Financial Services
(Trust Company and Investment Business (Accounts, Audits and Reports)) (Jersey)
Order 2007
THE MINISTER
FOR ECONOMIC DEVELOPMENT, in pursuance of 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 the 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 the registered person that is approved under
Article 2;
“auditor”, in respect of a registered person, means the
auditor who is approved under Article 3 in respect of the registered
person’s relevant business;
“auditor’s report” means a report prepared in
accordance with Article 8;
“client”, in relation to a registered person who carries
on investment business, means a person, whether or not resident in Jersey, with
or for whom the registered person transacts or has transacted investment
business;
“customer”, in relation to a registered person who
carries on trust company business, means –
(a) a
person who has entered into an agreement for the provision of services to be
provided by the registered person when carrying on trust company 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 trust company business;
“declaration” means a declaration that complies with
Article 5;
“directors’ report” means a report that complies
with Article 6;
“financial statements”, in respect of a registered
person, means financial statements, prepared in respect of the registered
person, that comply with Article 9;
“group” means a group comprised of companies,
partnerships or both;
“Law” means the Financial Services (Jersey) Law 1998;
“relevant business” means trust company business,
investment business or both;
“registered person” means a person registered under the
Law to carry on relevant business.
2 Accounting
period
(1) A person who applies
under the Law for registration in respect of relevant 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 in the application to
be the first accounting period for the person; and
(b) the
period that is proposed in the application to be the accounting period for the
person after the end of the first accounting period.
(2) The Commission shall
approve or refuse to approve an accounting period proposed in an application
under paragraph (1) for a person.
(3) A registered person
shall not, without the Commission’s approval, change an accounting period
approved under this Article for the person.
(4) A person may apply to
the Commission for approval of a period, proposed in the application, to be the
accounting period for the person in place of the accounting period approved
under this Article for the person.
(5) The Commission shall
approve or refuse to approve an accounting period proposed in an application
under paragraph (4).
(6) The Commission shall
only approve, as the accounting period for a 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, which shall not be more
than 18 months.
(7) A person who fails to
comply with paragraph (1) or (3) shall be guilty of an offence and shall
be liable to a fine.
3 Appointment
of auditor
(1) A registered person
shall not engage a person to be an auditor in respect of the registered
person’s relevant business, unless the person is approved under paragraph (4)
to be the auditor in respect of that 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 another person, nominated in the application by
the applicant, to be the auditor in respect of relevant business carried on, or
to be carried on, by the applicant.
(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 relevant business carried
on, or to be carried on, by the applicant.
(5) The Commission shall
approve under paragraph (4) a person, nominated in an application under
paragraph (3) to be the auditor in respect of relevant business carried
on, or to be carried on, by the applicant, only if it is satisfied
that –
(a) the
person nominated is not an employee of the applicant and is independent of the
applicant; and
(b) having
regard to the relevant business carried on, or to be carried on, by the
applicant, the person nominated is suitable to be an auditor in respect of that
business.
(6) If the appointment of
an auditor is terminated by either the registered person or the auditor, the
auditor shall, within 7 days of the termination, provide the Commission with 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.
4 Accounting
records
(1) A registered person who
is registered to carry on relevant business shall keep accounting records that –
(a) show
and explain each of the registered person’s transactions in respect of
that business carried on by the registered person;
(b) enable
financial statements to be prepared in relation to the registered 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 accordance with paragraph (1),
whether in electronic form or any other form –
(a) are
so stored as to minimize any risk of their loss due to theft, fire, flood,
corruption or unauthorized erasure;
(b) are
so stored as to prevent unauthorized access; 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 accordance with paragraph (1)
and the backup copy or duplicate made in accordance with paragraph (2)(c)
are retained for a period of at least 10 years from the date the records were
made.
(4) 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.
5 Declaration
(1) A registered person
(or, if the registered person is a company or a partnership, a director of the
company or partner of the partnership) shall prepare and sign, after a relevant
accounting period of the registered person, a declaration in relation to the
period.
(2) If a declaration under
paragraph (1) in respect of a company relates only to a single branch of
the company, then, despite that paragraph, the declaration may be prepared and
signed by an employee of the company approved in respect of that branch by the
company, instead of by a director.
(3) A declaration under
paragraph (1) shall state whether, throughout the relevant accounting
period, the registered person to whom the declaration relates –
(a) has
complied with the requirements of the Law, and with the requirements of Orders
and Codes of Practice made or issued under the Law (not being a requirement the
Commission has waived) that apply to the registered person;
(b) has
maintained proper accounting records and adequate systems to enable the
registered person to comply with the requirements referred to in sub-paragraph (a);
and
(c) has
complied with the requirements of all relevant legislation and guidance to
counter money laundering and the financing of terrorism.
(4) If a registered person
to whom a declaration under paragraph (1) relates has failed to comply
with a requirement referred to in paragraph (3), the declaration
shall –
(a) contain
details of all material failures; and
(b) specify
any measures taken or to be taken by the registered person to ensure that the
failures are not repeated.
6 Directors’
report
(1) A registered person
that is a company or a partnership shall prepare, after the end of the relevant
accounting period, a report (a “directors’ report”) in
relation to the period.
(2) The directors’
report in relation to a registered person shall contain at least the following
information –
(a) a
list of the directors, if any, of the registered person or, if the registered
person is a partnership, a list of the partners;
(b) a
list of the directors, if any, of the registered person or, if the registered
person is a partnership, a list of the partners, who were appointed during the
relevant accounting period and the dates of their appointments;
(c) a
list of the directors, if any, of the registered person or, if the registered
person is a partnership, a list of the partners, who ceased to be directors
during the relevant accounting period and the dates on which they ceased to be
directors;
(d) a summary
of the activities of the registered person during the relevant accounting
period;
(e) the
name of the country or territory in which the registered person is incorporated
or established.
7 Registered
person to provide certain documents to auditor
(1) A registered person
shall, as soon as practicable after the end of a relevant accounting period,
provide the registered person’s auditor with –
(a) financial
statements;
(b) if
Article 6(1) applies to the registered person, the directors’
report; and
(c) the
declaration,
in respect of that period.
(2) 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 registered person’s records and documents
relating to the registered person’s relevant business; or
(b) other
information or an explanation the auditor considers necessary for the
performance of the auditor’s duties under this Order,
shall be guilty of an offence and liable to a fine.
(3) 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.
8 Auditor’s
reports
(1) The auditor shall
prepare –
(a) a
report in respect of the financial statements provided to the auditor under
Article 7 by a registered person;
(b) a
report in respect of the directors’ report, if any, provided to the
auditor under Article 7 by a registered person; and
(c) a
report in respect of the declaration provided to the auditor under Article 7
by a registered person.
(2) The auditor shall
provide to the registered person copies of any report prepared by the auditor
under paragraph (1).
(3) Unless the Commission
otherwise agrees, an auditor’s report shall be prepared in accordance
with the International Standards on Auditing (U.K. and Ireland) issued by the
Auditing Practices Board.
(4) Unless the Commission
otherwise agrees, the audit leading to an auditor’s report shall be
conducted in accordance with the International Standards on Auditing (U.K. and
Ireland) issued by the Auditing Practices Board.
(5) An auditor’s
report that relates to financial statements shall state whether the statements
have been prepared in accordance with this Order.
(6) An auditor’s
report that relates to a declaration provided to the auditor under Article 7
shall –
(a) contain
a statement that while conducting the audit for the purpose of preparing the
report under paragraph (1)(c) the auditor became aware of nothing that
could be taken to indicate that a statement in the declaration was incorrect;
or
(b) if
the auditor became aware of a matter that could be taken to indicate that a
statement in the declaration was incorrect, contain a statement as to the
matter and why the auditor is of the opinion that it may indicate that a
statement in the declaration was incorrect.
(7) An auditor’s
report shall be signed by the auditor.
9 Financial
statements to be provided to Commission
(1) A registered person
shall, after the end of a relevant accounting period, prepare financial
statements in relation to the registered person in respect of the period.
(2) Unless the Commission
otherwise agrees, the financial statements shall be prepared in accordance with
either –
(a) the
U.K. Accounting Standards issued by the U.K. Accounting Standards Board; or
(b) the
Accounting Standards issued by the International Accounting Standards Board.
(3) The financial
statements in relation to a registered person shall –
(a) be
signed by the registered person; or
(b) if
the registered person is a body corporate or a partnership, be signed by as
many directors or partners as are required, under the laws of the country or
territory in which the registered person is incorporated or established, to
sign financial statements for the registered person, but in any case not less
than one director or partner of the registered person.
(4) The financial
statements in relation to a registered person shall be provided to the
Commission –
(a) within
4 months of the end of the relevant accounting period; or
(b) within
the period (being not more than 8 months after the end of the relevant
accounting period) that the Commission may, in special circumstances, permit.
(5) The financial
statements in relation to a registered person 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.
(6) 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.
10 Consolidated
financial statements
(1) This paragraph applies
to a registered person if –
(a) the
registered person is a member of a group; and
(b) the
accounting standards in accordance with which, under Article 9(2), the
registered person shall prepare financial statements, allow consolidated
financial statements to be prepared in respect of the members of the group.
(2) A registered person to
whom paragraph (1) applies may apply to the Commission for an approval to
be granted under paragraph (4).
(3) Registered persons who
are members of the same group and who are persons to whom paragraph (1)
applies may jointly apply to the Commission for an approval to be granted under
paragraph (4).
(4) If an application is
made under paragraph (2) or (3) by a registered person or persons, the
Commission may grant, or refuse to grant, an approval to the person or persons.
(5) An approval granted
under paragraph (4) to a registered person may permit the person to
provide under Articles 7(1)(a) and 9(1) consolidated financial statements
of the group of which the registered person is a member, instead of financial
statements that relate only to the registered person.
(6) An approval may be
granted under paragraph (4) on the conditions specified by the Commission
on the approval.
(7) A registered person to
whom an approval has been granted under paragraph (4) may, if permitted to
do so under the approval, provide under Articles 7(1)(a) and 9(1)
consolidated financial statements of the group of which the registered person
is a member, instead of financial statements that relate only to the registered
person.
(8) If a registered person
is required under an approval granted under paragraph (4) to provide under
Articles 7(1)(a) and 9(1) consolidated financial statements of the group
of which the registered person is a member, the requirements of those Articles
shall only be taken to have been complied with if the consolidated financial
statements are provided to the Commission in accordance with the approval.
(9) A registered person to
whom an approval has been granted under paragraph (4) may apply to the
Commission to amend the approval.
(10) The Commission
may –
(a) of
its own motion, by notice in writing to a registered person; or
(b) if it
receives an application under paragraph (9) from a registered person, by
notice in writing to the registered person,
amend an approval granted to the registered person under paragraph (4).
11 Declarations
and reports to be provided to Commission at same time as financial statements
(1) A registered person
shall ensure that the financial statements provided to the Commission under
Article 9 by the registered person are accompanied by –
(a) a
declaration in relation to the relevant accounting period;
(b) the
directors’ report in relation to the relevant accounting period, if the
person is required by Article 6 to prepare such a report;
(c) any
auditor’s reports in respect of the financial statements,
directors’ report and declaration;
(d) any
report that –
(i) has been prepared
during, or in relation to, the relevant accounting period, by an auditor in
relation to the registered person or a person who conducts an audit for the
registered person,
(ii) addresses
a relevant matter, and
(iii) is
available to the registered person; and
(e) any
report that –
(i) has been
prepared, during, or in relation to, the relevant accounting period, by an
accountant or consultant in relation to the registered person,
(ii) addresses
a relevant matter, and
(iii) is
available to the registered person.
(2) In paragraphs (1)(d)
and (e) “relevant matter”, in respect of a registered person,
means –
(a) a
breakdown or weakness in the registered person’s internal control
procedures; and
(b) the
consequential recommendations for their improvement.
(3) A registered person who
is registered to carry on trust company business shall ensure that the
financial statements provided to the Commission under Article 9 by the
registered person are accompanied by a document setting out the Resource
Requirement Table, within the meaning of the Code of Practice issued under
Article 19 of the Law in relation to trust company business, that is prepared,
at the end of the relevant accounting period, in accordance with that Code of
Practice.
(4) A registered person who
is registered to carry on investment business shall ensure that the financial
statements provided to the Commission under Article 9 by the registered
person are accompanied by a document setting out the Resource Requirement
Table, within the meaning of the Code of Practice issued under Article 19
of the Law in relation to investment business, that is prepared, at the end of
the relevant accounting period, in accordance with that Code of Practice.
(5) A registered person who
is registered to carry on –
(a) both
trust company business and investment business; or
(b) trust
company business, or investment business, together with any other financial
service business,
shall ensure that the financial statements provided to the
Commission under Article 9 by the registered person are accompanied by a
document, prepared at the end of the relevant accounting period, containing the
requirements in relation to the resources of the registered person that are
specified by the Commission under paragraph (6).
(6) The Commission may, on
the application of a registered person who is registered to carry on trust
company business, or investment business, together with any other financial
service business, specify the requirements in relation to the resources of the
registered person that shall apply to the registered person under paragraph (5).
(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.
12 Consolidated
declarations
(1) This paragraph applies
to a registered person if –
(a) the
registered person is a member of a group, each member of which is registered
under the Law; and
(b) the
accounting standards in accordance with which, under Article 9(2), the
registered person shall prepare financial statements, allow consolidated
financial statements to be prepared in respect of the members of the group.
(2) A registered person to
whom paragraph (1) applies may apply to the Commission for an approval to
be granted under paragraph (4).
(3) Registered persons who
are members of the same group and who are persons to whom paragraph (1)
applies may jointly apply to the Commission for an approval to be granted under
paragraph (4).
(4) If an application is
made under paragraph (2) or (3) by a registered person or persons, the
Commission may grant, or refuse to grant, an approval to the person or persons.
(5) An approval granted
under paragraph (4) to a registered person may permit the person to
provide under Articles 7(1)(c) and 11(1)(a) a single consolidated
declaration, relating to all persons who are registered under the Law and who
are members of the group of which the registered person is a member, instead of
a declaration that relates only to the registered person.
(6) An approval may be
granted under paragraph (4) on the conditions specified by the Commission
on the approval.
(7) A registered person to
whom an approval has been granted under paragraph (4) may, if permitted to
do so under the approval, provide under Articles 7(1)(c) and 11(1)(a) a
single consolidated declaration, instead of a declaration that relates only to
the registered person.
(8) If a registered person
is required under an approval granted under paragraph (4) to provide under
Articles 7(1)(c) and 11(1)(a) a single consolidated declaration, the
requirements of those Articles shall only be taken to have been complied with
if the single consolidated declaration is provided to the Commission in
accordance with the approval.
(9) A registered person to
whom an approval has been granted under paragraph (4) may apply to the
Commission to amend the approval.
(10) The Commission
may –
(a) of
its own motion, by notice in writing to a registered person; or
(b) if it
receives an application under paragraph (9) from a registered person, by
notice in writing to the registered person,
amend an approval granted to the registered person under paragraph (4).
13 Consolidated
directors’ and auditor’s reports
(1) If a registered person
who is a member of a group has, in accordance with an approval granted under
Article 10(4), provided consolidated financial statements under Article 7(1)(a),
the directors’ report required under Article 7(1)(b) and 11(1)(b) to
be provided in relation to the registered person shall relate to all members of
the group of which the registered person is a member.
(2) The requirements of
Articles 7(1)(b) and 11(1)(b) shall not be satisfied by the provision of a
directors’ report that relates to more than one registered person, except
if the report is required be provided under paragraph (1).
(3) If members of a group
acting in accordance with an approval granted under Article 10(4) have
provided their auditor with consolidated financial statements under Article 7(1)(a),
the report prepared under Article 8(1)(a) or (b) shall relate to the
consolidated financial statements.
(4) If members of a group
acting in accordance with an approval granted under Article 11(4) have
provided their auditor with a single consolidated declaration under Article 7(1)(c),
the report prepared under Article 8(1)(c) shall relate to the single
consolidated declaration.
(5) The requirements of
Article 8(1)(a), (b) or (c) shall not be satisfied by the provision of a
report that relates to more than one registered person, except if the report is
required be provided under paragraph (3) or (4).
14 Exemptions
(1) A registered person may
apply to the Commission to be exempted from compliance with all or any part of
Articles 2 to 13.
(2) The Commission may, on
the application of a registered person, exempt the person from compliance with
all or any part of Articles 2 to 13.
(3) The Commission shall
not grant an exemption under paragraph (2) unless it is of the opinion
that by virtue of the relevant business the registered person carries on, or
intends to carry on, no customer or client of the person is likely to be
prejudiced if the exemption is granted.
(4) An exemption may be
granted under paragraph (2) subject to the conditions specified on the
exemption.
(5) An exemption granted
under paragraph (2) shall be of no effect if the registered person fails
to comply with any condition imposed under paragraph (4).
(6) A registered person to
whom an exemption has been granted under paragraph (2) may apply to the
Commission to amend the exemption.
(7) The Commission
may –
(a) of
its own motion, by notice in writing to a registered person; or
(b) if it
receives an application under paragraph (6) from a registered person, by
notice in writing to the registered person,
amend an exemption granted to the registered person under paragraph (2).
15 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 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 –
(a) that
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; or
(b) that
as a result of a breach of a requirement of a Code of Practice (not being a
requirement the Commission has waived) or of a legal requirement, or of a
breach of internal controls or procedures, or both, a customer or 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 other person nominated or approved by the Commission in
respect of the person in accordance with Article 8(5) or 32(4) of the
Law.
16 Transitional
provisions
(1) If, immediately before
the commencement day, there was, in relation to a registered person, an
accounting period, details of which were provided to the Commission in
accordance with Article 2 of the Trust Company Business Order, the period
shall be taken to be the accounting period approved for the person under
Article 2 of this Order.
(2) A period that was,
immediately before the commencement day, an accounting reference period in
relation to a registered person in accordance with the Investment Business
Order, shall be taken to be the accounting period approved for the person under
Article 2 of this Order.
(3) A person who was,
immediately before the commencement day, a person approved under Article 4
of the Trust Company Business Order to be the auditor in relation to a
registered person shall be taken to have been approved as an auditor under
Article 3 of this Order in relation to the registered person.
(4) A person who was,
immediately before the commencement day, the auditor, for the purposes of
Article 6 of the Investment Business Order, in relation to a registered
person, shall be taken to have been approved as an auditor under Article 3
of this Order in relation to the registered person.
(5) If a registered person
was, immediately before the commencement day, a person exempted under the
repealed Orders from a requirement of one of those Orders that corresponds to a
requirement of this Order, the exemption shall continue in force, on the same
terms, in relation to the person as if it were an exemption from the
requirement in this Order granted under Article 14.
(6) If a registered person
was, immediately before the commencement day, permitted to provide to the
Commission consolidated financial statements under any of the repealed Orders
the registered person shall be taken to have been granted an approval under
Article 10 on the same terms as the permission.
(7) If a registered person
was, immediately before the commencement day, permitted to provide to the Commission
a single consolidated declaration under any of the repealed Orders, the
registered person shall be taken to have been granted an approval under Article 12
on the same terms as the permission.
(8) Nothing in the Article
shall be taken to prevent the amendment, under another Article of this Order,
of an approval or exemption that shall be taken, by virtue of this Article, to
have been granted under that other Article.
(9) In this
Article –
“commencement day” means 31st December 2007;
“Investment Business Order” means the Financial Services
(Investment Business (Accounts, Audits and Reports)) (Jersey) Order 2001,
as in force immediately before the commencement day;
“repealed Orders” means the Investment Business Order and
the Trust Company Business Order;
“Trust Company Business Order” means the Financial
Services (Trust Company Business (Accounts, Audits and Reports)) (Jersey)
Order 2000, as in force immediately before the commencement day.
17 Citation
This Order may be cited as the Financial Services (Trust Company and
Investment Business (Accounts, Audits and Reports)) (Jersey) Order 2007.