INVESTMENT BUSINESS

Frequently Asked Questions (FAQ)

Q: If I am not sure if an investment business-related activity needs authorisation from the Commission can I ask you for advice?

Investment business is regulated under the provisions of the Financial Services (Jersey) Law 1998. Commission staff will be happy to provide general explanations of what activities that law covers. However, Commission staff cannot provide legal advice in respect of specific circumstances and if you are in any doubt as to the position you should seek advice from a lawyer qualified in Jersey law.
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Q: Can you tell me what qualifies for Continuing Professional Development (“CPD”)?

The type of activity that may qualify for CPD purposes is set out in section 3.5 of the Codes of Practice for Investment Business.

However, given that CPD needs to be tailored to the specific needs of each employee, the Codes put the onus on the management of the ‘registered person’ (ie, the licence holder) to determine what specific activity is suitable to be counted as CPD for any specific employee taking into account the employee’s job description, current duties, and future development needs. As a consequence, the Commission cannot endorse specific courses as qualifying for CPD purposes.
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Q: How can I find out if an investment business is regulated by you?

The Commission’s website lists all regulated investment businesses. On the home page, click on the “Regulated Entities” box or click here to go direct to the relevant page.
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Q: What can I do if I have a complaint against an investment business?

The Commission has issued a guidance note on this subject. The guidance note can be found in the ‘Investors’ Corner’ part of this website or can be viewed by clicking here.
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Q: What should I do if I think I was mis-sold an endowment policy?

The majority of cases of alleged mis-selling of endowment policies that the Commission has been made aware of occurred before the introduction of the Financial Services (Jersey) Law 1998. That 1998 Law regulates firms that provide financial advice. Thus the giving of investment advice (including in relation to endowment policies) was not a regulated activity prior to the coming into effect of the 1998 Law. This means that the Commission cannot take action against Jersey-based firms for alleged cases of mis-selling that occurred before that date.

However, under the Codes of Practice applicable to financial advisers they are expected to fully investigate complaints that are made against them, even if the issue relates to something that happened before the 1998 Law. If you think that you were incorrectly advised to buy an endowment policy you should lodge a formal complaint with the firm that advised you. The Commission expects firms to take seriously complaints of mis-selling that are made against them. If individual complaints are substantiated, the Commission would expect firms to consider whether, as a matter of good business practice, they should offer compensation.

Under the Codes of Practice on the giving of investment advice, firms should establish the customer's needs and risk appetite and explain why a particular investment is suitable. All this should be properly documented. Customers can play their part by ensuring that they explain their financial position and needs to the advisers they consult, and obtain adequate written explanation of why particular products are recommended for them and what the risks involved are. (Further information on using financial advisers can be found in the Commission’s guidance note ‘Choosing a financial adviser’.)
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Q: How do I apply for an investment business licence and what information is required?

The Commission welcomes applications from businesses wishing to operate in Jersey. The first step should be to contact the Deputy Director of Securities or, if he is unavailable, the Director of Securities, to arrange a meeting and explain the type of activity that is being contemplated. The Director will be pleased to introduce division staff that would be involved in handling your application and, if successful, working with you once you obtained registration. The Director will also be pleased to explain both the licensing regime and the Commission’s approach to supervision of this industry sector.

Although Commission staff will be pleased to explain the regulatory regime, they cannot provide legal advice. Most potential applicants seek legal advice at the time of approaching the Commission, or at least prior to making formal application. If the applicant is a business new to operating in Jersey, the legal adviser would also be able to offer advice regarding the Island’s housing and labour regulations.

The Commission publishes various documents which you may like to read, or Commission staff will be pleased to explain them to you. Key policies include the licensing policy, the policy explaining our views on outsourcing certain activities outside of the Island, the Codes of Practice which set out sound principles for the conduct of investment business, and the Island’s Anti-Money Laundering Guidance Notes. Most applicants find these policies clear and practical, reflecting existing good commercial and regulatory practice.

Once you are comfortable with the regime and have concluded that you want to progress a formal application, the Commission would be pleased to receive:-

(a) a completed Application Form, including the application fee;

(b) a comprehensive Business Plan setting out how you anticipate you will market your business, how you plan for it to develop, how you will manage it and how you will manage its risks;

(c) completed Personal Questionnaire for each of the principal persons including consent to seek a Police check.

The Commission will acknowledge receipt of your application and begin assessing the application. This assessment includes looking at the fit and proper status of the applicants, the principals behind the business, and those principals who will be managing it. The Commission will take up regulatory references.

The Commission will keep you informed of the progress of your case and will revert to you for missing information or clarification if we find anything unclear. We aim to approve applications, or provide the reasons why we are unable to approve an application, within two weeks of receiving responses to our final queries. Overall, the normal time to progress a successful application is in the region of six weeks.
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