Press Release - 7 December 2004

The Jersey Financial Services Commission has today, 7 December 2004, issued its quarterly report for the period 1 July 2004 to 30 September 2004.

Headlines:

Bank deposits increased by 0.97% during the quarter to £159.17 billion.

The number of collective investment funds and COBO funds rose sharply to 769 during the quarter, albeit this will take time to be reflected in the value of the funds (£96.9 billion at end of September 2004).

The total value of funds under management (Class B of the Financial Services (Jersey) Law 1998) stood at £35.2 billion as at 30 September 2004, an increase of 16.5% over the same period last year.

The growth in company incorporations continued during the quarter, with a 14% increase over the same period last year.

Bank Deposits

Jersey bank deposits increased by 0.97% (£1.53 billion) during the quarter to £159.17 billion (see Appendix A).

31.9% of bank deposits are held in sterling and 68.1% are held in currencies other than sterling (see Appendix B).

During the quarter, the number of banking licences increased from 51 to 55. This was the result of four licences being issued to Cayman-based banks which invoked disaster recovery plans following the impact of Hurricane Ivan. The banks’ disaster recovery plans require the temporary operation of the banks from Jersey. Since 30 September 2004, one of the banks has returned its licence as it has resumed operations in the Cayman Island. The other three banks continue to operate temporarily from Jersey.

Figure 1

BANK DEPOSITS
(£ MILLION) AS AT 30 SEPTEMBER 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”)

For the quarter ended 30 September 2004, the total number of funds, and separate pools reached new record levels (769 and 2208 respectively). The value of funds under management has fallen however by £1.34 billion. This appears to reflect the fact that a number of alternative investment funds were being wound down during the quarter prior to closing. Other similar fund products have been granted permits under the Law during the quarter but have yet to be launched. The net effect has been a small drop in this figure for the quarter.

Appendices C, D and E provide more analysis of fund statistics.

Company incorporations

The total number of incorporations during the September quarter was 629, an increase of 14% over the corresponding quarter in 2003. This continued the trend seen in the previous three quarters. The increase was primarily due to changes in UK legislation relating to stamp duty which came into force during the year, and business activity in the Island.

The number of ‘fast track’ incorporations for the quarter was 262 and the number of normal company incorporations was 367. (See Notes to Editors.)

For the first nine months of 2004, against their self-imposed target of 95%, the Registry recorded a 99.25% rate for normal two-day incorporations and a 97.8% rate for fast track incorporations. (See Notes to Editors.)

Figure 2 illustrates the number of new company incorporations in the first nine months of the past four years. (See also Appendix F.)

Figure 2

TOTAL NEW COMPANY INCORPORATIONS IN THE FIRST NINE MONTHS OF THE PAST FOUR YEARS

Investment Business

Total funds under management (Class B of the Financial Services (Jersey) Law 1998) stood at £35.2 billion as at 30 September 2004.

Due to a reporting error by one institution the previously published June 2004 figure was overstated by £2.1 billion. The corrected figure for funds under management as at 30 June 2004 is £34.5 billion.

There has therefore been an increase in funds under management of £0.7 billion (2%) in the quarter ended 30 September 2004.

As at 30 September 2004, the total number of clients of investment managers was 20,297.

Insurance Business

All insurance business licences came up for annual renewal at 30 September 2004.

Seven Category A licence holders and three Category B licence holders decided not to renew their licences. In the main, this was because a licence was no longer needed because of consolidation in the Industry or the licence holder took a strategic decision to close to new business.

During the quarter three new Category A licences were issued.

The total number of insurance licences at 30 September 2004 therefore stood at 164, of which 152 were Category A and 12 Category B (see Appendix G).

Figure 3

ALL INSURANCE LICENCES AS AT 30 SEPTEMBER FOR EACH OF THE PAST
FOUR YEARS

Conclusion

David Carse, Director General of the Commission, commenting on the quarterly statistics said today, ”The main feature of the quarter was the very sharp increase in the number of funds, which is encouraging for the development of the industry in Jersey. Bank deposits continued their steady rise and the volumes of investment business and corporate activity remain well above last year’s levels.”

For further information:

David Carse
Director General
Jersey Financial Services Commission

Telephone: +44(0) 1534 822011
Facsimile: +44(0) 1534 822001
Email: to Mr Carse's PA: l.johns@jerseyfsc.org

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 - SEPTEMBER 2004

Appendix C

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

SUMMARY OF STATISTICAL SURVEY OF FUNDS SERVICED IN JERSEY AS AT 30 SEPTEMBER 2004

From the 1 October 2003 we have excluded 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. However, we now collect statistics on the private schemes administered in the Island, which, although not requiring a permit under the Law, require consent under the Order (such funds are termed "COBO funds"). Funds regulated under the Law are referred to herein as “CIFs”.

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

SUMMARY OF STATISTICAL SURVEY OF FUNDS SERVICED IN JERSEY AS AT 30 SEPTEMBER 2004

ANALYSIS OF CIFS AND COBO FUNDS

Appendix D

Analysis by Investment Policy Code

Appendix E

COLLECTIVE INVESTMENT FUNDS (JERSEY) LAW 1998 ('THE LAW')
CONTROL OF BORROWING (JERSEY) ORDER 1958 (THE “ORDER”)

SUMMARY OF STATISTICAL SURVEY OF FUNDS SERVICED IN JERSEY AS AT 30 SEPTEMBER 2004

Analysis by Class

Appendix F

Appendix G

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