The Jersey Law Review - February  2003

THE FINANCIAL SERVICES COMMISSION - A CASE FOR REFORM

Simon Howard

1     After the States of Jersey and the Courts of the Island the Jersey Financial Services Commission (“the Commission") arguably ranks as the third most powerful institution within the Island's civil administration.  Since its inception in the middle of 1998 the progress of the Commission in extending the range and depth of regulatory controls over financial services conducted in or from Jersey has been impressive.^[1]  The Commission has also actively participated in a number of international fora^[2] concerned with the development of cross border financial regulation and has succeeded in extending its ability to co-operate with regulatory investigations and enquiries launched by regulators outside the Island^[3]. 

2     The past few years have seen an unprecedented amount of international scrutiny of offshore financial centres and the rate of change has been tremendous in terms of the legislation and practice that responsible offshore finance centres have had to adopt in order to defend their right to continued participation in the global financial economy.  Managing change has been a constant pre-occupation for the Commission in Jersey during this period.  In many countries a shift is under way from solely compliance-based supervision to a more risk-orientated form of oversight.^[4]  The Commission is in the vanguard of this movement and it is arguable that in the process of achieving its goals the Commission has in certain respects outgrown its current statutory framework.  A huge amount of time and effort has been expended over the years by the Commission and politicians to promote the Island as a responsible jurisdiction with a regulatory regime crafted to deliver high or the highest standards of practice from the financial services sector operating out of the Island.  A large amount of the focus has therefore been on the regulation applied to the finance sector.  The Island however must also be involved in setting the standard internationally for the organisation and operation of regulatory bodies in smaller jurisdictions which is no less a vital part of the regulatory equation.  The purpose of this article is to review certain aspects of the constitution and basis for authority of the Commission and to suggest that the time is now right to consider revising certain of the basic statutory provisions relating to its constitution in order to clarify and update the objectives and principles upon which the Commission operates and to consider the introduction of additional provisions to enhance transparency and accountability of the Commission.

3     This is not, however, a clarion call for root and branch reform of the Commission.  As will be seen, a number of the amendments to the constitution and powers of the Commission suggested in this article are already to a large degree followed in practice by the Commission in the exercise of the very wide discretions conferred upon it as to how it regulates itself.  The argument being advanced here is that a reduction of reliance on such wide discretionary powers so as to achieve greater precision and certainty in the legislation governing the Commission will assure consistency of operation by the Commission in the future.   Other amendments suggested in this article are drawn from the statutory framework for the Financial Services Authority in the United Kingdom ("FSA") under the Financial Services and Markets Act 2000 of the United Kingdom ("FSMA") on the basis that the general regulatory model which the Commission has been following in recent years is based upon that adopted in the UK with appropriate amendment and scaling down to fit the size and nature of the financial services industry in Jersey.

4     Many of the financial services businesses in the Island have parent organisations in or reporting lines to the UK and there is a need for Jersey to ensure that its regulatory regime is generally consistent with that followed in the UK.  It also helps to foster greater cooperation and understanding between Jersey’s regulator and the  FSA in the UK.  Increasingly, however, the benchmarking of the Commission will be undertaken against the international recommendations and guidelines emanating from the various supra-national bodies which are energetically engaged in developing a better framework globally for the regulation of banking and financial activities.^[5]  It can be expected that notwithstanding the progress made to date by the Commission in developing its powers and regulatory tools, Jersey will continue to come under pressure to strengthen yet further its independence and effectiveness as a regulator. 

5     The Commission is a statutory body corporate^[6] set up under the Financial Services Commission (Jersey) Law 1998 ("FSC Law").  It took on its full responsibilities on 1st July 1998 when the regulatory functions previously exercised by the Finance & Economics Committee of the States of Jersey (“the Committee") were transferred to it.^[7]

6     Unsurprisingly, the Commission enjoys a large degree of autonomy and independence in relation to regulatory matters and there are only a limited number of areas where the FSC Law provides for influence or control to be exerted over the Commission.  The FSC Law states that subject to the small number of exceptional areas covered by provisions in the FSC Law the Commission shall be independent of the Committee and the States and neither the Committee nor the States should be liable for any act or omission or debt or other obligation of the Commission.^[8]  This reflects the nature of the Commission as a separate body corporate outside the ordinary government structure in the Island.  

7     The legal capacity of the Commission is very broad.  In so far as it is possible for a body corporate to do so, it may exercise the rights, powers and privileges and incur the liabilities and obligations of a natural person of full age and capacity.^[9]  It has power to do anything that is calculated to facilitate or is incidental or conducive to the performance of any of its functions and in the exercise of those functions the Commission may take account of any matter which it considers appropriate.^[10]  These are very wide "self-referencing" provisions.  On the other hand the Committee can, where it considers it to be necessary in the public interest and after consulting with the Commission, issue guidance or general directions in respect of policies to be followed by the Commission.^[11]  The Commission must have regard to any guidance issued to it by the Committee which suggests that while the Commission must take account of and weigh such guidance the Committee ultimately retains its freedom of decision-making on matters within the scope of the guidance.  By contrast, general directions issued by the Committee are binding on and must be followed by the Commission.  These provisions for the issue of guidance or directions from the executive to the regulator may attract attention from observers outside the Island as running contrary to the general trend that the independence of supervisory authorities must be strengthened. 

8     Without independence, effective supervision is not possible; regulators need to be protected from political influence and lawsuits (albeit still being held accountable for responsibly discharging their duties) and budgetary and operational independence must also be secured.  On the other hand there is no one-size-fits-all model for supervisors and the Commission meets substantially all the current international criteria: the FSC Law was amended^[12] to remove the stipulation that its chairman should be a politician; officers of the Commission exercise their extensive powers under statutory immunity from damages;^[13] and the Commission is funded from the regulatory fees and charges payable to it.^[14]  Taking account of the dependence of the Island's economy on financial services and the limited resources of the executive in a small jurisdiction such as Jersey to provide effective scrutiny and monitoring of the Commission through select committees, it is defensible and proper that the Committee should have some reserve powers of a general nature over the Commission.  The current formulation in the FSC Law appears to strike the right balance between being able to provide broad indications from the executive as to how it wishes the Commission to approach its task of supervising and developing financial services business while not interfering in decisions of the Commission on particular matters.  The further restraints on the Committee in this context as noted above are that it must first have consulted with the Commission and be satisfied that its guidance or general direction are necessary in the public interest.^[15]

9          It is important to remember that while no equivalent rights to influence the FSA are conferred on the Treasury in the UK under the FSMA, the FSA is scrutinised by both Parliamentary Committees and the Treasury and also by Practitioner and Consumer Panels^[16] which the FSA has a statutory duty to set up and consult.  The FSA is also subject to annual public meetings^[17] at which it can be questioned about the content of its annual report and the way in which it has discharged or failed to discharge its functions.  This range of heavy-weight machinery directed towards accountability of the FSA is not feasible in a small island jurisdiction.  Furthermore, to the extent that the Commission retains a large degree of responsibility for the preparation of regulatory and new financial services legislation and amendments to the same on behalf of the Committee (as discussed below) this provides further strong justification for retaining the current guidance/general direction powers of the Committee over the Commission.

10    The functions and authority of the Commission are vested in a board of Commissioners headed by a chairman.^[18]  The States controls the composition of the board through its power to appoint Commissioners to office following an in camera debate.^[19]  Interestingly, while the States has the power to appoint Commissioners, it is the Committee which has the power in a number of specified circumstances to remove them from office including where a Commissioner is unable or unfit to discharge the function of a Commissioner.^[20]  This split of powers to appoint and remove Commissioners between the States and the Committee has the consequence that while debates on the fitness of potential Commissioners must take place in camera any debate on the exercise of the Committee's powers to remove a Commissioner may be subject to whatever access and freedom of information rules apply or will in future apply to the Committee or its successor ministry within a reformed States.  This may be viewed as a desirable thing in the interests of public access to information or as an anomaly which may weaken the ability of the Committee in extreme circumstances to discuss matters in a full and frank way.  In Guernsey, by contrast, the members of the Guernsey Financial Services Commission ("GFSC") are appointed and can be removed by the States of Guernsey and there is no requirement for these States' decisions to be debated in camera.^[21]  The  consistency and openness of the Guernsey model seems preferable and there do not appear to be any material differences between Jersey and Guernsey to justify the need for the different approach in Jersey on this issue.

11     The FSC Law requires that the board of Commissioners must have a spread of appropriately experienced members and members exercising a representative function.^[22]  In the light of the exceptionally wide range of powers exercised by the Commission and in the absence of any formal internal appeals’ mechanism within the Commission structure^[23] it is apparent that very great importance attaches to the composition of the board.  A proper balance in membership is vital if it is to have the ability properly to represent the interests of those groupings which the FSC Law requires to be represented, and to act as an effective monitoring and review body over the day to day activities and policy initiatives of the Commission as a whole.  The thrust of article 3 of the FSC Law envisages quite a large board of Commissioners.  There must be not less than seven members including the chairman.  The Commissioners must include (a) persons with experience of the type of financial services supervised by the Commission; (b) regular users on their own account or on behalf of others or representatives of those users of financial services of any kind supervised by the Commission; and (c) individuals representing the public interest.

12     In addition there is significant proviso^[24] which states that the composition of the Commission shall be such as to secure a "proper balance" between the interests of persons carrying on the business of financial services, the users of such services and the interests of the public at large. 

13     The use of the words "persons", "users" and "individuals" in the plural in these provisions suggests that there will be more than one member in respect of each representative grouping and on the basis that a proper balance is to be achieved between the interest groups (whose interests will inevitably conflict or compete with each other from time to time on different issues) one assumes that it would be difficult or inappropriate for a single Commissioner to represent the interests of more than one group.  However, as States debates on the appointment of Commissioners are held in camera the public at large do not know which Commissioner represents which interest grouping or on what basis the States have arrived at the conclusion that the membership of the Commission achieves the proper balance which the statute requires.

14     More fundamentally, the question can be asked whether it is really practical to expect the board to achieve the level of "proper balance" which the FSC Law envisages they will bring to their deliberations and still operate effectively in the current climate affecting offshore financial centres where the urgent drive is to bring down the barriers of client confidentiality and massively to extend the investigatatory powers of regulators to intervene in financial services activities.  Is it not more realistic to accept that the board needs to be (and arguably is in fact) constituted not as a "representative board" but as a "professional regulatory board"?  If so, then appropriate amendments are needed to the FSC Law and other means need to be found to build in the checks and balances which will be necessary if the board is constituted with a pro-regulatory bias.  Again the Guernsey model appears to be superior.  The GFSC consists of five members who are nominated on the basis that they have "knowledge, qualifications or experience appropriate to the development and supervision of finance business in the Bailiwick".^[25]

15     The requirement under the original terms of the FSC Law that the chairman of the Commission should be a member of the Committee was removed by an early amendment in 1998.^[26]  But there is no prohibition on Commissioners standing for election to the States.  If the powers of the Committee to issue guidance and general directions to the Commission are to be retained as a necessary safeguard given the size and limitations of Jersey and its dependence on financial services, the situation should not be compounded by the possibility of over-lapping memberships.  A separation of powers in the financial services arena between law makers and law enforcer is desirable and could easily be achieved in this respect at least.  Moreover, the largely non-executive nature of the current board of Commissioners should be translated into a legal requirement in the FSC Law that a majority of Commissioners be non-executive in order that they can exercise an independent perspective and scrutiny over the Commission's executives and employees and its overall performance.  At the same time the opportunity should be taken to entrench a requirement for a non-executive chairman and a separate chief executive (as is currently implemented in practice).  Such a split between the executive and non-executive roles of senior members of the Commission would build into its constitution an extra layer of internal control.  Under such an arrangement the financial services industry and the wider public in the Island would have and continue in future to have in the chairman someone whom they could approach with anxieties over general actions or proposals of the Commission who is not immediately responsible for those issues and who can act as an internal and informal court of appeal.

16     It is in relation to the definition of the primary functions and objectives of the Commission that there appears to be  the greatest need for review and clarification.  The Commission's own mission statement in its 2001 Annual Report^[27] discloses that it has already on its own initiative re-ordered its priorities and adopted an additional objective or principle which probably originates from the FSMA^[28] and the increasing pressures internationally to combat terrorism and financial crime. 

17     The general functions of the Commission are set out in article 5 of the FSC Law as: (a) the supervision and development of financial services provided in or from within the Island; (b) providing the States, any committee of the States or any other public body with reports, advice, assistance and information in relation to any matter connected with financial services; (c) preparing and submitting to the Committee recommendations for the introduction, amendment or replacement of legislation appertaining to financial services, companies and other forms of business structure; and (d) such functions in relation to financial services or such incidental or ancillary matters as are required or authorised by or under any enactment or as the States may by Regulations transfer. 

18     Article 6 of the FSC Law goes on to transfer to the Commission specific regulatory and administrative functions under existing financial services and related laws in the Island.

19     Article 7 of the FSC Law then sets out the particular guiding principles which must motivate the Commission in pursuit of its functions.  This Article requires the Commission in particular to have regard to -

• the reduction of risk to the public of financial loss due to dishonesty, incompetence or malpractice or the financial unsoundness of persons carrying on the business of financial services in or from within the Island;

• the protection and enhancement of the reputation and integrity of the Island in commercial and financial matters; and

• the best economic interests of the Island.

20     The FSC Law presents these guiding principles as being on an equal footing.   In its 2001 Annual Report the Commission appears to have re-modelled its objectives/principles and elevated one of the guiding principles to its single most important purpose which it states will be fulfilled by pursuing the principles set down in the FSC Law together with a regulatory objective seemingly imported from the FSMA.  The 2001 Annual Report states that "The Commission's key purpose is: To maintain Jersey's position as an international finance centre with the highest regulatory standards by:

• reducing risk to the public;

• protecting and enhancing the Island's reputation and integrity;

• safe-guarding the Island's best economic interests; and in pursuit of the above

• contributing to the fight against financial crime."^[29]

21     There are certain difficulties with the Commission's statement of its key purpose.  The second bullet point in its formulation merely serves to repeat the opening statement of key purpose without expanding on the methods by which the key purpose is to be achieved.  The reference to the "best economic interests" of the Island which is the formula of words used in the FSC Law is opaque and has no readily understood and definitive meaning.  In fact it is open to more than one interpretation.  It would be better if a clearer statement of principle was substituted for this wording.  On the one hand the Island's best economic interests may be identified with the drive for higher regulatory standards as the means to assure continuing international acceptance of offshore financial centres.  But this approach to interpretation again merely begs the question set out in the opening statement of key purpose and does not serve to elaborate on it.  On the other hand, at a time when the other traditional areas of economic activity in the Island are in confirmed decline the best economic interests of the Island are served by ensuring that the Island's financial services sector remains internationally competitive as any material loss of competitiveness may result in significant outflows of business.  However such an interpretation is likely to conflict with the Commission's opening statement of its key purpose emphasising the adoption of the highest regulatory standards if in practice those standards are set higher than the current norms in the offshore world.  The much debated principle of an international level playing field is still a long way off from becoming reality.  The additional goal of contributing to the fight against financial crime is clearly a welcome and vital addition but has been shoe-horned into the mission statement on the back of the discretion for the Commission to take account of any matter which it considers appropriate.  It ought to be part of the express objectives of the Commission included in the FSC Law as in the case in Guernseyunder the Financial Services Commission (Bailiwick of Guernsey) Law, 1987 as amended.^[30]

22     Notwithstanding that it is now four years old, the recommendation in the Edwards Review^[31] that the objectives, duties and functions of the regulatory bodies in the Crown Dependencies should be brought together in a single mandate statement has not yet been implemented.  The Edwards statement  continues to provide a clear, concise and up-to-date formula.  It does not emphasise any one objective over any other but encapsulates the range of responsibilities to be discharged by the regulator -

• to protect customers, non-resident as well as resident, through effective licensing and supervision designed to ensure solvency, orderly markets and good conduct of business and to prevent fraud;

• to help prevent and combat use of the Islands’ facilities for money-laundering and other forms of financial crime; 

• to co-operate fully with overseas authorities to these ends;

• to enhance the reputation of the Islands as finance centres;

• to develop regulatory policies accordingly and advise the Islands’ Parliaments on requirements for legislation; and

• to ensure that the Commissions are staffed and managed to deliver these functions to the highest standards.^[32]

23     The Commission's main functions and objectives as stated in the FSC Law are in need of review.  It is also submitted that a statutory duty should be imposed on the Commission to include in its Annual Report a statement as to the extent to which, in its opinion, its regulatory functions and objectives as set out in the FSC Law have been met.

24     In the course of the preparation of the FSMA in the United Kingdom a Joint Committee of the Lords and Commons was concerned about the impact that the FSA's statutory duties and objectives would have on the UK financial services sector with particular reference to the burden of regulation and compliance and its effect on competitiveness.^[33]  Indeed, certain voices in the debate wished to see the fostering of competition and competitiveness included as additional objectives of the FSA.  This was resisted by both Government and the FSA as confusing the role of the regulator with that of the competition authorities in the United Kingdom and because it would place the FSA in a difficult position when dealing with foreign regulators if it was obliged to promote the United Kingdom's interests.  In the end the balance was struck by incorporating a series of seven restraining principles into the FSMA to which the FSA must have regard in discharging its general functions.^[34]  The seven principles are -

(1)  the need to use its resources in the most efficient and economic way;

(2) the responsibilities of those who manage the affairs of authorised [i.e. regulated] persons;

(3)  the principle that a burden or restriction which is imposed on a person, or the carrying on of an activity should be proportionate to the benefits considered in general terms which are expected to result from the imposition of that burden or restriction;

(4)  the desirability of facilitating innovation in connection with regulated activities;

(5)  the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom;

(6)  the need to minimise the adverse effects on competition that may arise from anything done in the discharge of those functions;

(7)  the desirability of facilitating competition between those who are subject to any form of regulation by the FSA. 

25     Considerations of proportionality, innovation and competitiveness help to keep the FSA focused on the question whether any policy, regulation or change is really necessary.  The same considerations are equally relevant to the needs and interests of the financial services sector in Jersey and the longer term economic well-being of the Island and should be considered for inclusion in some form in the FSC Law as a counter-balance to the enormously wide powers and discretions vested in the Commission by an increasing number of statutory provisions.  The formulation of these principles in general terms and the fact that in the UK model the FSA is required only to "have regard" to them ensures that the FSA gives proper weight to the principles but at the same time does not expose the regulator to any significant degree of risk from tactical threats of litigation in relation to individual regulatory decisions. 

26     The annual reporting requirements of the Commission under the FSC Law are stated very shortly.^[35]  There is an obligation on the Commission to prepare annual financial accounts "and a report on its operations during the year".  The annual accounts and report have to be presented to and laid before the States.  Save for specifying the financial audit requirements of the annual accounts the FSC Law does not require the Commission's annual report to adopt any particular form.  In the UK the FSA is required to report annually to the Treasury with the report then being presented to Parliament.^[36]  The FSMA requires the FSA's Annual Report to address the following issues -

(a)        the discharge of its functions;

(b)        the extent to which in its opinion, the regulatory objectives have been met;

(c)        its consideration of the seven restraining principles (referred to above);

(d)        any other matters as the Treasury may from time to time direct.

27     The Commission's Annual Report format does in large part address the first two reporting requirements applicable to the FSA but amending the FSC Law to specify more clearly the reporting duties of the Commission would be desirable and consistent with good regulatory practice and corporate governance.

28     The issue of guidance notes and the rule making function of the Commission is a further key area where review is desirable.  The Commission does not have a formal legislative function as it does not have power to promulgate laws or subordinate legislation related to financial services.  The States and the Committee retain these legislative powers.  In this context a distinction must be drawn between regulatory policies developed by the Commission and the Commission's powers under a number of laws to formulate non-legally binding codes of practice and to issue general guidance as to how regulated persons should go about carrying on their regulated activities.  Development and promulgation of policy statements must be accepted as an internal function and as the prerogative of the Commission and its board which cannot be subjected to formal review by any third party provided that the Commission has developed its policy statements for proper purposes and has taken account of any relevant guidance or directions issued by the Committee and the mandatory guiding principles.  Under article 8 of the FSC Law the Commission has a wide discretion to "consult and seek the advice of such persons or bodies whether inside or outside the Island as it considers appropriate".  In practice the Commission consults informally with the Committee on any new policy statements it is proposing to introduce.  As for the most part the content of codes of conduct and general guidance issued by the Commission define industry best practice standards and because material or persistent deviations from those standards can result in significant regulatory consequences and possible criminal sanctions, there is an obvious need to ensure that these measures enjoy the support of the industry to which they are to apply and are developed and implemented only after full consultation with that industry.  The possibility that anti-money laundering rules and procedures promulgated by the Commission may need to have legally binding status in order to meet international regulatory recommendations^[37] re-enforces the importance of the consultation process.

29     As well as promulgating codes of practice and guidance notes the Commission plays a very active role in the preparation and development of new financial services legislation in the Island co-ordinating the drafting process, inviting and reviewing comments on draft legislation from industry, liaising with the law draftsman's office of the States and presenting effectively final form draft legislation to the Committee so that the Committee can take the legislation forward to the States or make Orders as may be appropriate.  In this area the Commission appears to be acting as a delegate of the Committee in the preparation of new legislation many pieces of which contain wide ranging regulatory powers and powers of intervention vested in the Commission.  Ideally, the Commission should not have any direct responsibilities for controlling the process of developing and delivery of new financial services legislation as distinct from participating in discussions and advising on the requirements for and content of new legislation.  This seems to be recognised in the FSC Law itself which describes the Commission's role as one of preparing and submitting to the Committee "recommendations" for the introduction, amendment or replacement of financial services legislation.^[38]  This is arguably different from preparing and delivering final form drafts of legislation to the Committee.  The FSC Law does not envisage a "downwards" delegation of law drafting responsibility from the Committee but an "upwards" advisory function to the Committee.  The Edwards Review is even clearer in this regard describing the model obligation in this area as being one to develop regulatory policies and "advise" the States on requirements for legislation.^[39]  However, in a small jurisdiction where most of the technical know-how in relation to financial services, outside the private sector, has been concentrated in the Commission it may be unavoidable that the Committee will need to rely heavily on the Commission in this context.  If it is accepted that the Commission's role must go beyond an advisory one to a delegated function on behalf of the Committee, that should be stated in the FSC Law. In such circumstances there is even more need to replace the Commission's current consultation processes which are operated at the discretion of the Commission with a statutory duty to operate effective arrangements for consulting financial services providers and consumers on the acceptability and workability of new legislative provisions.  Such a statutory duty would not be likely dramatically to increase the burden on the Commission in seeking industry views and comments on new provisions, but the impetus of a statutory duty could be expected to bring the benefits of a more formal and structured approach to the consultation process.  A recent International Monetary Fund and World Bank paper^[40] describes as a core supervisory principle the need to address the ability of the supervisory authority to do its job, particularly in terms of having sufficient discretionary powers but balanced with a suitable framework for transparency and accountability.

30     Plans are well advanced for the introduction of a financial services Ombudsman in Jersey^[41] with responsibility for dealing with complaints made by customers of financial services businesses in the Island.  This will relieve the Commission of its current mediation role in relation to such complaints which it is not suited to handling.  The primary focus of the Commission is on the supervision of financial services businesses and their general conduct of business, not on resolving individual difficulties between customers and service providers.  The Commission has no powers to award compensation or to order restitution in favour of complainants.  Consequential amendments to the FSC Law may need to be made upon introduction of the Ombudsman procedure in order to remove those provisions in the FSC Law which hint at the mediation and complaints resolution role which the Commission may and currently does in practice discharge.^[42]

31     While regulated businesses in the Island are required to maintain complaints procedures for handling customer complaints the Commission itself is not subject to any similar requirement at the present time in connection with users of the Commission's services and procedures.  The Commission is aware of this lacuna^[43] and recognises the importance of having in place a proper process for the hearing of appeals against its decisions.  Consideration is being given by the Commission as to how it can improve its arrangements in this regard.  This is part of a larger movement emphasising the need for increased awareness of the importance of good governance and transparency not only for regulated entities but supervisory agencies as well.^[44]  Raising the importance of sound governance and making it more clearly defined and then implementing it through adequately resourced and trained staff is an additional objective that the Commission must continue to pursue.  Guernseyhas already stolen a march on Jersey by setting out the foundations for compliance by the GFSC with good corporate governance principles and has implemented a procedure for monitoring and reporting on those principles.^[45]

32     While this article is by no means a comprehensive review of the FSC Law it serves to highlight that there are good reasons to consider implementing a general review and overhaul of the legislation.  "A good international reputation should be matched by equal respect at home".^[46]  This is no easy task for the Commission to achieve.  "A regulatory body has a tight-rope to walk, steering a course which aims to protect the interests of those whom it is protecting, to meet benchmark standards established internationally and to complement an environment in which proprietors and managers of regulated entities find it rewarding to grow their businesses".^[47]  Four years after implementation of the FSC Law and with continuing international scrutiny of the Island's financial services sector, the time is right for a review and updating of the Commission's constitution and its functions and objectives; an exercise which will foster increased confidence and respect from within the Island and hold out a model for other offshore financial centres to emulate.

Simon Howard is an advocate of the Royal Court of Jersey and a partner in Bedell Cristin, P.O. Box 75, 26 New Street, St. Helier, Jersey, JE4 8PP.

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