The Jersey Financial Services Commission (the "Commission") is the Island’s financial services regulator. It is responsible for regulating and supervising businesses involved in banking, funds, investment, insurance, money service and trust company business – these are “regulated” activities.
However, not all financial services activity is regulated in Jersey. Some types of activity are not regulated (e.g. advising purely on loans or mortgages) and some types of activity which are generally regulated may have exceptions (e.g. investment activity is generally regulated but, investments in stamps, fine wines, antiques and other so-called “collectible” items are not regulated). It may also be that a business which is regulated for certain activities is not regulated when it carries out others.
The guidance below briefly explains how you can understand when a business is regulated and how this might help to protect you.
Which businesses are regulated by the Commission?
A business wishing to undertake regulated activity in Jersey first needs to be authorised by the Commission. The Commission will only authorise a business if it is satisfied that it meets certain fit and proper criteria and will operate within the high standards that the Commission expects. A business that has been authorised to carry out regulated activity is a regulated business
The Commission will then continue to supervise the regulated business to ensure that these standards are maintained and it may take action against regulated businesses that fail to meet the standards required of them.
If you deal with a regulated business this means that important checks have been carried out by the Commission to try and ensure that it is legitimate and will operate its business properly. These checks cannot guarantee that everything will run smoothly. However, if you later have problems with the business, you can make a written complaint to the Commission. If the Commission finds that the business has not behaved properly it may be able to take action against the business. However, this action would not extend to requiring the business to pay compensation to consumers as the Commission does not have the powers of an ombudsman.
Are “registered” companies regulated by the Commission?
All companies formed in Jersey must be “registered” with the Companies Registry. The Companies Registry maintains this register of Jersey companies in the same building as the Commission, but companies listed in the register are not automatically regulated by the Commission. Companies are only regulated by the Commission if they are carrying out regulated activities, as explained above. The Companies Registry carries out checks on the proposed owner(s) and activity of companies seeking registration. Registered companies are required to comply with certain legal requirements and failure to do so does, in some cases, attract a penalty. However, the Commission is not required to apply the fit and proper criteria applicable for regulated entities. As well as companies, the Companies Registry also carries out its checks upon some other types of businesses, (e.g. limited partnerships). Further information about the Companies Registry can be found here
Are businesses registered and supervised by the Commission for anti-money laundering purposes regulated by the Commission?
There are certain types of business which the Commission supervises, to a limited extent, in order to protect against a risk of money laundering and terrorist financing. However, the Commission does not authorise these businesses and it does not supervise them to ensure that they operate their core business in a fit and proper manner. It only registers and supervises them in order to try and prevent money laundering.
The Commission does not check whether these businesses operate their core business properly and it does not have powers to take action against such businesses (unless there are issues relating to money laundering or terrorist financing). Examples of such businesses include lenders, accountants and estate agents.
What if I am not sure if a business is regulated by the Commission?
You can check if businesses you are dealing with are regulated by going to the Regulated Entity Section of the Commission’s website
. This provides a list of regulated businesses.
Unfortunately, fraudsters sometimes illegitimately use the identity of a business that is regulated. To try and protect yourself from this risk, you can find warnings (public statements) about possible scams and information about how to recognise some common types of scams by looking on the Useful Information
If you have doubts about the legitimacy of a particular business, you should stop dealing with it and report it to the Commission or anonymously through the Commission’s whistleblowing hotline
+44 (0)1534 887557.
If businesses are regulated does that mean that they are “safe”?
The Commission tries to ensure that regulated businesses take reasonable measures to protect the interests of consumers. However, as a financial consumer, you need to recognise that all investments involve risk and there is always a possibility that you might lose money on your investments.
A good financial adviser may help you choose financial products that are most suitable to your circumstances. The Investments
page also provides further details about the types of things consumers should think about when they are thinking of investing their money.
Remember! The Commission will try and stop regulated businesses from treating consumers dishonestly or unfairly, but you must always understand whether or not the particular products or services a business is offering are suitable for your individual needs.
How can consumers take steps to protect themselves?
It is often tempting not to read the “boring” paperwork. This is a big mistake! The paperwork often contains crucial information (such as warnings about key risks associated with an investment) which the Commission wants to make sure that you understand before you buy a financial product or service.
You must always make sure you read and understand the documents which describe what you are buying. Never feel embarrassed or uncomfortable about asking questions or seeking further advice if anything is unclear and never be rushed into signing a contract! Unscrupulous salespeople may sometimes try to pressure you into making a hasty decision.