Since the 1980s, Jersey has developed a very strong reputation in the global capital markets as a jurisdiction in which to arrange international structured finance transactions.
Many Jersey companies, or Jersey branches of foreign incorporated companies, participate in such transactions, which commonly include agreements providing for set-off, close-out netting (the automatic termination of the transaction and the payment of a single amount by one party to another) and contractual subordination. They also commonly contain agreements not to take action to have another party to the transaction declared insolvent (a so-called ‘non-petition agreement’). The agreements typically allow a number of ancillary mechanisms (for example, to value obligations) and arrangements designed to implement the close-out netting.
