Local lending: low-risk AML/CFT/CPF exemption FAQs

Introduction

These frequently asked questions have been compiled to help you understand the scope and applicability of the local lender exemption detailed in Article 4A of the Proceeds of Crime (Low Risk Financial Services Business) (Jersey) Order 2024.

Glossary

Terms used in this document:

AML/CFT/CPF Anti-money laundering, countering the financing of terrorism and countering proliferation financing
Money Laundering Order Money Laundering (Jersey) Order 2008
Schedule 2 Schedule 2 to the Proceeds of Crime (Jersey) Law 1999
Supervisory Bodies Law Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008
We, us, our, JFSC The Jersey Financial Services Commission (JFSC)

1. Background: why has the exemption been introduced?

On 3 September 2025, the Proceeds of Crime (Low Risk Financial Services Business) (Jersey) Order 2024 was amended to include local lending activity. This follows a review of the risks posed by Jersey’s private domestic lending market, which determined that certain local lending poses a low AML/CFT/CPF risk.

2. Who qualifies for the exemption?

The conditions for exemption are set out in Article 4A(2) of the Proceeds of Crime (Low Risk Financial Services Business) (Jersey) Order 2024 and are summarised below.

The lender must:

  • be a Jersey resident natural person or Jersey-incorporated company where all members and directors are individuals ordinarily resident in Jersey and each member holds the shares for their own benefit
  • only be registered with us for lending activity
  • not publicly solicit, advertise or promote the activity of lending.

The borrower is:

  • an individual ordinarily resident in Jersey or
  • a Jersey-incorporated company where each member and director are ordinarily resident in Jersey and each member holds the shares for their own benefit.

The lending:

  • must involve all payments from the lender, to and from the borrower, being via a bank registered under the Banking Business (Jersey) Law 1991, see our list of regulated bank
  • must continue to meet the conditions for all transactions
    • if the conditions are no longer met in relation to a lending transaction, the person is no longer a low-risk financial services business and must comply in full with the Money Laundering Order

3. What does the exemption cover?

Article 4A(2) of the Proceeds of Crime (Low Risk Financial Services Business) (Jersey) Order 2024 explains that lenders meeting the conditions of the Order do not need to comply with Articles 7, 8, 9 9A, 10, 11 and 11A of the Money Laundering Order. In summary, this means that an eligible local lender does not need to:

  • appoint a money laundering reporting officer or a money laundering compliance officer
  • conduct a business risk assessment or maintain policies and procedures

4. Do I still need to perform customer due diligence?

Yes. The customer due diligence requirements are detailed in Article 3 of the Money Laundering Order and are not exempt under the Proceeds of Crime (Low Risk Financial Services Business) (Jersey) Order 2024. This includes the requirement to undertake customer risk assessments.

5. Do I need to apply for the exemption or is it automatic?

The exemption is automatic for any person who meets the criteria.

For new lenders going through the application process, please complete the Supervisory Bodies Law application form on myJFSC and a member of our Central Authorisations team will contact you to assess whether the exemption is relevant to you.

For existing lenders already registered under the Supervisory Bodies Law, contact your Supervisor to confirm that you meet the exemption criteria to enable us to update our records and apply appropriate supervision.

6. Do I still need to be registered with the JFSC if I meet the exemption?

Yes. This is an exemption from certain Articles of the Money Laundering Order. Even if you meet the criteria for this exemption, you are still required to register under the Supervisory Bodies Law.

7. Does the use of a broker mean I am soliciting, advertising or promoting?

No. If you use a loan broker to obtain your Jersey lending customers, you may still be able to benefit from the exemption.

8. Will this affect the level of fees I pay?

Our proposed approach to fees for local lenders in 2026 will align with the current arrangements for natural person directors, who have the same legislative exemption. 

We will review this as part of our 2027 fees consultation.

9. Do I still have to submit supervisory risk data to the JFSC?

Yes. As a registered person under the Supervisory Bodies Law, we still require risk information about your business to perform ongoing risk assessments, from an entity and sector perspective. The type of data and the collection method are under review as part of our ongoing drive to simplify the data we collect from businesses.

Further information on this will be provided later this year on our website. You should expect to receive a data collection request from us in January 2026, in line with our standard data collection process.