Financial Services
(Fund Services Business (Accounts, Audits and Reports)) (Jersey) Order 2007
THE MINISTER
FOR ECONOMIC DEVELOPMENT, in pursuance of Articles 17, 18 and
42 of the Financial
Services (Jersey) Law 1998, on the recommendation of the Jersey
Financial Services Commission and after having consulted such bodies as appear
to the Commission to represent the interests of persons described in Article 18(1)(a)
and (b) of that Law and registered persons, orders as follows –
Commencement [see endnotes]
1 Interpretation
In this Order, unless the context otherwise requires –
“accounting period”, in respect of a registered person,
means the accounting period for that person that is approved in accordance with
Article 2;
“auditor”, in respect of a registered person, means the
auditor approved by the Commission in respect of that person in accordance with
Article 4;
“auditor’s report” means a report prepared in
accordance with Articles 5 and 7;
“client”, in respect of a registered person, means –
(a) a
person who has entered into an agreement for services to be provided by the
registered person when carrying on fund services business; or
(b) a
person who has received or may receive the benefit of services to be provided
or arranged by the registered person when carrying on fund services business;
“Commission” means the Jersey Financial Services
Commission;
“declaration” means a declaration that complies with Article 6;
“financial statements”, in respect of a registered
person, means financial statements prepared in respect of that person that
comply with the requirements of Article 8 or 9;
“Law” means the Financial Services (Jersey) Law 1998;
“registered person” means a person registered under the
Law to carry on fund services business.
2 Accounting
period
(1) A person applying under
the Law for registration in respect of fund services business shall, at the
same time, apply to the Commission for approval of –
(a) a
period, of not more than 18 months, that is proposed by the
registered person to be the first accounting period for the person; and
(b) the
period that is proposed by the registered person to be the accounting period
for the person after the end of the first accounting period.
(2) A registered person
shall not change an accounting period without the Commission’s approval.
(3) A registered person may
apply to the Commission for approval of a proposed accounting period for the
person in place of an accounting period that is, under paragraph (4),
approved in respect of the person by the Commission.
(4) The Commission shall
approve or refuse to approve an accounting period proposed in an application
under paragraph (1) or (3).
(5) The Commission shall
only approve, as the accounting period for a registered person after the end of
the first accounting period, a period of 12 months, unless it is satisfied
that there are reasonable grounds for approving another period.
(6) A registered person who
fails to comply with paragraph (1) or (2) shall be guilty of an offence
and shall be liable to a fine.
3 Accounting
records
(1) A registered person shall
keep accounting records that –
(a) show
and explain each of the registered person’s transactions in respect of
the fund services business carried on by the registered person;
(b) enable
financial statements to be prepared in respect of the person; and
(c) are
capable of disclosing at any time with reasonable accuracy the
person’s –
(i) financial
position, and
(ii) degree
of compliance with any financial resources requirements of the Commission that
relate to the person.
(2) A registered person
shall ensure that accounting records kept in compliance with paragraph (1),
whether in electronic form or any other form –
(a) are
stored in a way that minimizes any risk of their loss due to theft, fire,
flood, corruption or unauthorized erasure;
(b) are
stored in a way that prevents unauthorized access to the records; and
(c) are
backed up or otherwise duplicated so that copies shall be available if the
originals are lost, destroyed, corrupted or erased.
(3) A registered person
shall ensure that accounting records kept in compliance with paragraph (1)
and the backup copy or duplicate made in compliance with paragraph (2)(c)
are kept by the person for at least 10 years from the date the records
were made.
(4) A registered person
shall not be taken to have complied with paragraph (1) or (2) by keeping
in an electronic form any accounting records, or by keeping in an electronic
form any backup copies or duplicates of the records, unless he or she ensures
that an electronic device capable of reading the records is provided to a
person acting on behalf of the Commission, as soon as reasonably practicable
after the person requests the device to be provided.
(5) A registered person who
fails to comply with paragraph (1), (2) or (3) shall be guilty of an
offence and shall be liable to a fine.
4 Appointment
of auditor
(1) A registered person
shall not employ or engage a person to be an auditor in respect of the
person’s fund services business unless the auditor is approved under paragraph (4)
to be the auditor in respect of the person’s fund services business.
(2) A registered person who
fails to comply with paragraph (1) shall be guilty of an offence and shall
be liable to a fine.
(3) A person may apply to
the Commission for approval of a person nominated in the application to be the
auditor in respect of the person’s fund services business.
(4) The Commission may
approve, or refuse to approve, a person nominated in an application under paragraph (3)
to be the auditor in respect of a person’s fund services business.
(5) The Commission shall
approve under this Article an auditor in respect of a registered person only if
it is satisfied that, having regard to the type of fund services business
carried on by the registered person, the person is suitable to be an auditor in
respect of the registered person.
(6) If the appointment of
an auditor is terminated for any reason, the auditor shall, within 7 days
of the termination, provide to the Commission a statement as to whether there
are circumstances relating to the termination that should be brought to the
Commission’s attention and, if there are, what those circumstances are.
(7) An auditor who fails to
comply with paragraph (6) shall be guilty of an offence and shall be
liable to a fine.
5 Auditor
to prepare financial statements and reports
(1) A registered person
shall, as soon as practicable after the end of an accounting period, provide to
the person’s auditor financial statements and a declaration in respect of
that period.
(2) The auditor shall
prepare reports in respect of both the financial statements and the declaration
and provide them to the registered person.
(3) A registered person
who, on being requested to do so by the auditor for the purposes of this Order,
fails to give the auditor –
(a) access
at all reasonable times to the person’s records and documents relating to
the person’s business; or
(b) other
information, or an explanation, that the auditor considers necessary for the
performance of the auditor’s duties under this Order,
shall be guilty of an offence and shall be liable to a fine.
(4) A registered person, or
a person acting or purporting to be acting on behalf of a registered person,
who knowingly or recklessly makes a statement to the registered person’s
auditor –
(a) that
conveys or purports to convey information or an explanation that the auditor
requires or is entitled to require in the course of the auditor’s duties
under this Order; and
(b) that
is misleading, false or deceptive in a material particular,
shall be guilty of an offence and shall be liable to a fine.
6 Declaration
(1) A declaration shall
state whether, during the relevant accounting period, the registered
person –
(a) has
complied with the requirements of the Law;
(b) has
complied with the requirements of any Order, or of any Code of Practice made
under Article 19 of the Law, that apply to the registered person;
(c) has
maintained proper accounting records and adequate systems to enable the
registered person to maintain proper accounting records; and
(d) has
complied with the requirements, of all laws relating to money laundering, with
which the registered person is required to comply.
(2) If a registered person
has failed to comply with a requirement referred to in paragraph (1)
(including paragraph (1)(c)) the declaration shall contain details of all
material failures and specify any measures taken, or to be taken, by the
registered person to ensure that the failures are not repeated.
(3) A registered person who
knowingly or recklessly includes in a declaration a statement that is
misleading, false or deceptive in a material particular shall be guilty of an
offence and shall be liable to a fine.
7 Auditor’s
reports
(1) An auditor’s
report shall be prepared, and the audit leading to that report shall be
conducted, in accordance with –
(a) the
Auditing Standards issued by the Auditing Practices Board;
(b) the
International Standards on Auditing issued by the International Federation of
Accountants; or
(c) another
standard that is generally recognized and that is agreed between the registered
person and the Commission.
(2) An auditor’s
report that relates to financial statements shall specify whether the
statements have been prepared in accordance with this Order.
(3) An auditor’s
report that relates to a declaration shall –
(a) if,
while conducting the audit for the purpose of preparing the report, the auditor
became aware of no matter that could be taken as indicating that a statement in
the declaration was incorrect, state that this is the case; or
(b) if
the auditor cannot confirm that while conducting the audit for the purpose of
preparing the report he or she became aware of no matter that could be taken as
indicating that a statement in the declaration was incorrect, specify the
matter that could be taken as indicating that a statement in the declaration
was incorrect.
8 Financial
statements to be provided
(1) A registered person
shall provide to the Commission financial statements in respect of each
accounting period.
(2) The statements shall be
provided by a person –
(a) within
4 months after the end of the accounting period; or
(b) if
the Commission thinks there are special circumstances in relation to the
person, within the period (being not more than 8 months after the end of
the accounting period) that the Commission agrees with the person before the
end of the period 4 months after the end of the accounting period.
(3) The financial statements
shall be accompanied by –
(a) a
declaration;
(b) an
auditor’s report in respect of the financial statements and the
declaration;
(c) any
report prepared by an internal or external auditor that is available to the
registered person and addresses a relevant matter;
(d) brief
details of any report prepared by an accountant or consultant that is available
to the registered person and addresses a relevant matter;
(e) any
report prepared by an internal or external auditor that is available to the
registered person and addresses a relevant matter in respect of a client of the
registered person; and
(f) brief
details of any report prepared by an accountant or consultant that is available
to the registered person and addresses a relevant matter in respect of a client
of the registered person.
(4) In paragraph (3),
“relevant matter”, in respect of a registered person,
means –
(a) a
breakdown or material weakness in the person’s internal controls or
procedures; and
(b) any
subsequent recommendations of the auditor, accountant or consultant as to how
to improve those procedures.
(5) The financial
statements of a registered person shall be prepared in accordance
with –
(a) International
Financial Reporting Standards;
(b) the
United Kingdom Generally Accepted Accounting Practice (GAAP); or
(c) another
standard that is generally recognized and that is agreed between the registered
person and the Commission.
(6) The financial
statements shall show a true and fair view of –
(a) the
state of affairs of the registered person at the end of the relevant accounting
period; and
(b) the
registered person’s profit or loss for that period.
(7) A registered person who
fails to comply with a requirement of this Article shall be guilty of an
offence and shall be liable to a fine.
9 Consolidated
financial statements
(1) This Article applies –
(a) if a
registered person is an affiliated member of a Jersey based group; and
(b) if
U.K. Accounting Standards issued by the U.K. Accounting Standards Board allow
consolidated financial statements to be prepared in respect of the members of
the group.
(2) For the purposes of
this Article a registered person is an affiliated member of a Jersey based
group if the person is a member of an affiliation that includes, comprises, or
is part of, a group the immediate leading member of which is a company or
partnership established in Jersey (whether or not that leading member is itself
a registered person).
(3) If this Article
applies, a registered person’s obligation –
(a) to
provide financial statements to the person’s auditor in accordance with Article 5(1);
and
(b) to
provide financial statements to the Commission in accordance with Article 8(1),
may be satisfied by the auditor or the Commission being provided
with the consolidated financial statements of the group of which the registered
person is a member.
(4) The consolidated
financial statements shall show a true and fair view of –
(a) the
state of affairs of the group as at the end of the relevant accounting period;
and
(b) the
profit or loss of the members of the group for that period.
(5) If affiliated members
of a group acting in accordance with this Article have provided their auditor
with consolidated financial statements for the purpose of Article 5(1) the
auditor shall for the purpose of Article 7(3) issue a single report in
respect of all the separate declarations made by the members of the group in
compliance with Article 6(1).
(6) In this Article
“affiliation” means a group of registered persons carrying on fund
services business, each of whom has been registered by the Commission as a
member of the same affiliation.
10 Exemptions
(1) The Commission may on
the application of a registered person exempt the person from compliance with
all or any part of Articles 2 to 9.
(2) The Commission shall
not grant an exemption unless it has first satisfied itself that by virtue of
the fund services business the registered person carries on or intends to carry
on no client of the person is likely to be prejudiced if the exemption is
granted.
(3) An exemption may be
granted subject to the registered person complying with conditions specified by
the Commission.
(4) An exemption granted
under paragraph (1) shall be of no effect if the registered person fails
to comply with any condition imposed under paragraph (3).
11 Circumstances
to be communicated to the Commission by auditors, accountants and others
(1) The circumstances in
which matters to which Article 18 of the Law applies shall be communicated
to the Commission are those circumstances that give a registered person’s
auditor (whether appointed by virtue of this Order or otherwise), or any reporting
person in respect of the registered person, reasonable cause to believe
that –
(a) a
ground for revoking a registration specified in Article 9(4) of the Law (other
than Article 9(4)(a)) has occurred or may occur in respect of the
registered person;
(b) as a
result of a breach of –
(i) a requirement, of
a Code of Practice issued under Article 19 of the Law, that applies to the
registered person,
(ii) a
requirement, of a law, that applies to the registered person, or
(iii) internal
controls or procedures,
a client of the registered person has incurred, or is at significant
risk of incurring, a material loss.
(2) In this Article
“reporting person”, in respect of a registered person, means an
auditor, accountant, or another person nominated or approved by the Commission
in respect of the person in accordance with Article 8(5), or Article 32(4),
of the Law.
12 Transitional
provisions
(1) Article 2(1)
shall not apply to a relevant person.
(2) A
person who was, immediately before 14th November 2007, an auditor of the fund
services business of a relevant person, shall be taken to have been approved by
the Commission under Article 4(4) to be the auditor in respect of the
relevant person’s fund services business.
(3) For
the first accounting period in relation to a relevant person, the reference in
Article 6(1)(a) to “the Law” shall, in so far as that period
relates to a period before 14th November 2007, be taken to be a reference to
the Collective
Investment Funds (Jersey) Law 1988.
(4) Notwithstanding
Article 8(2), a financial statement in respect of an accounting period
ending before 1st December 2009 shall be provided by a person within
10 months after the end of the accounting period.
(5) In
this Article, “relevant person” means a person who, immediately
before 14th November 2007, held a permit under the Collective
Investment Funds (Jersey) Law 1988 authorizing the person to carry on fund services business in
relation to an unclassified fund.
13 Citation
This Order may be cited as the Financial Services (Fund Services
Business (Accounts, Audits and Reports)) (Jersey) Order 2007.