Banking Business
(General Provisions) (Jersey) Order 2002
THE ECONOMIC
DEVELOPMENT COMMITTEE, in pursuance of Articles 5,
8, 9, 11, 20, 34 and 51 of the Banking
Business (Jersey) Law 1991[1], 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 –
Commencement [see endnotes]
1 Interpretation
(1) In
this Order –
“deposit”, in
relation to a deposit advertisement, means the deposit in relation to which the
advertisement contains –
(a) an
invitation to make such a deposit; or
(b) information
that is intended or might reasonably be presumed to be intended to lead
directly or indirectly to the making of such a deposit;
“deposit-taker”
means, in relation to a deposit, the person carrying on the deposit-taking
business taking the deposit;
“the Law”
means the Banking
Business (Jersey) Law 1991.[2]
(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.
2 Exempt
transactions defined
A transaction described
as an exempt transaction in Articles 3 to 7, inclusive, is prescribed for
the purposes of Article 8(3) of the Law as a transaction to which the
prohibition in Article 8(1) of the Law does not apply.
3 Charities
(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.
4 Industrial
and Provident Societies
(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 Jersey by the Industrial
and Provident Societies (Channel Islands) Order 1965.
5 Advocates
and solicitors
(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
and Solicitors (Jersey) Law 1997;
(b) “practising
solicitor” means –
(i) a solicitor who
is qualified to act as such under the Advocates
and Solicitors (Jersey) Law 1997, 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
Jersey.
6 Investment
dealers
(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
Investment Funds (Recognized Funds) (Rules) (Jersey) Order 2003.[3]
7 Trustees
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.[4]
8 Exempt
persons
A body listed in Schedule 1
is an exempt person for the purposes of Article 8(2)(d) of the Law subject
to the conditions specified in that Schedule in relation to that body.
9 Application
for registration[5]
(1) A
person may apply for registration under Article 9 of the Law by delivering
to the Commission an application in the form approved or provided by the
Commission.[6]
(2) [7]
10 [8]
11 Conditions
of registration
(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 Jersey,
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 24(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 26(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 Jersey 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 Jersey 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 Jersey without the Commission’s approval;
(b) must
not participate with others in a joint venture outside Jersey 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.[9]
(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.
12 Control
of advertising
(1) This
Article applies to a deposit advertisement issued by –
(a) a
registered person that is a company incorporated in Jersey;
(b) a
registered person that is a branch of a company incorporated outside Jersey;
(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 Jersey by a
registered person that is a company incorporated outside Jersey 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 Jersey, if the sole mention in
the advertisement of the branch or other office in Jersey 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 Jersey 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 Jersey;
(b) published
by means of a broadcast (whether in sound or vision or a combination of sound
and vision) received principally in Jersey; 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.
13 Circumstances
in which matters are to be reported directly to Commission
(1) This
Article applies to a person who –
(a) is
the auditor of a registered person; or
(b) has
been appointed under Article 26 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.
14 Citation
This Order may be cited
as the Banking Business (General Provisions) (Jersey) Order 2002.
SCHEDULE 1[10]
(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[11]
(Article 12(3))
Conditions applicable to a deposit advertisement
1 General
(1) A
deposit advertisement must state –
(a) the
full name of the deposit-taker; and
(b) the
business address of the deposit-taker in Jersey.
(2) It
must also state –
(a) if
the deposit-taker is not a company incorporated in Jersey, its place of
incorporation, or in the case of a body other than a company, the place of its
head office;
(b) if
the deposit-taker is a company incorporated in Jersey, 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) Sub-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.
2 Interest
(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.
3 Assets
and Liabilities
(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.
4 Deposit protection
(1) A
deposit advertisement must state in relation to a deposit –
(a) in
every case, whether or not the repayment of the deposit, or the payment of any
interest on the deposit, would (to any extent) be covered under a scheme for
compensating depositors, being a scheme established under Article 37 of
the Law; and
(b) in
the case where the repayment of the deposit, or the payment of any interest on
the deposit, would (to any extent) be covered under a scheme for compensating
depositors established by law (and not merely by agreement) outside Jersey,
that fact.
(2) Nothing
in sub-paragraph (1) prevents the inclusion in a deposit advertisement of
matter relating or apparently relating to any other scheme, or an arrangement, for
covering, guaranteeing, securing or otherwise protecting (to any extent) deposits,
the interest on them, the repayment of deposits, or the payment of the interest
on them.
(3) If
a deposit advertisement states or implies that the repayment of the deposit, or
the payment of any interest on the deposit, would be covered under a scheme
referred to in sub-paragraph (1) (or includes matter as described in
sub-paragraph (2) relating or apparently relating to any other scheme or
an arrangement) the advertisement must state –
(a) if,
under one or more such schemes or arrangements, the repayment or payment is
guaranteed (or the advertisement represents that it is guaranteed), the name of
the provider of that guarantee;
(b) in
every case, the nature and extent of the cover, guarantee, security, or
protection, afforded by each scheme or arrangement; and
(c) in
the case of any scheme referred to in sub-paragraph (1), the maxima that
apply under the scheme as to repayment and payment in respect of as many of the
following as the maxima are applicable to –
(i) an individual
deposit, in the case of any one default by the deposit-taker,
(ii) an
individual depositor, in the case of any one default by the deposit-taker,
(iii) the
aggregate of deposits covered by the scheme, in relation to all deposit-takers
to which the scheme applies.
(4) In
the case of a scheme referred to in sub-paragraph (1), it is sufficient
compliance with clause (a) or (b) of sub-paragraph (3) if a deposit
advertisement that refers to the scheme states the address of a website that
sets out the matters specified in that clause.
5 Currency
A deposit advertisement
must state the currency in which the deposits are to be made.
6 Supplementary Provisions
The matters required to
be included in a deposit advertisement 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.