information and
investigations
ARTICLE 29
General power to
require provision of information and documents
(1) The
Commission may by notice in writing served on a registered person, formerly
registered person, or a person who is or was a principal person in relation to
him, or any associate of such a principal person, require the person on whom
the notice is served –
(a) to provide to it at
such time and place as may be specified in the notice, information and
documents of a specified description;
(b) to attend at such place
and time as may be specified in the notice and answer questions which the Commission
or any duly authorized officer or agent of the Commission reasonably requires
him to answer;
being
information, documents or questions relating to –
(i) the investment
business of the registered person or formerly registered person concerned;
(ii) the integrity,
competence, financial standing or organisation of that person, of any person
who is or was a principal person in relation to him, and of any associate of
such a principal person; or
(iii) the compliance by those
persons with this Law and any Regulation, Order or Code of Practice made, or a
condition of any grant of registration, or a direction given under this Law,
which the
Commission reasonably requires or requires him to answer for the performance of
its functions under this Law.
(2) Where
the Commission has reasonable grounds for suspecting that a person is guilty of
contravening paragraph (1) of Article 6 (prohibition of unregistered investment
business) or Article 27 (misleading statements and practices), the Commission
or any duly authorised officer or agent of the Commission may, by notice in
writing served on that person or on any other person appearing to be in
possession of the information or documents described in this paragraph, require
him to do any of the following –
(a) to provide to it
forthwith or at such time and place as may be specified, information or
documents specified in the notice being information or documents which the
Commission reasonably requires for the purpose of investigating the suspected
contravention;
(b) to attend at such place
and time as may be specified in the notice and answer questions which the
Commission or any duly authorised officer or agent of the Commission reasonably
requires him to answer for the purpose of investigating the suspected contravention.
(3) Any
officer or agent of the Commission may, on producing if required evidence of
his authority, enter, at a reasonable time, any premises occupied by a person
on whom a notice has been served under paragraphs (1) or (2) or any other
premises where information or documents are kept by such person for the purpose
of obtaining there the information or documents required by that notice,
putting the questions referred to in sub-paragraph (b) of paragraph (1) or
sub-paragraph (b) of paragraph (2) or of exercising the powers conferred by
paragraph (6), as the case may be.
(4) A
notice under paragraph (1) may require the person concerned to provide to the
Commission a report, by an accountant or other person with relevant
professional skill nominated or approved by the Commission, on, or on any
aspect of, any of the matters mentioned in paragraph (1); and the notice may
require such a report to be in such form as it may specify.
(5) Where
any person who is required to provide documents under paragraph (2) claims a
lien on any such document, the provision shall be without prejudice to the
lien.
(6) The
power under this Article to require documents to be provided includes power
–
(a) if the documents are
provided, to retain or take copies of them or extracts from them and to require
the person providing them, or any person who appears to be in possession of
relevant information, is or has been an officer, shareholder controller or
auditor or employee of the registered person or formerly registered person in question,
as appropriate, to provide an explanation of them; and
(b) if the documents are
not provided, to require the person to whom the requirement was directed to
state, to the best of his knowledge and belief, where they are.
(7) Any
documents retained under sub-paragraph (a) of paragraph (6) may be retained
–
(a) for a period of one
year; or
(b) if within that period
proceedings to which the documents are relevant are commenced against any
person, until the conclusion of those proceedings.
(8) A
person who requires any documents retained under sub-paragraph (a) of paragraph
(6) for the purpose of his business and who requests such documents shall be
supplied with copies as soon as practicable.
(9) Any
person who without reasonable excuse fails to comply with a requirement imposed
on him under this Article or obstructs a person exercising powers conferred by
paragraph (3) shall be guilty of an offence and liable to imprisonment for a
term not exceeding six months or a fine, or both.
(10) Nothing
in this Article shall require the disclosure or production by a person to the
Commission or to a person authorised by it of information or documents which he
would in an action in the Court be entitled to refuse to disclose or produce on
the grounds of legal professional privilege in proceedings in the Court except,
if he is a lawyer, the name and address of his client.
(11) A
statement made by a person in compliance with a requirement imposed by virtue
of this Article may not be used by the prosecution in evidence against him in
any criminal proceedings except proceedings under paragraph (9) or Article 25.
ARTICLE 30
Investigations on
behalf of the Commission
(1) If
it appears to the Commission desirable to do so in the interests of a person
with or in relation to whom a registered person has transacted or could
transact investment business the Commission may appoint one or more competent
persons to investigate and report to the Commission on –
(a) the nature, conduct or
state of such registered person’s investment business or any particular
aspect of it;
(b) his integrity,
competence, financial standing or organisation;
(c) the integrity,
competence and financial standing, so far as relevant in the opinion of the
Commission, of persons who are principal persons in relation to him, and of
associates of such principal persons; or
(d) the compliance by those
persons with this Law and any Regulation, Order or Code of Practice made, or a
condition of any grant of registration, or a direction given under this Law.
(2) The
Commission shall give written notice of any such appointment to the registered
person concerned.
(3) It
shall be the duty of every person who is or was at any material time a
registered person under investigation under paragraph (1), a principal person
in relation to, or officer, employee, banker, auditor or, subject to paragraph
(8), legal adviser of such a registered person, and of any person appointed to
make a report in respect of the registered person under paragraph (4) of
Article 29 and of any other person who appears to be in possession of relevant
information –
(a) to provide to the
persons appointed under paragraph (1), within such time and at such place as
they may require, all documents relating to the registered person or formerly
registered person which are in his custody or power;
(b) to attend before them
at such time and place as they may require and to answer questions which they
reasonably require him to answer for the purposes of the investigation; and
(c) otherwise to give them
all assistance in connection with the investigation which he is reasonably able
to give,
and the persons
appointed under paragraph (1) may retain or take copies of or extracts from any
documents provided to them under sub-paragraph (a).
(4) This
Article shall apply in respect of a formerly registered person as it applies to
a registered person and to any person who appears to the Commission to be
acting or to have acted in contravention of the provisions of paragraph (1) of
Article 6 (prohibition of unregistered investment business) or Article 27
(misleading statements and practices) and references in this Article to a
“registered person” shall be construed accordingly.
(5) For
the purpose of exercising his power under this Article a person appointed under
paragraph (1) may enter any premises occupied by a registered person or
formerly registered person or a person who is or was a principal person in
relation to him or any associate of such a principal person being investigated
by him under this Article or any other premises where information is kept by
such a person; but he shall not do so without prior notice in writing unless he
has reasonable cause to believe that if such notice were given any documents
whose provision might be required under this Article would be removed, tampered
with or destroyed.
(6) A
person exercising powers by virtue of an appointment under this Article shall,
if so required, produce evidence of his authority.
(7) Any
person who –
(a) without reasonable
excuse fails to provide any document which it is his duty to provide under
paragraph (3);
(b) without reasonable
excuse fails to assist or attend before a person appointed under paragraph (1)
when required to do so;
(c) without reasonable
excuse fails to answer any question which is put to him by a person so
appointed with respect to a person under investigation; or
(d) obstructs a person in
the exercise of the powers conferred by paragraph (5),
shall be guilty
of an offence and liable to imprisonment for a term not exceeding six months or
a fine, or both.
(8) Nothing
in this Article shall require the disclosure or production by a person of
information or documents which he would in any action in the Court be entitled
to refuse to disclose or produce on the grounds of legal professional privilege
in proceedings in the Court except, if he is a lawyer, the name and address of
his client.
(9) Where
any person by whom documents are required to be provided under paragraph (3)
claims a lien on any such document, the provision shall be without prejudice to
the lien.
(10) A
person who is convicted on a prosecution instituted following an investigation
under this Article may in the same proceedings be ordered to pay the expenses
of the investigation to such extent as may be specified by the Court.
(11) For
the purposes of paragraph (10) the expenses of the investigation shall include
such sums as the Commission may determine in respect of the cost of staff and
overheads.
(12) A
statement made by a person in compliance with a requirement imposed by virtue
of this Article may not be used by the prosecution in evidence against him in
any criminal proceedings except proceedings under paragraph (7) or Article 25.
ARTICLE 31
Entry and search
of premises
(1) If
the Bailiff is satisfied by information on oath that there is reasonable cause
to suspect that –
(a) there has been a
contravention of a type referred to in paragraph (2) of Article 29 and that
either –
(i) a specified
person has failed in any respect to comply with a notice served on him under
that paragraph;
(ii) there are reasonable
grounds for suspecting the completeness of any information or documents
provided by him in response to such a notice; or
(iii) if such a notice were served
on a specified person on whom it might be served under that paragraph, it would
not be complied with; or documents to which such a notice might relate would be
likely to be removed, tampered with or destroyed; or
(b) (i) if a notice were
served under paragraph (8) of Article 12 or paragraph (1) of Article 29, it
would not be complied with;
(ii) documents to which a
notice might relate would be likely to be removed, tampered with or destroyed;
(iii) a specified person has failed
in any respect to comply with a notice served on him under paragraph (8) of
Article 12 or paragraph (1) of Article 29;
(iv) a specified person has not
provided complete information or documents in response to a notice served on
him under those paragraphs;
(v) a notice served under
paragraph (1) or (2) of Article 11, paragraph (2) of Article 14 or paragraph
(1) of Article 20 has not been complied with in any respect; or
(vi) any officer or agent of the
Commission or person appointed under paragraph (1) of Article 30 has been or
may be obstructed in exercising a power of entry under paragraph (3) of Article
29, or paragraph (5) of Article 30, as the case may be,
he may grant a
warrant under this paragraph.
(2) A
warrant under paragraph (1) may authorise any police officer, together with any
other person named in the warrant –
(a) to enter any premises
specified in the warrant, using such force as is reasonably necessary for the
purpose;
(b) to search the premises
and obtain information or take possession of any documents appearing to be
information or documents of a type referred to in any of the Articles referred
to in paragraph (1) or information in relation to matters referred to therein
or which otherwise appear to be relevant to the investigation of an offence
under this Law, or to take, in relation to any such information or documents,
any other steps which may appear to be necessary to preserve them or prevent
interference with them;
(c) to take copies of or
extracts from such documents and to require the person who had possession of
them, or any person who appears to be in possession of relevant information, is
or has been an officer, shareholder controller or auditor or employee of the
registered person, or formerly registered person, or other person concerned, as
the case may be, to provide an explanation of them;
(d) to require any person
named in the warrant to answer questions relevant for determining any matter
arising in connection with this Law; and
(e) if the information or
documents are not provided, to require any person appearing to be in possession
of relevant information, to state, to the best of his knowledge and belief,
where they are and how they may be retrieved.
(3) A
warrant under paragraph (1) shall continue in force until the end of the period
of one month beginning with the date on which it was issued.
(4) Any
documents of which possession is taken under paragraph (2) may be retained
–
(a) for a period of one
year; or
(b) if within that period
proceedings to which the documents are relevant are commenced against any
person, until the conclusion of those proceedings.
(5) A
person who requires any documents of which possession is taken under paragraph
(2) for the purpose of his business and who requests such documents shall be
supplied with copies as soon as practicable.
(6) Any
person who obstructs the exercise of any power conferred by a warrant issued
under this Article or fails to comply with a requirement imposed on him by
virtue of sub-paragraphs (c) to (e) of paragraph (2) shall be guilty of an
offence and liable to imprisonment for a term not exceeding two years or a fine,
or both.
(7) Where
any person from whose premises documents are taken under paragraph (2) claims a
lien on any such documents, the possession of such documents by the officer or
person concerned and by anyone to whom he passes them shall be without prejudice
to the lien.
(8) Nothing
in this Article shall require the disclosure or production by a person of
information or documents which he would in an action in the Court be entitled
to refuse to disclose or produce on the grounds of legal professional privilege
in proceedings in the Court except, if he is a lawyer, the name and address of
his client.
(9) A
statement made by a person in compliance with a requirement imposed by virtue
of this Article may not be used by the prosecution in evidence against him in
any criminal proceedings except proceedings under paragraph (6) or Article 25.
ARTICLE 32
Obstruction of
investigations
(1) A
person who knows or suspects that an investigation is being or is likely to be
carried out under Article 30 or that information or documents are being or are
likely to be required under Articles 12 or 29 shall be guilty of an offence if
he falsifies, conceals, destroys or otherwise disposes of, or causes or permits
the falsification, concealment, destruction of or disposal of, information or
documents which he knows or suspects are or would be relevant to such an
investigation or are or would be required unless he proves that he had no
intention of concealing facts disclosed by the information or documents from
persons carrying out such an investigation or requiring such information or
documents.
(2) A
person guilty of an offence under this Article shall be liable to imprisonment
for a term not exceeding two years or a fine, or both.
ARTICLE 33
Co-operation with
relevant supervisory authority
(1) The
Commission may exercise the following powers at the request of or for the
purposes of assisting a relevant supervisory authority –
(a) the power to impose,
revoke or vary conditions pursuant to paragraph (2) of Article 9;
(b) the power to refuse or
revoke a registration under paragraph (1) of Article 10;
(c) the powers of
intervention under Article 23;
(d) the powers relating to
information and documents under Article 29;
(e) the powers of
investigation under Article 30;
(f) the powers of entry
under Article 31;
(g) the power to
communicate to the relevant supervisory authority information which is in the
possession of the Commission, whether or not as a result of the exercise of any
of the above powers, other than information relating to the identity of persons
who have transacted investment business with a registered or formerly
registered person unless the persons concerned have consented to such
disclosure.
(2) The
Commission shall not exercise powers by virtue of this Article unless it is
satisfied that the assistance is requested by the relevant supervisory
authority only for the purposes of the exercise of one or more of its
supervisory functions.
(3) In
deciding whether to exercise its powers by virtue of this Article, the
Commission may take into account, in particular –
(a) whether corresponding
assistance would be given in that country or territory to the Commission;
(b) whether the case
concerns the possible breach of a law, or other requirement, which has no close
parallel in the Island or involves the assertion of a jurisdiction not
recognised by the Island;
(c) the seriousness of the
case and its importance in the Island and whether the assistance could be
obtained by other means;
(d) whether it is otherwise
appropriate in the public interest to give the assistance sought.
(4) The
Commission may decline to exercise powers under this Article unless the
relevant supervisory authority undertakes to make such contribution towards the
costs of its exercise as the Commission considers appropriate.
(5) No
information shall be disclosed to a relevant supervisory authority or to any
other person under this Article unless the Commission is satisfied that any
conditions imposed under paragraph (2) of Article 35 will be complied with.
Restrictions on
disclosure of information
ARTICLE 34
Restricted
information
(1) Subject
to paragraph (2) and to Article 35, a person who receives information relating
to the business or other affairs of any person –
(a) under or for the
purposes of this Law; or
(b) directly or indirectly
from a person who has so received it,
shall be guilty
of an offence and liable to imprisonment for a term not exceeding two years or
a fine, or both, if he discloses the information without the consent of the
person to whom it relates and (where sub-paragraph (b) applies) the person from
whom it was received.
(2) This
Article does not apply to information which at the time of the disclosure is or
has already been made available to the public from other sources, or to
information in the form of a summary or collection of information so framed as
not to enable information relating to any particular person to be ascertained
from it.
ARTICLE 35
Permitted
disclosures
(1) Article
34 does not preclude the disclosure of information –
(a) by the Commission or
any person acting on its behalf, to the Viscount;
(b) for the purpose of
enabling or assisting the Commission or any person acting on its behalf to
discharge their functions under this Law, or any other enactment under which
they exercise a supervisory function;
(c) by the Commission or
any person acting on its behalf to a relevant supervisory authority pursuant to
Article 33;
(d) to a person showing
whether or not any person is registered under this Law;
(e) with a view to the
investigation of a suspected offence, or institution of, or for the purposes
of, any criminal proceedings, whether under this Law or not;
(f) in connection
with any other proceedings arising out of this Law;
(g) with a view to the
institution of, or otherwise for the purposes of, any disciplinary proceedings
relating to the exercise of his professional duties by an auditor of a
registered person or formerly registered person or an accountant or other
person nominated or approved for the purposes of paragraph (5) of Article 7 or
of paragraph (4) of Article 29 or appointed under Article 30;
(h) by the Commission or
any person acting on its behalf to the Attorney General or to a police officer
being information obtained under any of Articles 29 to 31 or being information
in the possession of the Commission as to any matter in relation to which the
powers conferred by those Articles are exercisable, but any information so
disclosed may only be disclosed by the Attorney General or a police officer for
the purposes of an investigation into a suspected offence or a prosecution in
the Island or, at the discretion of the Attorney General, elsewhere;
(i) subject to
sub-paragraph (g) of paragraph (1) of Article 33, to any person or body
responsible for a scheme for compensating investors (whether in the Island or
elsewhere) if it appears to the Commission that disclosing the information
would enable or assist the recipient of the information or the Commission to
discharge its functions but any such disclosure by the Commission may only be
made if the recipient of the information has given to the Commission a written
undertaking that the information will not be further disclosed without the
prior consent of the Commission;
(j) without prejudice
to the generality of sub-paragraph (b), by the Commission –
(i) to the auditor of
a registered person or formerly registered person if it appears to the
Commission that disclosing the information would enable or assist the
Commission to discharge the functions mentioned in sub-paragraph (b) or would
otherwise be in the interests of persons who have transacted or may transact
investment business with a registered person;
(ii) if, in order to enable
or assist the Commission properly to discharge any of its functions under this
Law, the Commission considers it necessary to seek advice from any qualified
person on any matter requiring the exercise of professional skill and the
disclosure appears to the Commission to be necessary to ensure that the
qualified person concerned is properly informed with respect to the matters on
which his advice is sought;
(k) by the Commission or
any person acting on its behalf to an inspector appointed under Article 30,
under Article 15 of the Company Securities (Insider Dealing) (Jersey) Law 1988,
under Article 128 of the Companies (Jersey) Law 1991 or under any other
enactment under which they exercise a supervisory function.
(2) No
information shall be disclosed under sub-paragraph (c) or (i) of paragraph (1),
or sub-paragraph (g) of paragraph (1) of Article 33 unless the Commission or
any person acting on its behalf is satisfied that the authority, person or body
concerned complies with or will comply with any conditions to which the
Commission or person acting on its behalf may, in their discretion, subject
such disclosure.
ARTICLE 36
Information
supplied to Commission by relevant overseas authority
Articles 34 and
35 apply also to information supplied to the Commission for the purposes of its
functions under this Law by a relevant supervisory authority in a country or
territory outside the Island.
PART IV
SUPPLEMENTARY
ARTICLE 37
Service of
notices
(1) No
notice required by this Law to be given to the Commission shall be regarded as
so given until it is received.
(2) Subject
to paragraph (1), any notice, other document required or authorized by or under
this Law to be given to the Commission may be given by facsimile, electronic
transmission or by any similar means which produce a document containing the
text of the communication in legible form or is capable of doing so.
(3) Any
notice, direction or other document required or authorized by or under this Law
to be given to or served on any person other than the Commission may be given
or served on the person in question –
(a) by delivering it to
him;
(b) by leaving it at his
proper address;
(c) by sending it by post
to him at that address; or
(d) by sending it to him at
that address by facsimile, electronic transmission or other similar means which
produce a document containing the text of the communication in legible form or
is capable of doing so.
(4) Any
such notice, direction or other document may –
(a) in the case of a
company incorporated in the Island, be served by being delivered to its
registered office;
(b) in the case of a
partnership, company incorporated outside the Island or unincorporated
association, be given to or served on a person who is a principal person in
relation to it, or on the secretary or other similar officer of the
partnership, company or association or any person who purports to act in any such
capacity, by whatever name called, or on the person having the control or
management of the partnership business, as the case may be, or by being served
on him or delivered to his registered or administrative office.
(5) For
the purposes of this Article and of Article 12 of the Interpretation (Jersey)
Law 1954 in its application to this
Article, the proper address of any person to or on whom a document is to be
given or served by post shall be his last known address, except that –
(a) in the case of a
company or its secretary, clerk or other similar officer or person referred to
in sub-paragraph (a) of paragraph (4), it shall be the address of the
registered or principal office of the company in the Island; and
(b) in the case of a
partnership, or a person who is a principal person in relation to a
partnership, it shall be that of its principal office in the Island.
(6) If
the person to or on whom any document referred to in paragraph (3) is to be
given or served has notified the Commission of an address within the Island
other than his proper address within the meaning of paragraph (5), as the one
at which he or someone on his behalf will accept documents of the same
description as that document, that address shall also be treated for the
purposes of this Article and Article 12 of the Interpretation (Jersey) Law 1954
as his proper address.
ARTICLE 38
Legal proceedings
(1) In
any proceedings, a certificate purporting to be signed on behalf of the
Commission and certifying any of the following –
(a) that a particular
person is or is not an applicant or registered person or was or was not an
applicant or registered person at a particular time;
(b) the date on which a
particular applicant or registered person or formerly registered person made
application or became a registered person or ceased to be a registered person,
as the case may be;
(c) the scope of a
particular person’s application or registration;
(d) that conditions set out
in the certificate were, at the relevant time, prescribed under Article 9 in
relation to registered persons, or attached under Article 9 or imposed under
paragraph (2) of Article 40 to a particular person’s registration;
shall be
admissible in evidence in all legal proceedings as evidence of any fact stated
in it of which direct oral evidence would be admissible.
(2) A
certificate purporting to be signed in accordance with paragraph (1) shall be
deemed to have been duly signed unless the contrary is shown.
(3) Where
an offence under this Law committed by a registered person or formerly
registered person is proved to have been committed with the consent or
connivance of, or to be attributable to any neglect on the part of a person who
is or was a principal person in relation to that registered person or formerly
registered person he shall be guilty of the offence and liable in the same
manner as the registered person or formerly registered person to the penalty
provided for that offence.
(4) Where
an offence under this Law committed by a partnership, company or unincorporated
association is proved to have been committed with the consent or connivance of,
or to be attributable to any neglect on the part of a person who is a partner,
director, manager, secretary or other similar officer of that partnership,
company or association or any person purporting to act in any such capacity, he
shall be guilty of the offence and liable in the same manner as the
partnership, company or association to the penalty provided for that offence.
(5) Without
prejudice to paragraphs (3) and (4), any person who knowingly and wilfully
aids, abets, counsels, causes, procures or commands the commission of an
offence under this Law shall be liable to be dealt with, tried and punished as
a principal offender.
(6) No
proceedings for an offence under this Law shall be instituted except by or with
the consent of the Attorney General.
(7) Notwithstanding
any enactment or rule of law to the contrary, proceedings for an offence under
this Law may be commenced within the period of three years from the date on
which evidence, sufficient in the opinion of the Attorney General to justify
the proceedings, comes to the knowledge of the Commission or, where the person
against whom the proceedings may be taken was outside the Island at that date,
within the period of three years from the date on which he first lands in the
Island thereafter, whichever of the said periods last expires.
(8) For
the purposes of paragraph (7), a certificate under the hand of the Chairman of
the Commission as to the date on which such evidence came to the knowledge of
the Commission shall be conclusive evidence of that fact.
ARTICLE 39
Orders
(1) The
Committee may, on the recommendation of the Commission, make Orders for the
purposes of carrying this Law into effect and in particular, without prejudice to
the generality of the foregoing power, for prescribing any matter which is to
be prescribed by any provision of this Law.
(2) An
Order made under this Law may –
(a) make different
provisions in relation to different cases or circumstances;
(b) contain such
incidental, consequential and transitional provisions as the Commission may
consider to be necessary or expedient.
(3) The
Subordinate Legislation (Jersey) Law 1960, shall apply to Orders made under
this Law.
ARTICLE 40
Transitional
provisions
(1) Subject
to paragraphs (2) to (6), a person who makes an application in compliance with
this Law under paragraph (1) of Article 7 before such day as is appointed by
the Committee, on the recommendation of the Commission, by Order for the
purposes of this paragraph may, during the period between the date of his
application and its being granted or refused by the Commission under Article 8,
carry on investment business in the same manner as he was doing at the date of
his application provided that such business is in accordance with the terms of
his application.
(2) The
Committee may, on the recommendation of the Commission prescribe, or the
Commission may impose by notice in writing, conditions which shall apply to
applicants during the period specified in paragraph (1) in addition to or in
substitution for conditions prescribed under paragraph (1) of Article 9 and may
make different provision for different applicants or for different classes of
applicants or for different classes of investment businesses and may, in such
circumstances as the Commission thinks fit, exclude applicants from carrying on
investment business.
(3) Paragraphs
(3) to (5) of Article 9 shall apply in respect of conditions imposed under
paragraph (2) as they apply in respect of conditions attached (to a
registration) under paragraph (2) of Article 9.
(4) The
provisions of this Law shall apply (with the necessary modifications) to an
applicant to whom paragraph (1) for the time being applies, as they apply to a
registered person.
(5) Without
prejudice to the generality of paragraph (4), the following modifications shall
apply in relation to applicants to whom paragraph (1) for the time being
applies –
(a) for any reference to
the period during which a person is registered there shall be substituted a
reference to the period between the date of the application and the date of its
being granted or refused by the Commission;
(b) for any reference to
the terms of a registration there shall be substituted a reference to the terms
of the application.
(6) Paragraph
(1) shall not apply to a person who, immediately before the day referred to in
that paragraph, was carrying on the business to which the application relates
in contravention of the Regulation of Undertakings and Development (Jersey) Law
1973 or the Borrowing (Control)
(Jersey) Law 1947.
ARTICLE 41
Consequential
amendments
The enactments
specified in the first column of the Third Schedule shall be amended to the
extent and in the manner set out in the second column thereof.
ARTICLE 42
Short title and
commencement
(1) This
Law may be cited as the Investment Business (Jersey) Law 1998.
(2) This
Law shall come into force on such day or days as the States may by Act appoint
and different days may be appointed for the coming into force of different
provisions or for different purposes of the same provision.
C.M. NEWCOMBE
Deputy Greffier
of the States.
FIRST SCHEDULE
(Article 2)
INVESTMENTS
Shares, etc
1. Shares
and stock in the share capital of a company.
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Note:
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For the purposes of this
paragraph “company” includes any body corporate and any
unincorporated body constituted under the law of any country or territory but
does not include a company which is a collective investment fund within the meaning of the Collective
Investment Funds (Jersey) Law 1988.
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Debentures
2. Debentures,
including debenture stock, loan stock, bonds, certificates of deposit and other
instruments of the same kind creating or acknowledging indebtedness.
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Notes: (1)
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This paragraph shall not apply to –
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(a) any instrument acknowledging
or creating indebtedness for, or for money borrowed to defray, the
consideration payable under a contract for the supply of goods or services;
(b) a cheque or other bill
of exchange, a banker’s draft or a letter of credit;
(c) a banknote, a statement
showing a balance in a current, deposit or savings account or (by reason of any
financial obligation contained in it) a lease or other disposition of property,
a hypothec, security interest, mortgage or other charge, or an insurance
policy; or
(d) any instrument creating
or acknowledging indebtedness in respect of money received by the Director of
Savings as deposits or otherwise in connection with the business of the
National Savings Bank or in respect of money raised under the National Loans
Act 1968 (1968 c.13) under the auspices of the Director of Savings or in
respect of money treated as having been so raised by virtue of section 11(3) of
the National Debt Act 1972 (1972 c.65).
(2) For the purposes of
this paragraph references to an instrument include references to any record
whether or not in the form of a document.
Instruments
entitling to shares or securities
3. Warrants
or other instruments entitling the holder to subscribe for investments falling
within paragraph 1 or 2.
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Notes: (1)
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It is immaterial whether the investments are for the time being
in existence or identifiable.
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(2) An investment falling
within this paragraph shall not be regarded as falling within paragraphs 6, 7
or 8.
Certificates
representing securities
4. Certificates
or other instruments which confer –
(a) property rights in
respect of any investment falling within paragraph 1, 2 or 3;
(b) any right to acquire,
dispose of, underwrite or convert an investment, being a right to which the
holder would be entitled if he held any such investment to which the
certificate or instrument relates; or
(c) a contractual right
(other than an option) to acquire any such investment otherwise than by
subscription.
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Note:
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This paragraph does not apply to any instrument which confers
rights in respect of two or more investments issued by different persons.
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Units in a
collective investment fund
5. Units
in a collective investment fund within the meaning of the Collective Investment
Funds (Jersey) Law 1988 or in a fund which would be a collective investment
fund but for the fact that it does not acquire capital by means of an offer to
the public of units for subscription, sale or exchange, as described in that
Law.
Options
6. Options
to acquire or dispose of –
(a) an investment falling
within any other paragraph of this Schedule;
(b) currency of the Island
or of any other country or territory;
(c) gold, palladium,
platinum or silver; or
(d) an option to acquire or
dispose of an investment falling within this paragraph by virtue of
sub-paragraph (a), (b) or (c).
Futures
7. Rights
under a contract for the sale of a commodity, or property of any other
description which is entered into for investment, not commercial purposes, and
under which delivery is to be made at a future date and at a price agreed upon
when the contract is made.
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Notes: (1)
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A contract shall be regarded as made for investment purposes if
it is made or traded on an investment exchange, or made otherwise but
expressed to be as traded on such an exchange or on the same terms as those
on which an equivalent contract would be made on such an exchange.
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(2) A contract not falling
within Note (1) shall be regarded as made for commercial purposes if under the
terms of the contract delivery is to be made within seven days.
Contracts for
differences, etc
8. Rights
under a contract for differences, or under any other contract the purpose or
pretended purpose of which is to secure a profit or avoid a loss by reference
to fluctuations in the value or price of property of any description or in an
index or other factor designated for that purpose in the contract.
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Notes: (1)
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This paragraph shall not apply to a contract where the parties
intend that the profit is to be obtained or the loss avoided by taking
delivery of any property to which the contract relates.
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(2) This paragraph shall
not apply to rights under any contract under which money is received by the
Director of Savings as deposits or otherwise in connection with the business of
the National Savings Bank or in respect of money raised under the National
Loans Act 1968 (1968 c.13) under the auspices of the Director of Savings or
under which money raised is treated as having been so raised by virtue of
section 11(3) of the National Debt Act 1972 (1972 c.65).
Long-term
insurance contracts
9. Rights
under a contract the effecting and carrying out of which constitutes long-term
business within the meaning of the Insurance Business (Jersey) Law 1996 or
would do so but for the fact that for the purposes of class VI or VII set out
in the First Schedule to that Law it is effected and carried out by a person
carrying on a banking business or by a person who does not carry on long-term
business of class I, II, III, IV or V or general business of any class.
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Notes: (1)
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Where
the provisions of a contract of insurance are such that the effecting and
carrying out of the contract –
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(a) constitutes both
long-term business within the meaning of the Insurance Business (Jersey) Law
1996 and general business within the
meaning of that Law; or
(b) by virtue of
sub-paragraph 3(2) of Part IV of the First Schedule to that Law constitutes
long-term business notwithstanding the inclusion of subsidiary general business
provisions,
references in
this paragraph to rights and benefits under the contract are references only to
such rights and benefits as are attributable to the provisions of the contract
relating to long-term business.
(2) This paragraph does not
apply to rights under a reinsurance contract.
(3) Rights falling within
this paragraph shall not be regarded as falling within paragraph 8.
Rights and
interests in investments
10. Rights
to and interests in anything which is an investment falling within any other
paragraph of this Schedule.
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Note:
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This
paragraph shall not apply to interests under the trusts of an occupational
pension scheme.
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SECOND SCHEDULE
(Article 3)
EXEMPTIONS
PART I: GENERAL
Newspapers,
broadcasting and information services
1. The
giving of investment advice in any newspaper, journal, magazine, television
broadcast, teletext service, sound broadcast or electronic information service,
or in any other periodical publication, broadcast or electronic information
service if –
(a) the principal purpose
of the periodical publication, broadcast or service, taken as a whole and
including any advertisements contained in it, is not to induce persons to buy,
sell, subscribe for or underwrite a particular investment; or
(b) the publisher,
broadcaster, service provider or producer of the periodical publication,
broadcast or service does not derive any direct benefit from any investment
business resulting from the investment advice given therein.
Executors and
administrators, tuteurs and guardians
2. The
carrying out by executors or administrators of estates of deceased persons, or
by tuteurs and guardians, curateurs, administrateurs, general and special
attornies and fideicommisaires in their capacity as such, of any of the
activities described in Article 2.
Functionaries of
collective investment funds
3. The
carrying on of the activities of a functionary of a collective investment fund
within the meaning of the Schedule to the Collective Investment Funds (Jersey)
Law 1988 under his permit granted under that Law.
PART II:
INVESTMENT BUSINESS
Dealing as
principal
4. Dealing
in investments as principal, unless –
(a) the person concerned
holds himself out as willing to enter into transactions of that kind at prices
determined by him generally, rather than being determined in respect of each
particular transaction;
(b) he holds himself out as
engaging in the business of buying investments of the type to which the
transaction concerned relates with a view to selling them; or
(c) he regularly solicits
members of the public for the purpose of inducing them to deal in investments
as principals or as agents and the transaction concerned is or is to be entered
into as a result of his having solicited members of the public in that manner.
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Notes: (1)
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For the
purposes of this paragraph –
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(a) “joint
enterprise” shall have the meaning given to it for the purposes of
paragraph 8;
(b) “members of the
public” in relation to the person soliciting them (“the relevant
person”) means any other persons except –
(i) companies with
which the relevant person is connected;
(ii) persons who are, or
propose to become, participators with the relevant person in a joint
enterprise;
(c) a company is connected
with another company if any of the requirements in Note (2) to paragraph 9 are
met in relation to them.
(2) For the purposes of
this paragraph an investment is of the same type as another if they both fall
within the same paragraph of the First Schedule.
Dealing as agent
by professionals and non-investment businesses
5. Dealing
in investments as agent if –
(a) the dealing consists of
making arrangements with a view to another person buying, selling, subscribing
for or underwriting investments;
(b) the arrangements are
made in the course of carrying on any business or profession which does not
otherwise constitute investment business;
(c) the agent does not
receive any commission or other remuneration, directly or indirectly, from his
principal which is calculated by reference to the value of the transaction
concerned or to any premiums or other sums payable with respect to those
investments; and
(d) the agent does not hold
himself out generally as providing a service of dealing in investments.
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Note:
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For the purposes of this paragraph “making
arrangements” includes –
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(i) the communication
of instructions to effect a transaction to a person dealing in investments;
(ii) the communication of
offers and acceptances in relation to transactions to a person dealing in
investments;
(iii) the execution and delivery of
documentation concerning the title to investments.
Giving advice in
the course of a non-investment business
6.-(1) Giving investment advice other than in
the course of carrying on any business which otherwise constitutes investment
business, unless the advice consists of, includes or amounts to –
(a) a recommendation to a
person to buy, sell, subscribe for or underwrite a particular investment or to
exercise or refrain from exercising rights conferred by it;
(b) advice on the
suitability of the investment concerned for the person to whom or in relation
to whom the advice is given; or
(c) advice on the
characteristics or performance of the investment concerned.
(2) Advice given in the
course of carrying on the profession of a lawyer by an advocate or practising
solicitor or of an accountant by a practising accountant in connection with an
investment identified specifically by the client and in relation to which the
client approached him for legal or accountancy advice, as the case may be.
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Note:
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For the
purposes of this paragraph –
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“practising
accountant” means a person qualified under Article 113 of the Companies
(Jersey) Law 1991 for appointment as auditor of a
company under Article 109 of that Law;
“practising
solicitor” means –
(i) a solicitor of
the Court, or
(ii) a person who is
qualified to act as a solicitor under any of section 1 of the Solicitors Act
1974 of the United Kingdom, Article 4 of the Solicitors (Northern Ireland)
Order 1976 or section 4 of the Solicitors (Scotland) Act 1980 and who is, for
the time being, practising as such from or within the Island.
Instruments
creating or acknowledging indebtedness
7. Accepting
(whether as principal or as agent) or becoming party to (otherwise than as a
debtor or surety) an instrument creating or acknowledging indebtedness in
respect of any loan, credit, guarantee or other similar financial accommodation
or assurance which he or his principal has made, granted, or provided.
Connected
companies and joint enterprises
8.-(1) Dealing in investments by a person as
principal with another person if –
(a) they are connected
companies;
(b) they participate
together in a joint enterprise and the dealing is undertaken for the purposes
of, or in connection with, that enterprise; or
(c) one of them is a
director, other officer or employee of a company acting in his capacity as
trustee and the other is that company or a connected company in relation to
that company.
(2) Dealing in investments
by a person as agent for another person if –
(a) they are connected
companies;
(b) they participate
together in a joint enterprise and the dealing is undertaken for the purposes
of, or in connection with, that enterprise; or
(c) the other person is
acting in his capacity as a trustee and is a director, other officer or
employee of the company which is the agent or of a company which is a connected
company in relation to the agent,
unless –
(i) the agent holds
himself out (other than to such companies, participants or persons); or
(ii) solicits,
in a manner
contemplated by paragraph 4(b) or 4(c).
(3) Discretionary
investment management by one person for another and investment advice given by one
person to another if –
(a) they are connected
companies;
(b) they participate
together in a joint enterprise and the activity is undertaken for the purposes
of, or in connection with, that enterprise; or
(c) the other person is
acting in his capacity as a trustee and is a director, other officer or
employee of the company which is carrying out such management or giving such
advice or of a company which is a connected company in relation to it,
unless the first
mentioned person otherwise carries on the business of discretionary investment
management or of giving investment advice or holds himself out as carrying on
either of those businesses.
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Notes: (1)
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For the purposes of this paragraph, “joint
enterprise” means an enterprise into which the persons participating
enter for commercial purposes related to a business other than investment
business carried on by such persons; and where a person participating is a
company, each company with which it is connected shall also be regarded as a
person participating in the enterprise.
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(2) For the purposes of
this paragraph a company is connected with another company if any of the
requirements in Note (2) to paragraph 9 are met in relation to them.
Employees’
share schemes
9.-(1) Dealing by a company, a company with
which it is connected or a relevant trustee for the purpose of enabling or
facilitating transactions in shares in or debentures of the first-mentioned
company for the benefit of any of the persons mentioned in sub-paragraph (2) or
the holding of such shares or debentures by or for the benefit of any such
persons.
(2) The persons referred to
in sub-paragraph (1) are –
(a) the bona fide employees
or former employees of the company first mentioned in sub-paragraph (1) above
or of another company with which it is connected; or
(b) the wives, husbands,
widows, widowers, or children or step-children under the age of twenty years of
such employees or former employees.
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Notes: (1)
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For the
purposes of this paragraph –
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“joint
enterprise” shall have the meaning given to it for the purposes of
paragraph 8;
“a relevant
trustee” means a person holding shares in or debentures of the company
first mentioned in sub-paragraph (1) above as trustee in pursuance of
arrangements made for the purpose mentioned in sub-paragraph (1) by, or by a
company connected with, that company.
“shares”
and “debentures” include any investment falling within paragraph 1
or 2 of the First Schedule and also include any investment falling within
paragraph 3 or 4 of the First Schedule so far as relating to those paragraphs
or any investment falling within paragraph 10 of the First Schedule so far as
relating to paragraph 1, 2, 3 or 4 of the First Schedule;
“trustee”
includes a duly appointed delegate of the trustee who is participating in a
joint enterprise with him.
(2) For the purposes of
this paragraph a company is connected with another company if –
(a) they are in the same
group;
(b) one is entitled, either
alone or with any other company in the same group, to exercise or control the
exercise of a majority of the voting rights, (other than as nominee
shareholder) which are attributable to the share capital and are exercisable in
all circumstances at any general meeting of the other company or of its holding
company; or
(c) the first-mentioned
company holds, or a company in the same group as the first-mentioned company
holds, an interest in the equity share capital of the other company carrying
rights to vote in all circumstances at general meetings for the purpose of
securing a contribution to the activities of the first-mentioned company or the
company in the same group as that company respectively by the exercise of
control or influence arising from that interest.
Issuing of
shares, debentures, etc.
10.-(1) The issuing by a company of its own
shares or of share warrants in respect of any shares, or by any person of his
own debentures or debenture warrants.
(2) The issuing of its own
units by a company, unit trust or limited partnership which would be a
collective investment fund within the meaning of the Collective Investment
Funds (Jersey) Law 1988 but for the fact that it does not acquire capital by
means of an offer to the public of units for subscription, sale or exchange, as
described in that Law.
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Note:
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For the purposes of this paragraph, “shares” and
“debentures” include any investments falling within paragraph 1
or 2 of the First Schedule and “share warrants” and
“debenture warrants” means any investment which falls within
paragraph 3 of the First Schedule and, in the case of debenture warrants
relates to debentures issued by the person concerned.
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Sale of company
11. Dealing
in the shares of a company and giving advice in relation to such dealing, where
–
(a) the shares comprise
shares carrying at least seventy-five per cent of the voting rights
attributable to share capital which are exercisable in all circumstances at any
general meeting of the company; or
(b) the shares, together
with any already held by the person acquiring them, carry not less than that
percentage of those voting rights; and
(c) the dealing is between
parties each of whom is a single person or a group of connected persons.
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Note:
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For the
purposes of this paragraph –
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“close
relative” means a person’s spouse, his children and step-children,
his parents and step-parents, his brothers and sisters and his step-brothers
and step-sisters;
“connected
persons”, in relation to the seller of the shares, means persons each of
whom is, or is a close relative of, a director or manager of the company and,
in relation to the buyer or underwriter of or the subscriber for the shares,
means persons each of whom is, or is a close relative of, a person who is to be
a director or manager of the company.
Dealing as bare
trustee
12. Dealing
in investments which are or are to be held by the person concerned as bare
trustee, for another person, on that person’s instructions if –
(a) the dealing takes place
in the course of carrying on any business or profession which does not
otherwise constitute investment business;
(b) the person concerned
does not receive any commission or other remuneration, directly or indirectly,
from the beneficiary which is calculated by reference to the value of the
transaction concerned or to any premiums or other sums payable with respect to
those investments; and
(c) the person concerned
does not hold himself out generally as providing a service of dealing in
investments.
Investment advice
given by trustees
13. Investment
advice given by a person as trustee to –
(a) a co-trustee for the
purposes of the trust; or
(b) a beneficiary under the
trust concerning his interest in the trust fund,
unless –
(i) that person
otherwise carries on the business of giving investment advice or of
discretionary investment management or holds himself out as carrying on either
of those businesses; or
(ii) he was appointed as a
trustee as a result of his soliciting for business for the purposes of inducing
any person to enter into investment business transactions with him.
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Note:
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For the
purposes of this paragraph –
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“joint enterprise”
shall have the meaning given to it for the purposes of paragraph 8;
“trustee”
includes a duly appointed delegate of the trustee who is participating in a
joint enterprise with him.
Discretionary
investment management by company directors
14. Deciding
as a director of a company on the purchase, sale, subscription for or
underwriting of investments by that company or another company in the same
group as that company, unless –
(a) the director concerned
carries on the business of giving investment advice or otherwise carries on the
business of discretionary investment management or holds himself out as
carrying on either of those businesses;
(b) he was appointed as a
director as a result of his soliciting for business for the purposes of
inducing any person to enter into investment business transactions with him; or
(c) he receives, directly
or indirectly, any commissions or other remuneration for discharging his duties
as a director calculated by reference to the value of the transaction concerned
or to any premiums or other sums payable with respect to those investments.
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Note:
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For the purposes of this paragraph “director”
includes a duly appointed alternate.
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Investment advice
between directors
15. Investment
advice given by a person as director to a co-director for the purposes of the
company unless –
(a) that person otherwise
carries on the business of giving investment advice or of discretionary
investment management or holds himself out as carrying on either of those
businesses; or
(b) he was appointed as a
director as a result of his soliciting for business for the purposes of
inducing any person to enter into investment business transactions with him.
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Note:
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For the
purposes of this paragraph “director” includes a duly appointed
alternate.
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Investment advice
given by protectors
16. Investment
advice given by a person as protector of a trust to a trustee of that trust,
unless –
(a) that person otherwise
carries on the business of giving investment advice or of discretionary
investment management or holds himself out as carrying on either of those
businesses;
(b) he was appointed as a
protector as a result of his soliciting for business for the purposes of
inducing any person to enter into investment business transactions with him; or
(c) he receives, directly
or indirectly, any commissions or other remuneration for discharging his duties
as a protector calculated by reference to the value of the transaction
concerned or to any premiums or other sums payable with respect to those
investments.
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Note:
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For the
purposes of this paragraph –
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“protector”
means a person named in or appointed under the terms of a trust as the person
whose consent is required before the trustee may exercise a power or a
discretion;
“terms of a
trust” shall have the meaning given to it by Article 1 of the Trusts
(Jersey) Law 1984.
THIRD SCHEDULE
(Article 41)
Consequential
amendments of other enactments
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Enactment
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Amendment
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Bankruptcy (Désastre) (Jersey) Law 1990 Article 3
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in clause (ii) of sub-paragraph (c) of paragraph (1) there shall
be inserted at the end the words “or the Investment Business (Jersey)
Law 1998”.
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Companies (Jersey) Law 1991 Article 155
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in clause (ii) of sub-paragraph (b) of paragraph (2) there shall
be inserted the words “or the Investment Business (Jersey) Law
1998”.
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