Our Central Authorisation team is responsible for determining all applications received from applicants seeking to undertake financial services business in Jersey. The team is also responsible for completing all voluntary revocation and cessation activity and a significant volume of fund maintenance tasks.
Overview of the team
The team is made up of 13 staff members after additional resource was recruited in 2021 to support the increasing number of applications and growing activity. An independent review of authorisations at the JFSC, published in February 2021, identified that the team follow many good practices and overall make robust, pragmatic decisions when vetting and processing applications. It also recommended a number of changes to bring us in line with international best practice. As a result, the team have provided input into the design and implementation of a revised authorisation framework to implement these recommendations.
Following the implementation of these recommendations, the team have created this guidance document to highlight examples of best practice. It also highlights areas for improvement, which have been observed across applications received, to enable applicants to support the swift processing of their applications.
Best Practice
Prioritisation
Where an application is urgent, insight into both the rationale for the urgency and associated time constraints should be given to enable the team to manage competing priorities.
The team will often be progressing a number of urgent applications at any one time, providing such information will ensure the required resource is allocated to your application as needed. The team’s capacity to be agile in this regard is further enhanced where it is communicated, which applications are not urgent and any given time.
myProfile applications
myProfile was launched in November 2020 as the replacement of the Personal Questionnaire (PQ) portal. In addition to providing a more usable interface, we have observed that a greater proportion of entity applications are submitted with a complete set of myProfile applications from those connected Key and Principal Persons. This has enabled more applications to processed to completion without any associated delay.
Complex applications
The team deals with many complex applications, which inevitably involve a number of requests being presented to the applicant’s Jersey legal counsel. Where applicants have recorded such correspondence via a table of responses as opposed to within the body of emails it has been much easier for the team to track. We would encourage applicants to take this approach going forwards.
Areas for Improvement
A significant percentage of applications are not complete at the point at which they are submitted. This is commonly due to:
Incomplete or insufficient source of wealth and source of funds information.
We need to be advised of the source of wealth and source of funds in relation to the beneficial owners of Registered Persons in line with the requirements of the AML/CFT Codes of Practice. Applicants are reminded to gather and provide this information along with the initial application to support an efficient and effective application process.
Insufficient information regarding beneficial ownership.
We are required to fully understand the beneficial ownership of a Registered Person, including the identity of those ultimate beneficial owners who do not meet the definition of Principal Persons. It is often the case that the identification of such persons, where they exist, are not brought to our attention along with the initial application. This can result in delays in consideration of an application.
Incomplete disclosure in relation to all partners’ counterparties and service providers.
Where applications are complex, the team often receive incomplete disclosure in relation to all partners, counterparties and service providers associated with an application. This outstanding information has a material impact on the team’s ability to progress applications in a timely manner.
Incomplete or insufficiently complete application forms.
On occasions, incomplete application forms are received in which certain questions are either unanswered, answered as ‘not applicable’ or answered ‘see business plan’. Each of these may result in unnecessary delays in the progress of an application. All applicants must ensure that forms are completed in full prior to submission. For example, ‘Not Applicable’ may be an acceptable answer, however, where any ambiguity exists; we would expect an applicant to clearly state why a certain question is not applicable. Answering ‘see business plan’ is not sufficient.
myProfile application issues
Although the team have observed significant efficiencies through the introduction of myProfile, we have also identified a number of inaccuracies in applications received.
Guidance has been published and applicants are encouraged to refer to this: Help (jerseyfsc.org)
One of the most common errors seen is where the name of the entity and nature of the role, to which our ‘no objection’ to act is sought, does not correspond with the information in the respective application form.
Applicants should also be mindful that myProfile applications submitted by individuals not previously known to us could take up to six weeks to considered. It is therefore best practice for such myProfile applications to be submitted as soon as possible, especially where there may be a degree of urgency regarding the associated application.
Insufficient consideration of the limited track record or experience of a proposed service provider.
It has been noted that applicants sometimes fail to demonstrate sufficient consideration has been given to the appropriateness of a proposed service provider. Concerns arise where a service provider appears to have a limited track record or limited experience in a given sector or asset class. A gap analysis would help demonstrate that the applicant has considered the existence of any such gaps and has established an appropriate plan to mitigate these potential risks. Being proactive in this regard will often expedite the review of the application.
Pre-applications
We are willing to consider pre-applications where we have scope; however, the team is unable to prioritise these over actual applications.
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