Press Release - 9 March 2004

The Jersey Financial Services Commission has today, 9 March 2004, issued its quarterly report for the period 1 October 2003 to 31 December 2003.

Headlines:

• Bank deposits increased by 7.1% to £149.3 billion during 2003, despite a fall in the last quarter of the year.
• The total value of funds under management increased by 6.9% to £31.1 billion during 2003.
• The value of collective investment funds managed in the Island stood at £98.7 billion as at 31 December 2003, under our new method of collating the statistics. For further details please see comments below.
  

Bank Deposits

Jersey bank deposits fell by 4.3% during the last quarter of 2003 to £149.3 billion. However there was an increase of £9.9 billion (7.1%) during 2003 as whole. (see Appendix A).

Of the total deposit base at the end of 2003, £101 billion related to customer deposits and £48 billion to inter bank deposits.

Approximately 68% of bank deposits are held in currencies other than sterling. During 2003, there was a sharp increase (39% in US dollar terms) in the underlying value of US dollar balances, though this was partly offset by a decline in balances denominated in the Euro.

The number of banking licences in issue as at 31 December 2003 was 55, the same as in the previous quarter.

Figure 1

BANK DEPOSITS
(£ MILLION)AS AT 31 DECEMBER FOR EACH OF THE PAST FOUR YEARS

Funds

The Collective Investment Funds (Jersey) Law 1998 (The "Law")
The Control of Borrowing (Jersey) Order 1958 (The "Order")

During the last quarter of 2003 we changed our methodology for collecting and collating the fund statistics.

1. Old method

Under this method we collated statistics on all funds in respect of which one or more permits under the Law were in issue (such funds are termed "CIF Funds") This method therefore reflected the volume of public funds for which management, administration, trusteeship, custody of assets, investment advice/management, distribution or other similar functions were performed in or from within the Island. The figures do not include funds for which no permit was issued under the Law but instead a consent was granted under the Order (such funds are termed"COBO Funds").

The value of CIF Funds rose to £122.7 billion at the end of December 2003, an increase of 13.4% during the quarter and 16.7% during 2003 as a whole. The increase in the quarter seems to be attributable to a rise in stock markets. (see Appendix C).

2. New method

We now exclude from the figures, the collective investment funds for which a permit was issued under the Law for the function of distributor or similar minor function. Such funds are regarded as non-Jersey funds. The exclusion of these funds has reduced the total net asset value of funds by £47.8 billion. However, for the first time, the Island has collected statistics on the private schemes administered in the Island, which, although not requiring a permit under the Law, require consent under the Order. The inclusion of these COBO Funds has increased the total by £23.7 billion, thus arriving at a total figure of £98.7 billion as at 31 December 2003. (See Appendices D & E).

The lack of previous data for this segment of the industry makes it impossible for us to comment on trends. However it is interesting to note the marked increase in Specialist Funds under the new method (i.e. £25.6 billion of the £98.7 billion) ( See Appendix E). This compares to approximately £15 billion of the £122.7 billion under the old method and demonstrates the importance of this sector of the funds industry in Jersey. (Hedge Funds make up £13 billion of this £25 billion).

In future we will only provide data under the new method.

Figure 2

COLLECTIVE INVESTMENT FUNDS
(£ MILLION) AS AT 31 DECEMBER FOR EACH OF THE PAST FOUR YEARS

Company Incorporations

The total number of incorporations during the last quarter was 631 which shows an increase of 30 % over the corresponding period for last year. This trend has continued from the last quarter.

The number of 'fast track' incorporations for this quarter was 350 and the number of normal company incorporations for this quarter was 281. (see Notes to Editors.)

Against their self-imposed target of 95% the Registry recorded a 95 % rate for normal two-day incorporations and a 99% rate for fast track companies for the quarter. (See Notes to Editors.)

Figure 3 (See also appendix F) illustrates the number of new company incorporations throughout the past four years.

Figure 3

TOTAL NEW COMPANY INCORPORATIONS DURING THE YEAR FOR THE PAST FOUR YEARS

Investment Business

The total funds under investment management (class B of the Financial Services (Jersey) Law 1998) stood at £31.1 billion as at 31 December 2003, an increase during the year of 6.9%.

As at 31 December 2003 the total number of clients of investment managers was 20,710 about the same as at the end of the previous quarter.

Insurance Business

The annual renewal date for insurance business permits is 1 October, so the figures at 31 December 2003 are affected by those companies that did not renew their permits.

During the year 15 new Category A permits were issued and 16 category A permits were not renewed.

With regard to Category B permits, 6 were not renewed. These were all SPVs that had a pre-defined business life of three or four years. No new Category B permits were issued during the year.

Therefore as at 31 December 2003 there were 155 Category A permits in issue, and 13 Category B permits. (See Appendix G).

Figure 4

ALL INSURANCE LICENCES AS AT 31 DECEMBER FOR EACH OF THE PAST FOUR YEARS

Conclusion

David Carse, Director General of the Commission, commenting on the quarterly statistics said today, " The revised methodology for the collation of the fund statistics is considered to be a more accurate reflection of the fund business activity in the Island. On the old basis the value of funds increased during 2003, as did the value of assets under management. In both cases, this reflected the improvement in world financial markets during 2003. Whilst bank deposits have shown a fall over the last quarter there was a significant increase during 2003".

Notes to Editors:

1. Normal company incorporations are completed within two working days whilst fast track incorporations are completed within two hours.

2. Published timescales were introduced the week commencing 1 January 2000, and the Registry has worked to those targets throughout the last year.

Appendix A

Annual growth in Banks and Bank Deposits to date. £ Millions

Appendix B

ANALYSIS OF DEPOSITS - DECEMBER 2003

Appendix C

COLLECTIVE INVESTMENT FUNDS (JERSEY) LAW 1988 ("THE LAW")
CONTROL OF BORROWING (JERSEY) ORDER 1958 (THE "ORDER")

1. SUMMARY OF STATISTICAL SURVEY OF FUNDS ADMINISTERED IN JERSEY UP TO 31 DECEMBER 2003

The Survey was conducted in relation to all funds in respect of which one or more permits under the Law was in issue at that date (such funds are termed "CIF Funds"). The Survey therefore reflects the volume of public funds for which management, administration, trusteeship, custody of assets, investment advice/management, distribution or other similar function(s) was performed in or from within the Island. The figures do not include Funds for which no permit was issued under the Law but instead a consent was granted under the Order (such funds are termed "COBO Funds").

2. SUMMARY OF STATISTICAL SURVEY OF FUNDS ADMINISTERED IN JERSEY AS AT 31 DECEMBER 2003

From 1st October 2003 the survey includes COBO Funds as described above but excludes those funds for which a permit was issued under the Law solely for the function of distributor or similar minor function and those COBO Funds with a minor role.

Appendix D

COLLECTIVE INVESTMENT FUNDS (JERSEY) LAW 1998
CONTROL OF BORROWING (JERSEY) ORDER 1958

SUMMARY OF STATISTICAL SURVEY OF FUNDS ADMINISTERED IN JERSEY AS AT 31 DECEMBER 2003

Analysis of CIFs and COBO Funds

Appendix E

COLLECTIVE INVESTMENT FUNDS (JERSEY) LAW 1998 ('THE LAW')

CONTROL OF BORROWING (JERSEY) ORDER 1958 (THE "ORDER")
SUMMARY OF STATISTICAL SURVEY OF FUNDS ADMINISTERED IN JERSEY AS AT 31 DECEMBER 2003

Analysis by Investment Policy Code

Appendix F

Appendix G

For further information:

David Carse
Director General
Jersey Financial Services Commission

Telephone: +44(0) 1534 822011
Facsimile: +44(0) 1534 822001
Email: d.carse@jerseyfsc.org

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