Jersey R&O 95/2002
BANKING BUSINESS (GENERAL PROVISIONS) (JERSEY) ORDER 2002
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ARRANGEMENTS
OF ARTICLES
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1. Interpretation
2. Exempt
transactions defined
3. Charities
4. Industrial
and Provident Societies
5. Advocates
and solicitors
6. Investment
dealers
7. Trustees
8. Exempt persons
9. Application for
registration under the Law
10. Refund
of annual fee
11. Conditions
of registration
12. Control
of advertising
13. Circumstances in which matters are to
be reported directly to Commission
14. Revocation
15. Citation and
commencement
SCHEDULES
Schedule 1 - Exempt persons
Schedule 2 - Conditions applicable to a deposit
advertisement
Banking Business (Jersey) Law 1991
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BANKING
BUSINESS (GENERAL PROVISIONS)
(JERSEY)
ORDER 2002
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THE FINANCE AND ECONOMICS
COMMITTEE, in pursuance of Articles 5, 7, 8, 10,
19, 33 and 48 of the Banking Business (Jersey) Law 1991, as amended, on the recommendation of the Jersey Financial Commission and having
consulted with such persons as appear to the Committee to represent the
interests of accountants and registered persons, orders as follows -
Interpretation
1.-(1) In this Order “the Law” means the Banking Business
(Jersey) Law 1991.
(2) A reference in this Order to an enactment,
including an enactment of the United Kingdom, is a reference to that enactment
as amended by or under any other enactment.
(3) A reference in this Order to an Article or
a Schedule by number only is a reference to the Article or Schedule of that
number contained in this Order.
Exempt
transactions defined
2. A transaction described
as an exempt transaction in Articles 3 to 7, inclusive, is prescribed for the
purposes of Article 7(3) of the Law as a transaction to which the prohibition in Article 7(1) of the
Law does not apply.
Charities
3.-(1) It is an exempt
transaction for a charity to accept a sum if -
(a) the sum is paid by another charity; or
(b) no interest or premium is payable in
respect of the sum.
(2) In this Article “charity” means an
institution, trust or undertaking, whether corporate or not, that is
established for charitable purposes.
Industrial and Provident Societies
4.-(1) It is an exempt
transaction for an industrial and provident society to accept a sum in the form
of withdrawable share capital.
(2) In this Article “industrial and provident
society” means a society registered or deemed to be registered under the
Industrial and Provident Societies Act 1965 of the United Kingdom as applied to
the Island by the Industrial and Provident Societies (Channel Islands) Order 1965.
Advocates and solicitors
5.-(1) It
is an exempt transaction for a practising advocate or a practising solicitor to
accept a sum in the course of his or her profession.
(2) In this Article -
(a) “practising advocate” means an advocate who
is qualified to act as such under the Advocates (Jersey) Law 1968;
(b) “practising solicitor” means -
(i) a solicitor who is qualified to act as
such under the Solicitors (Jersey) Law 1971, 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.
Investment dealers
6.-(1) It is an exempt transaction for a person to accept a
sum -
(a) to engage in any form of investment dealing
activity for or on behalf of the person by whom or on whose behalf the sum was
paid; or
(b) to engage in any service activity on behalf
of that person.
(2) In this Article -
“investment dealing
activity” means to buy, sell, subscribe for or underwrite investments or to
offer or agree to do so either as principal or as agent;
“service
activity” means any of the following activities -
(a) to make or agree to make -
(i) arrangements with a view to another person
buying, selling, subscribing for or underwriting a particular investment, or
(ii) arrangements with a view to a person who
participates in the arrangements, buying, selling, subscribing for or
underwriting investments;
(b) to manage, or offer to
manage, assets, belonging to another person if -
(i) the
assets consist of or include investments, or
(ii) the arrangements for their management are
such that the assets may consist of or include investments at the discretion of
the person managing or offering or agreeing to manage them and either they have
at any time done so or the arrangements have at any time been held out as
arrangements under which they would do so;
(c) to establish, operate
or wind up a collective investment scheme, including acting as a trustee or custodian
of a recognized fund, as that term is defined in the Collective Investments
Funds (Recognized Funds) (General Provisions) (Jersey) Order 1988.
Trustees
7. It is an exempt
transaction for a person to accept a sum as a trustee -
(a) to lend it, in such a way that it is
segregated from his or her own assets, to one or more persons in any part of
the world duly authorized to carry out a deposit taking business; or
(b) in the course of carrying on the business
of a trustee.
Exempt persons
8. A body listed
in Schedule 1 is an exempt person for the purposes of Article 7(2)(d) of the
Law subject to the conditions specified in that Schedule in relation to
that body.
Application
for registration under the Law
9.-(1) A person may apply for registration under Article 8
of the Law by delivering to the Commission, in duplicate, an application in
the prescribed form.
(2) The application must be made -
(a) if the
person has not previously been registered, before the person carries on or
holds himself out as carrying on a deposit taking business; or
(b) if a
registration certificate is in force in respect of the person, during October
in each year.
(3) An application must be accompanied by -
(a) the appropriate fees;
(b) the
latest information required by Article 8 of the Law; and
(c) such
other information or documents as the Commission may require under that
Article.
(4) An application is in the prescribed form
for the purpose of paragraph (1) if it is made on a form approved or
provided for the purpose by the Commission.
(5) In
paragraph (3)(a) “appropriate fee” means, in the case of a first registration -
(a) an application fee of £10,000; and
(b) a basic annual fee of £13,500 plus an
additional £5,000 for each subsidiary company or branch of the applicant,
situated outside the Island, to which the application refers, to a maximum
additional annual fee of £50,000,
or, in the case of a
subsequent registration, the total
annual fee calculated in accordance with sub-paragraph (b).
Refund
of annual fee
10.-(1) The Commission must refund to an applicant the
annual fee paid in accordance with Article 9(3)(a) if the application -
(a) is refused; or
(b) withdrawn by the applicant before it is granted
or refused.
(2) If an application for registration is
refused, the annual fee shall not be refunded until after -
(a) the
expiration of the period within which, under Article 17 of the Law, notice of appeal may be given; or
(b) if
notice of appeal is given, the appeal is determined or abandoned.
Conditions
of registration
11.-(1) It is a condition of every registration under the
Law that the registered person -
(a) must not commence without the Commission’s
consent a new activity in the Island, being activity that has or may have a
significant effect on the business or profitability of the registered person;
(b) must remove a director, controller or
manager of the registered person appointed under Article 23(1) of the Law if the Commission so requires on the grounds that the Commission does
not consider the director, controller or manager to be a fit and proper person
to hold such office; and
(c) must comply promptly with a notice issued
under Article 25(1) of the Law.
(2) If the registered person is a branch of an
organization it is an additional condition of registration of the registered
person under the Law that the registered person -
(a) must appoint a senior officer, approved by
the Commission, outside the Island to fulfil the obligations imposed by the Law
on the registered person;
(b) must ensure that the person so appointed
informs the Commission of the name of the principal manager of the registered
person in the Island and that of any deputy and, within 14 days, notifies the
Commission of any change in those offices; and
(c) must, unless exempted by the Commission, appoint
a branch auditor approved by the Commission.
(3) If the registered person is a subsidiary of
an organization it is an additional condition of registration of the registered
person under the Law that the registered person -
(a) must not establish or acquire a
representative office, a branch or a subsidiary outside the Island without the
Commission’s approval;
(b) must not participate with others in a joint
venture outside the Island involving a deposit taking, banking or investment
business without the Commission’s approval;
(c) must not enter into an exposure to any one
person or a group of connected persons that exceeds 25% of the registered
person’s agreed capital resources without the Commission’s approval; and
(d) must publish and provide to the Commission
relevant accounts.
(4) In paragraph (3)(d) “relevant accounts” means
accounts -
(a) that have been prepared in accordance with
generally accepted accounting principles;
(b) that show a true and fair view of the
profit or loss of the registered person for the relevant accounting period, and
of the state of the registered person’s affairs at the end of the period; and
(c) that comply with any other requirements of
the Law and of the Companies (Jersey) Law 1991.
(5) The relevant accounts referred to in
paragraph (3)(d) must be published within 3 months of the date of the balance
sheet although a registered person may instead publish for the use of
depositors and potential depositors -
(a) summarized accounts of the registered
person in a form determined by the Commission; or
(b) “true and fair” audited accounts.
Control
of advertising
12.-(1) This
Article applies to a deposit advertisement issued by -
(a) a
registered person that is a company incorporated in the Island;
(b) a
registered person that is a branch of a company incorporated outside the
Island;
(c) a person
other than a registered person, who issues or intends to issue a local deposit
advertisement.
(2) It does not apply to a deposit
advertisement issued in a place outside the Island by a registered person that
is a company incorporated outside the Island if the advertisement is for -
(a) the business of the company as a whole; or
(b) a branch
or other office of the company outside the Island, if the sole mention in the
advertisement of the branch or other office in the Island is as a part of a
geographical list of the places where that company carries on its business.
(3) A deposit advertisement must not be issued
in the Island unless it complies with the conditions specified in Schedule 2.
(4) In this Article “local deposit
advertisement” means a deposit advertisement -
(a) published
in a newspaper, magazine or journal circulating principally in the Island;
(b) published
by means of a broadcast (whether in sound or vision or a combination of sound
and vision) received principally in the Island; or
(c) published
by means of any other electronic communication, as that term is defined by the
Electronic Communications (Jersey) Law 2000, where Jersey is featured as an essential element of the
advertisement.
Circumstances
in which matters are to be reported directly to Commission
13.-(1) This Article applies to a person who -
(a) is the
auditor of a registered person; or
(b) has been
appointed under Article 25 of the Law to make a report in respect of a registered person.
(2) The
person must immediately report to the Commission without informing the
registered person if the person becomes aware of the probable existence of
exceptional circumstances.
(3) Exceptional
circumstance are circumstances in which the interests of depositors in the
registered person could be prejudiced if there were to be made known to the
management of the registered person the fact that a person to whom this Article
applies was aware of the existence of the circumstances.
(4) So, for
example (but without limiting the generality of the paragraph (3)), a
report must be made to the Commission under paragraph (2) if the person
has reason to believe -
(a) that the directors or members of the senior
management of a registered person have committed fraud or misappropriated
property or intend to do so;
(b) that the directors or members of the senior
management are acting in an irresponsible or reckless manner with respect to
the registered person’s affairs, or intend to do so; or
(c) that there has been, or is likely to be, an
occurrence of material significance for the exercise in relation to the
registered person of the Commission’s powers or functions under the Law.
(5) A person
to whom this Article applies must also report circumstances in respect of a
registered person directly to the Commission if having advised the registered
person to inform the Commission of those circumstances within a specified
period the person is satisfied that the registered person has not done so or
has not done so fully or in an adequate manner.
Revocation
14. The following
Orders are revoked -
(a) Banking
Business (General Provisions) (Jersey) Order 1991;
(b) Banking
Business (General Provisions) (Amendment) (Jersey) Order 1994;
(c) Banking
Business (General Provisions) (Amendment No. 2) (Jersey) Order 1998;
(d) Banking
Business (General Provisions) (Amendment No. 3) (Jersey) Order 1998;
(e) Banking Business (General Provisions) (Amendment
No. 4) (Jersey) Order 1999.
Citation and commencement
15. This Order may be cited as
the Banking Business (General Provisions) (Jersey) Order 2002 and shall come
into force on 1st October 2002.
By Order of the
Finance and Economics Committee,
C.M.
NEWCOMBE
Greffier of the States.
18th September
2002.
SCHEDULE 1
(Article
8)
Exempt persons
1. The Channel Islands Co-operative Society
Limited (“the Society”).
Subject
to the following conditions -
1. The exemption only applies to the
acceptance of deposits from members of the Society from time to time and from
persons who (on the date of the coming into force of the Law) were depositors
with the Society.
2. The Society shall limit deposits to 100%
of its most recently published capital and reserves.
3. The Society may only issue deposit
advertisements to persons who are members of the Society or to persons who on
the coming into force of the Law were depositors with the Society, except that
this condition shall not prevent the Society from advertising its deposit
taking services in any of its premises and shall not prevent the Society from
placing notices in any newspaper of changes in any rate of interest payable in
respect of deposits with the Society.
4. The Society’s auditors shall provide to
the Commission an annual statement in writing that conditions 1 and 2, above,
have been complied with.
5. The Society shall provide the Commission
with such information about its business as the Commission may request.
6. The Society shall permit persons authorized
by the Commission for the purpose to carry out inspections of any part of its
activities and shall give any such persons such assistance in the inspection as
they may reasonably require.
2. Community Savings
& Credit Limited (“the Company”).
Subject
to the following conditions -
1. The Company shall not change its auditors
without the prior consent of the Commission.
2. All Board members and directors must be
approved by the Commission.
3. The Commission shall be free to impose
such additional conditions on the activities of the company as it considers
necessary for the protection of the members.
4. The Company shall operate according to
rules which are consistent with those used by Credit Unions operating in the
United Kingdom.
5. The Company shall enter into an Insurance
Bond in a format acceptable to the Commission to protect the savings of members
from fraud or theft.
6. The Company shall provide the Commission
with such information about its business/activities at such frequency as the
Commission may request.
7. The Company shall permit Officers of the
Commission or persons authorized by it for the purpose to carry out inspections
of any part of the Company’s activities and shall give such persons such
assistance in inspection as they may reasonably require.
8. The Company shall submit copies of its
annual audited accounts to the Commission within 3 months of its financial year
end.
SCHEDULE 2
(Article
12(3))
Conditions applicable to a deposit advertisement
GENERAL
1.-(1) A
deposit advertisement must state -
(a) the full name of the deposit taker; and
(b) the business address of the deposit taker
in the Island.
(2) It must also state -
(a) if the deposit taker is not a company
incorporated in the Island, its place of incorporation, or in the case of a
body other than a company, the place of its head office; or
(b) if the deposit taker is a company
incorporated in the Island, that copies of the deposit taker’s latest audited
accounts are available for inspection on request; or
(c) if the deposit taker is not a registered
person, that fact together with details its place of registration, if any.
(3) Paragraph (2)(b) shall not apply in
relation to a deposit advertisement issued by the exhibition of a cinematograph
film or by way of sound or television broadcasting if the advertisement
contains a statement that further particulars will be sent if application is
made to the address specified in the advertisement, and those particulars
include the information specified in that sub-paragraph.
INTEREST
2.-(1) If
a deposit advertisement specifies a rate of interest payable on deposits the
advertisement must state -
(a) any minimum amount that must be deposited
to earn the rate of interest;
(b) any period of time during which no interest
will be payable;
(c) any minimum period of time during which a
deposit must be retained by the deposit-taker in order to earn the rate of
interest;
(d) any minimum period of notice that must be
given before repayment may be required of a deposit earning the rate of
interest; and
(e) the intervals at which the interest will be
paid.
(2) If the rate of interest that is specified
is not an annual rate of simple interest, the advertisement must state the
basis on which the rate will be calculated.
(3) If the rate of interest that is specified
may be varied during the period for which the deposit will be held this must be
stated in the advertisement.
(4) If interest will or may not be paid in full
at the rate that is specified, this must be stated in the advertisement, and
the advertisement must state the nature and the amount of or rate of any
deductions that will or may be made from the interest before payment.
(5) If the rate of interest that is specified
is or may not be the rate at which interest will be payable in respect of
deposits on the date on which the advertisement is issued this must be stated
in the advertisement, and the advertisement must state the date on which
interest was payable at the rate that is specified, such date being as close as
reasonably practicable to the date on which the advertisement is issued.
(6) If an advertisement specifies more than one
rate of interest payable in respect of deposits of a particular amount the
advertisement must contain the information required by any of the foregoing
sub-paragraphs in relation to each such rate.
(7) If different rates of interest apply to
deposits of different amounts, the advertisement must contain the information
required by any of the foregoing sub-paragraphs in relation to each such rate.
ASSETS AND LIABILITIES
3.-(1) If
a deposit advertisement contains a reference to the amount of the paid-up
capital and reserves of a holding company of a registered person, or of a group
of which the registered person is a member, the advertisement must also state
with equal prominence the amount of the paid-up capital and reserves of the
registered person, described as such.
(2) If an advertisement contains a reference to
the amount of the assets of a holding company of a registered person, or of a
group of which the registered person is a member -
(a) the advertisement must, unless that amount
relates to the net assets of that holding company or group and is so described,
state with equal prominence the amount of the liabilities of that holding
company or group described as such; and
(b) the advertisement must state with equal
prominence the amount of the net assets of the registered person, described as
such.
(3) In this paragraph -
(a) “liabilities” includes provisions;
(b) the net assets of a company or a group
shall be taken to be the total assets less the liabilities;
(c) a group means a company and all its
subsidiaries; and
(d) a company also means a building society.
DEPOSIT PROTECTION
4. A deposit advertisement must not state or
imply that the repayment of any deposits or the payment of any interest payable
on any deposits is guaranteed or secured unless the advertisement also states
the nature and extent of the guarantee and the name of the guarantor, or the
nature and extent of the security, as the case may be.
CURRENCY
5. A deposit advertisement must state the
currency in which the deposits are to be made.
SUPPLEMENTARY PROVISIONS
6. The matters required to be included in a deposit
advertisements by virtue of this Schedule must be shown clearly and legibly, or
in the case of an advertisement issued by the exhibition of a cinematograph
film or by way of sound or television broadcast, spoken clearly.