Wire transfer: Guide to Section III of risk based supervision data

Guide to Section III of risk based supervision data:

Wire transfer

 

1   General Guidance

1.1   Overview

1.1.1   In 2018 the JFSC collected supervisory risk data for reporting entities for the first time. This exercise was repeated in 2019 and, as advised on 30 October 2019[i], the JFSC is collecting the same data in 2020, including wire transfer data from deposit-takers.

1.1.2   Understanding the destination of funds transfers and the jurisdictions from which funds are received (funds flow data) is a recognised key indicator of the risk of money laundering and terrorist financing present in a jurisdiction. Where a jurisdiction has a Central Bank, funds flow data is captured and monitored as a matter of course, but as Jersey has no Central Bank, the JFSC is requesting funds flow data from a number of organisations.

1.1.3   Any questions that cannot be answered by reading this document should be emailed to your Supervision Manager. For queries relating to the myJFSC portal please email myjfsc@jerseyfsc.org.

1.2   Scope

1.2.1   If a person is in the business of transmitting or receiving funds by wire or other electronic means, and is doing such business in or from within Jersey, then they are required to register with the JFSC. Registration is required as a result of Article 2(9) of the Financial Services (Jersey) Law 1998 which defines money service business as:

A person carries on money service business if the person carries on the business of any of the following –

(a)a bureau de change;

(b)providing cheque cashing services;

(c)transmitting or receiving funds by wire or other electronic means;

(d)engaging in money transmission services.

1.2.2   There are 2 exceptions to the registration requirement, one of which is where a person is also registered to carry on deposit-taking business under the Banking Business (Jersey) Law 1991, in which case the person has to notify the JFSC that it is carrying on money service business. The 25 currently registered deposit-takers have made such a notification and are being requested to provide wire transfer data.

1.2.3   As the definition of money service business includes 4 specific types of activity, not all those registered to carry on money service business are being requested to provide wire transfer data. Of the 8 persons currently registered, 3 have been requested to provide data.

1.2.4   Throughout this guidance document, and the Excel workbook, the 25 deposit-takers and the 3 identified money service businesses are collectively referred to as a Reporting Entity.

1.3   Excel workbook

1.3.1   The wire transfer data is to be provided to the JFSC through completion of an Excel workbook which contains 3 spreadsheets:

ZX – Wire Transfer data

ZY – Outgoing Country List

ZZ – Incoming Country List

1.3.2   Guidance on completing the spreadsheets is provided in section 2 of this document.

1.4   Data reporting period

1.4.1   Data should be provided for the period 1/1/2019 to 31/12/2019.

1.5   Data submission

1.5.1   Reporting Entities are recommended to consider the data request as soon as possible. It may take some time to gather the data requested and the deadline for submission is 17:00 on 31 March 2020.

1.5.2   Each Reporting Entity will be submitting a completed Excel Workbook for Section III – wire transfers through the JFSC Portal, and each Reporting Entity has a designated individual who is the JFSC Portal contact, which, in the vast majority of cases, is the compliance officer.

1.5.3   Notwithstanding that the JFSC Portal contact has responsibility for submitting the data, the board, or equivalent in a branch scenario (Principal Manager) of the deposit-taking business, should have oversight of the content of the submission made on their behalf.

1.5.4   All parts of each question on ZX Wire transfer data should be considered. It is not necessary to insert “0” against each country in spreadsheets ZY-Outgoing Country List and ZZ-Incoming Country List.

1.6   Integrity checking your submission

1.6.1   Please see the table at 2.3.3 which highlights the interconnectivity of the questions.

 

2   Section ZX – Wire Transfer Data

2.1   Overview

2.1.1   This section collects data on:

(a)   which fund transfer systems are being used;

(b)   the currencies in which wire transfers can be made;

(c) the number and value of transactions analysed by country and split between incoming and outgoing transactions.

2.2   Question ZX1

Full name of Reporting Entity

2.2.1   Either insert the name of:

(a)   the deposit-taker that has notified the JFSC that they carry on money service business; or

(b)   the firm registered to carry on money service business.

2.3   Question ZX2

Please indicate below which fund transfer systems you utilise (Mark with an X all that apply)
a. SWIFT
b. BACS / faster payments
c. CHAPS
d. SEPA
e. Other

f. Please provide details of the other fund transfer systems you utilise

2.3.1   All funds transfer systems should be identified.

2.3.2   If a Reporting Entity utilises a funds transfer system which is not listed above please provide details in the free text box at ZX2(f).

2.3.3   The answer to this question will inform which other questions the reporting entity will need to complete – see table below.

	Relevant ZX questions
Fund transfer system	ZX3	ZX4	ZX5	ZX6	ZX7	ZX8	ZX9	ZX10	ZX11
a. SWIFT									
b. BACS / faster payments									
c. CHAPS									
d. SEPA									
e. Other									

Note: ZX11 is not compulsory.

2.4   Question ZX3 and ZX4

ZX3 How many currencies does your entity support ie. make payments or receive funds in?

ZX4 With reference to question ZX3. Indicate below the currencies in which you make fund transfers (Mark with an X all that apply)

a. AED	b. AUD	c. CAD	d. CHF	e. Euro
f. GBP	g. HKD	h. SEK	i. SGD	j. USD

Other, please provide the ISO code of all other currencies (separated by comma “,”)

2.4.1   The JFSC is interested to understand the actual currencies in which funds are flowing through the Island as well as the jurisdictions to which payments are being made and funds received from. Consequently, these questions seek data about the underlying currency in which payments and receipts are being undertaken.

2.4.2   Question ZX3, please state the total number of currencies in which payments or receipts can be made through a Reporting Entity. Currencies should not be double counted i.e. if payments can be made in USD and funds received in USD then count 1, if funds can be received in AUD but not made in AUD then also count as 1.

2.4.3   Question ZX4, includes 10 currencies and a Reporting Entity should mark with an “X” all those currencies that it supports from a funds transfer perspective.

2.4.4   The 10 currencies were identified from the 2017 sample data as being the most common currencies. Where a Reporting Entity receives funds or makes payments in other currencies please identify these using ISO codes in the free text box.

2.5   Questions ZX5 to ZX7

Question ZX5

With respect to payments made through BACS/CHAPS/faster payments please provide, analysed by country to which the ultimate payment is being made, the following information for the calendar year 2019:
a. Number of transactions

i. UK

ii. Jersey

iii. Guernsey

iv. Isle of Man

v. Gibraltar

b. Value of transactions (in GBP)

i. UK

ii. Jersey

iii. Guernsey

iv. Isle of Man

v. Gibraltar

2.5.1   Only answer this question if ZX2b or ZX2c have been marked with an “X”.

2.5.2   BACS/CHAPS /faster payments are all fund transfer systems that only deal with GBP-based transfers.

2.5.3   Question ZX5 is designed to understand the extent to which Reporting Entities are using these systems to make GBP payments to GBP-based jurisdictions.

2.5.4   The JFSC recognises that where the systems are being used to transfer GBP funds to another entity in Jersey there will be a degree of double counting (within the total population of responses) as the recipient entity may be reporting these transactions in response to question ZX8.

Question ZX6

With respect to payments made through SWIFT please provide, analysed by country (broken down on sheet ZY – Outgoing Country List) to which the ultimate payment is being made, the following information for the calendar year 2019:
a. Number of transactions
b. Value of transactions (in GBP)

2.5.5   Only answer this question if ZX2a has been marked with an “X”.

2.5.6   Please convert all currencies to GBP and report the GBP equivalent value.

2.5.7   ZY – Outgoing Country List should be completed with the number and value of transactions which have been made to a particular country. The currency of the transaction is not important in respect of answering this question, the key matter is the destination of the payment.
For example: a USD payment to an account in the Cayman Islands should be reported against the Cayman Islands.

2.5.8   Where a Reporting Entity is a deposit-taker which operates in Jersey as a branch please only include details relating to the transactions executed through the Jersey Branch (i.e. associated with the Jersey branch sort codes).

2.5.9   Where a Reporting Entity is registered to carry on money service business but is not a Jersey company please only include details relating to the transactions associated with the Jersey registration.

Question ZX7

With respect to payments made through other payment systems please provide, analysed by country (broken down on sheet ZY – Outgoing Country List) to which the ultimate payment is being made, the following information for the calendar year 2019:
a. Number of transactions
b. Value of transactions (in GBP)

2.5.10   Only answer this question if either ZX2d or ZX2e have been marked with an “X”.

2.5.11   Please convert all currencies to GBP and report the GBP equivalent value.

2.5.12   ZY – Outgoing Country List should be completed with the number and value of transactions which have been made to a particular country using a payments system which is not one of the following:

(a)   SWIFT;

(b)   BACS/faster payments; or

(c) CHAPS.

2.5.13   The currency of the transaction is not important in respect of answering this question, the key matter is the destination of the payment.
For example: a USD payment to an account in the Cayman Islands should be reported against the Cayman Islands.

2.5.14   Where a Reporting Entity is a deposit-taker which operates in Jersey as a branch please only include details relating to the transactions executed through the Jersey Branch (i.e. associated with the Jersey branch sort codes).

2.5.15   Where a Reporting Entity is registered to carry on money service business but is not a Jersey company please only include details relating to the transactions associated with the Jersey registration.

2.5.16   Note: payments made through SEPA should be included here.

2.6   Question ZX8 to ZX10

Question ZX8

With respect to payments made through BACS/CHAPS/faster payments please provide, analysed by country from which the funds were received, the following information for the calendar year 2019:
a. Number of transactions

i. UK

ii. Jersey

iii. Guernsey

iv. Isle of Man

v. Gibraltar

b. Value of transactions (in GBP)

i. UK

ii. Jersey

iii. Guernsey

iv. Isle of Man

v. Gibraltar

2.6.1   Only answer this question if ZX2b or ZX2c have been marked with an “X”.

2.6.2   As noted above, BACS/CHAPS /faster payments are all fund transfer systems that only deal with GBP-based transfers.

2.6.3   Question ZX8 is designed to understand the extent to which Reporting Entities receive GBP from GBP-based jurisdictions, through these systems.

2.6.4   The JFSC recognises that where receipts are from another entity in Jersey there will be a degree of double counting (within the total population of responses) as the paying entity may be reporting these transactions in response to question ZX5.

Question ZX9

With respect to payments made through SWIFT please provide, analysed by country (broken down on sheet ZZ – Incoming Country List) from which the funds were received, the following information for the calendar year 2019:
a. Number of transactions
b. Value of transactions (in GBP)

2.6.5   Only answer this question if ZX2a has been marked with an “X”.

2.6.6   Please convert all currencies to GBP and report the GBP equivalent value.

2.6.7   ZZ – Incoming Country List should be completed with the number and value of transactions which have been received from a particular country. The currency of the transaction is not important in respect of answering this question, the key matter is the origin of the funds.
For example: a USD receipt from an account in the Cayman Islands should be reported against the Cayman Islands.

2.6.8   Where a Reporting Entity is a deposit-taker which operates in Jersey as a branch please only include details relating to the transactions executed through the Jersey Branch (i.e. associated with the Jersey branch sort codes).

2.6.9   Where a Reporting Entity is registered to carry on money service business but is not a Jersey company please only include details relating to the transactions associated with the Jersey registration.

Question ZX10

With respect to payments made through other payment systems please provide, analysed by country (broken down on sheet ZZ – Incoming Country List) from which the funds were received, the following information for the calendar year 2019:
a. Number of transactions
b. Value of transactions (in GBP)

2.6.10   Only answer this question if either ZX2d or ZX2e have been marked with an “X”.

2.6.11   Please convert all currencies to GBP and report the GBP equivalent value.

2.6.12   ZZ – Incoming Country List should be completed with the number and value of transactions which have been made to a particular country using a payments system which is not one of the following:

(a)   SWIFT;

(b)   BACS/faster payments; or

(c) CHAPS.

2.6.13   As for SWIFT payments the currency of the transaction is not important in respect of answering this question, the key matter is the origin of the funds.
For example: a USD receipt from an account in the Cayman Islands should be reported against the Cayman Islands.

2.6.14   Where a Reporting Entity is a deposit-taker which operates in Jersey as a branch please only include details relating to the transactions executed through the Jersey Branch (i.e. associated with the Jersey branch sort codes).

2.6.15   Where a Reporting Entity is registered to carry on money service business but is not a Jersey company please only include details relating to the transactions associated with the Jersey registration.

2.6.16   Note: funds received through SEPA should be included here.

2.7   Question ZX11

Please provide below details which you consider will assist in understanding your responses:

2.7.1   This is a free text area which has been included such that Reporting Entities can provide some explanative text to support their submitted data

[i] Industry update: 2019 and 2020 Supervisory Risk Data Collection Exercise