The island of Jersey is likely to be first to the post with comprehensive trust company regulation, reports Simon Gould
The proposed regulation of trust company business in Jersey passed a further hurdle this month when the States of Jersey, the island’s government, approved the new law. The legislation will now go to the Privy Council for approval and is likely to come into effect before the end of the year. The law is unique to Jersey, and jurisdictions elsewhere will be watching its introduction with more than just a passing interest.It is generally agreed that these new regulations will make the island’s trust industry one of the best regulated of any finance centre in the world. Jersey will be able to use the new legislation as further evidence of its commitment to the highest possible standards of regulation.Discussion about the legislation had been under way between the industry and its regulators for years, but the Edwards Review of November 1998 (the Home Office report on the financial services industries of the British Crown dependencies) encouraged the Jersey Financial Services Commission to promote its drafting.The draft law has had various names, but following a decision to adopt the regulation under the Investment Business (Jersey) Law 1998, the new trust company business regime is now to be established by means of an extension or amendment of that law. The amended law, which will provide for regulation of both investment and trust company business, will become the Financial Services (Jersey) Law 1998. Although this means the Jersey Financial Services Commission will have broadly similar powers in relation to the new trust company regime as they currently do in relation to investment business, it is not intended that the two should overlap. Thus, the existing provisions in relation to investment business will remain virtually unaffected.The new regulatory regime will apply to “trust company business”, which is defined at some length, but includes businesses that provide company administration, trustee or fiduciary services, and also act as or provide:*a company or partnership formation agent;*a director or alternate director;*a partner;*a secretary or alternate, assistant or deputy secretary;*a registered office or business address;*an accommodation, correspondence or administrative address;*a trustee of an express trust;*a shareholder or unit holder as nominee for another.
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