GUIDANCE NOTE: NATURAL PERSONS CARRYING ON A SINGLE CLASS OF TRUST COMPANY BUSINESS

Transcription

1 GUIDANCE NOTE: NATURAL PERSONS CARRYING ON A SINGLE CLASS OF TRUST COMPANY BUSINESS DOCUMENT OVERVIEW 1 Introduction Definitions Application Stage All Classes Class G - Director... 3 Span of Control... 3 Financial Resources... 3 Professional Indemnity Insurance ( PII )... 3 Competence... 3 Control of Customer Assets... 3 Exemptions from the Financial Services (Trust Company and Investment Business (Accounts, Audit and Reports)) (Jersey) Order 2007 (the TCB IB Accounts Order ) Class I - Company Secretary Class M - Nominee Shareholder Class L - Trustee Ongoing requirements of the registered person Introduction 1.1 Where an individual applies for a single class of business, which by its nature may be provided by a natural person - e.g. acting as company secretary, director or nominee shareholder - it is clear that a number of the requirements that a corporate entity must abide by would not apply to a natural person. 1.2 Accordingly, the purpose of this guidance note is to offer clarity to those individuals as to the response their application is likely to receive from the Jersey Financial Services Commission (the Commission ) and to set out what the Commission would expect on an ongoing basis once an application has been approved. Issued: February 2009 Page 1 of 5

2 2 Definitions 2.1 Applicant means a person who intends to carry on financial service business and who has made an application to the Commission to be registered under Article 9 of the Financial Services (Jersey) Law 1998 (the FS(J)L ). 2.2 Registered person means a person registered by the Commission under Article 9 of the FS(J)L. For the purposes of this guidance note the terms natural person and individual will have the same meaning as registered person. 3 Application Stage 3.1 All Classes Article 9 of the FS(J)L places responsibilities on the Commission to be satisfied with regard to the integrity, competence, financial standing, structure and organisation of an applicant. This degree of satisfaction must be met in all cases before the Commission can register a person under the FS(J)L Prior to the submission of the necessary documentation, the Commission would be happy to meet with the applicant to discuss their plans, the application process and the ongoing requirements of a registered person The applicant should submit the following to the Commission: a completed application form for trust company business; a cheque payable to the Jersey Financial Services Commission in respect of the application fee and the registration fee 1 ; and a business plan to include details of how the applicant proposes to conduct trust company business, potential appointments and any other additional information relevant to the application If the applicant has not already done so, they should complete and submit a personal questionnaire with their application form. If the applicant is in any doubt as to whether a personal questionnaire should be completed they should check with the Commission The applicant should also contact the Population Office before they submit their application to the Commission in order to ascertain if Regulations of Undertakings approval is required Paragraphs 3.2 to 3.5 set out the areas the Commission will take into account when considering the application. The areas vary dependent upon the class of business for which an application has been made. 1 Fees relating to trust company business registration are detailed in the trust company business fees notice which can be found on the Commission s Website: Page 2 of 5 Issued: February 2009

3 3.2 Class G - Director Span of Control One of the objectives of the Commission is to be satisfied that the reputation of Jersey is protected. The Commission would therefore want to ensure that should a natural person become incapacitated or die or that in the event of failure of one sort or another, customers' interests are not prejudiced. Accordingly, the Commission would normally include a condition to the registration stating that the registered person may not act as a sole director without the prior consent of the Commission. Financial Resources The Commission would expect to see a statement in the application form that an applicant has personal unencumbered net assets amounting to at least 25,000. The Commission would also expect proof of the 25,000 of assets. e.g. a bank statement. The applicant should also be able to demonstrate that they have a track record which shows they have been able to meet their liabilities as they have fallen due e.g. there to be no detrimental financial information on the applicant by way of County Court Judgments or Petty Debt judgments, other than with explanation the Commission considers reasonable in the light of the circumstances. Professional Indemnity Insurance ( PII ) The Commission would expect the applicant to make a statement in their application explaining how the financial implications of their personal liability to the company/creditors/customers is to be met, e.g. by their own PII cover, company policy or policy of any fully registered trust company business with which they may have entered into an arrangement Where such a director meets PII needs personally, the Commission would accept a level of PII cover calculated on the same basis as the Codes of Practice for Trust Company Business ( the TCB Codes ), but with a minimum cover reduced to 1 million. Competence The Commission would expect a person registering in a personal capacity as a director to at least meet Category A Trust Company Business Employee standards of qualifications and years of experience as set out in the TCB Codes Additionally, the Commission would expect such a person to meet the Continuing Professional Development requirements of the TCB Codes. Control of Customer Assets The Commission would include a condition to the registration restricting the registered person from controlling customer assets in a sole capacity without the prior consent of the Commission. Issued: February 2009 Page 3 of 5

4 Exemptions from the Financial Services (Trust Company and Investment Business (Accounts, Audit and Reports)) (Jersey) Order 2007 (the TCB IB Accounts Order ) The Commission accepts that an individual may not wish to have an audit undertaken and therefore would usually accept a request from the applicant to waive the TCB IB Accounts Order requirement to: (a) appoint an Auditor; and (b) to submit audited financial statements All other sections of the TCB IB Accounts Order will apply unless the applicant agrees further exemptions with the Commission The Commission will require that the registered person should submit an annual Information Update Questionnaire for natural persons carrying on a single class of Trust Company Business ( Information Update Questionnaire ) that should include details of the registered person s income as it relates to their regulated activity and a declaration, which should be signed by the registered person. 3.3 Class I - Company Secretary The requirements set out under 3.2 (Class G - Director) with regard to Financial Resources, PII, Competence, Control of Customer Assets and Exemptions to the TCB IB Accounts Order apply for those individuals who may wish to register as company secretaries In order to ensure that the customers interests are not prejudiced in the event of the unforeseen resignation or death of a company secretary, the applicant should include in their application form a statement that they undertake to act only where an alternate secretary has been named. 3.4 Class M - Nominee Shareholder Individual persons shall not generally be granted authorisation to act as a nominee shareholder other than in exceptional circumstances. Exceptional circumstances might include the granting of a registration limited by a condition to extend to existing arrangements only, or under other circumstances where the Commission's concerns regarding security of ultimate beneficial owners' interests could be met In such exceptional circumstances, the general principles set out in 3.2 for Financial Resources, PII, Competence and Audit, Exemptions to the TCB IB Accounts Order and Control of Customer Assets would apply. 3.5 Class L - Trustee The Commission would expect such an application to include a declaration that the applicant shall not undertake to act as trustee unless there is provision for a co-trustee to act with them The Commission would take much comfort from an application that stated that the administration of the trusts for which the single applicant trustee acts, is carried out by a fully registered, six eyes controlled trust company business. Page 4 of 5 Issued: February 2009

5 4 Ongoing requirements of the registered person 4.1 The registered person must complete an Information Update Questionnaire each year, which can be found on the Commission s website 2, under the guide to applications and fees section. 4.2 The Information Update Questionnaire should be submitted to the Commission within four months after the registered person s financial year end. 4.3 The Information Update Questionnaire includes a template declaration, as required by Article 5(1) of the TCB IB Accounts Order. The declaration relates to compliance with the requirements of the FS(J)L, the Orders or Codes of Practice issued under the FS(J)L and all legislation and guidance to counter money laundering and the financing of terrorism. The registered person must sign the declaration and list any exceptions to the confirmations required. 2 Issued: February 2009 Page 5 of 5