How we write our rules

Our regulatory materials set out the requirements, expectations and guidance that apply to the firms and individuals we regulate and supervise. We have a responsibility to ensure that what we publish is clear, purposeful and proportionate. This statement sets out the principles that will guide how we draft regulatory material, and we expect industry to hold us to them.

Why this matters

Principles-based regulation focuses on the outcomes to be achieved, rather than prescribing every step firms must take to achieve them.

Principles-based regulation suits Jersey because it:

• provides flexibility to accommodate different business models
• allows us to respond to emerging risks without the delays of rewriting prescriptive rules
• produces regulatory text that endures

For an international finance centre of Jersey’s scale and ambition, this is a competitive necessity.

Principles-based regulation is not vague regulation. It must be clear about the outcomes expected and the purpose behind them. Drafting that does not provide sufficient clarity can lead to defensive compliance, unnecessary queries, increased costs and inconsistency in supervisory outcomes. This statement addresses that directly.

Our commitments

Clear and accessible language:

• we will write in plain, straightforward English
• our documents should be accessible to those who need to use and apply them, including compliance officers, business heads and board members, without the need for unnecessary specialist interpretation

Stated outcomes:

• requirements and guidance will clearly state the regulatory outcome we are seeking to achieve
• firms should be able to understand our intent and the purpose of the obligation without needing to infer it from surrounding material

Explained purpose:

• where we introduce or amend a regulatory requirement, we will explain the policy rationale, including the problem we are addressing or the risk we are seeking to mitigate

Practical clarity without unnecessary prescription:

• we will provide enough practical guidance to support consistent application, while preserving firms’ discretion as to how they meet the required outcome
• where examples or further explanation would help address common points of uncertainty, we will include them where appropriate

A clear basis for supervision and enforcement

• by making expectations and their underlying intent clear at the point of drafting, we provide a foundation for consistent supervisory assessment and proportionate enforcement action

Implementation

These principles apply to new policy from the outset.

Existing regulatory text will be brought into line as it is reviewed through the normal policy cycle.

We are also publishing a separate consultation charter setting out our commitments to industry engagement when we develop new policy or materially amend our framework.

Read our consultation charter.