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Navigating theglobal regulatory environment

O�shore Compliance and Regulatory NewsFebruary 2016

Offshore compliance and regulatory news

In this issueFebruary 2016

Introduction 3Sanctions 4The extent to which privilege can be maintained overcommunications with regulators 5Meaning of “ordinary course of business”: Royal Courtobservations for regulated businesses 6Are you engaged in enforcement matters? 7Do you have any Jersey dormant accounts? 8The new Channel Islands Financial Ombudsman 9Warning: civil liability for breaches of the codes 10Challenging the Guernsey Financial Services Commission? 11IN BRIEF... 12Predictions for 2016 13The team – Jersey 14The team – Guernsey 16The team – BVI 17The team – Cayman 18The team – Hong Kong 19The team – Luxembourg 20


IntroductionWelcome to the first edition of OffshoreCompliance and Regulatory News.

This Ogier publication is designed toinform you about recentdevelopments in this important andrapidly changing sector. Itcomprises briefings in a number ofdifferent key areas, authored bysome of our industry experts – all ofwhom you should feel free tocontact if you have any questions.We have sought to make it a pan-Channel Island publication, as thereis clearly much that can be usefullyshared between the industry inJersey and Guernsey in striving tostay ahead of the curve. It alsolooks to developments in the UnitedKingdom that may be influential inhow regulation will develop here.

This edition covers topics includingsanctions, privilege overcommunications with regulators,the Ombudsman and civil liabilityfor breaches of the codes.

The Ogier regulatory teamcomprises 30 practitioners, withexperts in Jersey, Guernsey,Cayman, BVI, Hong Kong andLuxembourg, covering all aspects ofcontentious and non-contentiousfinancial services regulatory andcompliance matters.

Our non-contentious capabilitiescan assist clients at each stage ofthe business life cycle and include:

banking, corporate, fund andtrust regulationauthorisations, licensing andregistrationM&A due diligence support

Prevention of issues is preferable,but where things have gone wrongwe can help provide effectivesolutions. Our contentious expertiseincludes:

investigations and enforcementAML and reporting obligationssanctions compliancebusiness crime issues

Our expertise is not limited to purefinancial services regulatory andcompliance issues, and includesadvice on employment, health andsafety, competition law, dataprotection and immigration issues.We also provide regulatory training,especially in relation to AML. If thereis a regulatory area where youwould like the Ogier team topresent to your management andstaff please let us know.

A list of key contacts can be foundat the end of the publication.

With best wishes for a prosperousand happy 2016.

Nick WilliamsPartner, co-chair of Ogier'sRegulatory Group+44 1534 [email protected]

Matthew ShaxsonGroup Partner, co-chair of Ogier'sRegulatory Group+44 1534 [email protected]


SanctionsNicola Roberts briefly reports on the currentRussian Sanctions, their applicability in Jersey andthe importance of remaining vigilant.

Robust sanctions compliance is ofcentral importance to financialservices businesses in Jersey, a pointmade all the more important by theimpact of recent EU/US sanctions.Understanding the operation ofvarious sanctions and havingsystems in place to ensure thatCDD processes capture sanctionsrisks is of the utmost importance inlight of the severe penalties in placefor either directly or indirectlycommitting sanctions offences.

The EU sanctions pursuant toRegulation (EU) No 833/2014 asamended by Regulation (EU) No960/2014 and Regulation (EU) No1290/2014 (the Russian Sanctions)and US financial sanctions (OFACissued sanctions pursuant toExecutive Order 13662) againstRussia in respect of the situation inUkraine have presented numerouschallenges for financial servicesbusinesses in the Island. Both theEU and US sanctions purport tostifle certain technology/defenceand oil exploration activitiesbenefitting Russia. However, unliketypical sanctions, which adopt anasset freeze to target funds andeconomic resources of certainsanctioned persons and entities,the financial sanctions have beendesigned to restrict the ability ofcertain Russian entities andconnected companies from raisingfinance on the capital markets orthrough loan and debt instruments.

Article 5 of the Russian Sanctions,which are directly applicable inJersey, pursuant to the EULegislation (Sanctions) (GeneralProvisions) (Jersey) Order 2014 and

EU Legislation (Sanctions – Russian)(Jersey) Order 2014, requiresorganisations – particularly trustand corporate service providers - tocarefully consider: whether entitiesbeing administered are caught bythe Russian Sanctions; whethertransactions that are beingengaged in are substantivelyprohibited by the restrictions in theRussian Sanctions; and whethersteps taken can/may be consideredto be tantamount to circumventionof the offences contained withinthe Russian Sanctions.

Penalties for sanctions breaches aresevere. Pursuant to the RussianSanctions, where a person either:contravenes the prohibitionscontained in the sanctions;intentionally furnishes falseinformation or a false explanationto any person exercising powersunder the sanctions; or destroys,mutilates, defaces, secretes orremoves any document with intentto evade the provisions of thesanctions, they will be guilty of anoffence and liable to imprisonmentfor a term of 2 years and to a fine.

Those affected by the RussianSanctions should ensure that robustCDD is being undertaken toascertain whether customers/clients etc., are sanctioned entities.Where there are applicablesanctions restrictions and withparticular reference to the RussianSanctions, it is imperative that athorough analysis of any proposedtransaction is undertaken andwhere any doubts arise, that legaladvice is obtained. Interpretation ofterms and concepts under the

Russian Sanctions is a fraught area,and quite complex questions canarise such as whether:

The issuing of shares in acompany breaches therestrictions on issuing transferablesecurities.A payment between companiesconstitutes a loan caught byRussian Sanctions.A loan arrangement concerningsanctioned entities satisfiesRussian Sanctions grandfatheringrequirements.An exemption may apply in orderto make an application to theChief Ministers Department for alicence permitting otherwisesanctioned activity.

With the EU confirming the RussianSanctions will remain in place untilat least July 2016, financial servicesbusinesses and their complianceteams will need to remain vigilantand ensure that Russian Sanctionsrisks are identified andappropriately dealt with.

Nicola RobertsManaging Associate+44 1534 [email protected]


The extent to which privilege can be maintainedover communications with regulatorsLeon Hurd reports on the English High Court’s ruling inProperty Alliance Group Limited v Royal Bank of ScotlandPLC [2015] EWHC 1557.

In June 2015 the English High Courthanded down its judgment inProperty Alliance Group Limited(PAG) v Royal Bank of Scotland PLC(RBS) [2015] EWHC 1557 (Ch). Thiscase provides useful guidance onthe extent of legal privilege inconnection with regulatoryinvestigations. The Jersey conceptof privilege follows English principlesand the decision is thereforerelevant to Jersey regulatedbusinesses.

BackgroundPAG’s claims related to allegedLIBOR manipulation and mis-sellingof interest-rate swaps. Its casedepending upon establishing thatRBS did manipulate LIBOR.

Therefore, it sought disclosure of: (i)a number of internal reports; (ii)without prejudice correspondencewith the FCA leading up to theFCA’s Final Notice; (iii) privilegedcommunications that had beenshared with the FCA (PAG assertedthat privilege had been waived as aresult). Each will be taken in turn.

Without Prejudice Privilege(WPP)The Court held that there wereimportant public interestarguments for affording parties thebenefit of WPP in settlementcommunications with theirregulators.

However, the Court found that if, inthe context of litigation with a thirdparty, an entity advanced a positivecase regarding the basis for a FinalNotice (for example, that there hadbeen no regulatory finding of

misconduct) the benefit of WPPmay be lost and the documentsliable to be disclosed.

Legal Advice PrivilegeRBS asserted legal advice privilegeover documents prepared bylawyers for the Executive SteeringGroup (the internal group dealingwith the investigation (ESG)).Whilst accepting that ESG wasessentially the “client” for thepurposes of the regulatoryinvestigation (so thatcommunications could in principleattract legal advice privilege), theCourt questioned whether certaindocuments, such as memorandaand factual summaries, were in factlegal advice. The Court thereforeordered that the ESG documentsshould be reviewed by it, in the firstinstance, to ascertain whetherclaims to legal advice privilege werecorrect.

Limited waiver of privilegeProvided documents remainedconfidential, RBS was entitled tomaintain its right to assert privilegeagainst third parties such as PAGeven though they had beensupplied (confidentially) to aregulator. However, as with WPPcommunications, the Court wouldnot allow privilege to stand incircumstances where an entity wasrelying on the lack of a regulator’sfinding of misconduct to assert apositive defence against a third-party claim.

CommentThe Court’s decision helpfullyclarifies the application of keyprinciples on legal professional

privilege. Regulated persons shouldexercise caution:

when relying on regulatoryfindings to support arguments inthird-party litigation. To theextent that publicly availabledocuments do not support thearguments made, there is a riskthat the Royal Court will orderinspection of communicationsproduced during the course of aregulatory investigation whichwould otherwise attract WPP.when making broad and generalclaims to legal advice privilegeover documents by virtue of thefact that they were provided bylawyers. Careful considerationhas to be given to the content ofthese documents first.

In principle, privileged documentscan be shared with a regulatorwithout there being a broaderwaiver of privilege, althoughcaution should be adopted if thereare, or may be, third party claims.

On balance, the judgment is apositive one. As ever, privilege is acomplex area and advice should betaken if you are in doubt.

Leon HurdAssociate+44 1534 [email protected]


Meaning of “ordinary course of business”: RoyalCourt observations for regulated businessesLeon Hurd and Ben Vickers report on the Royal Court’sdecision in SWM Ltd-v-Jersey Financial Services Commissionand AG [2016] JRC 014

SWM Limited (SWM), a regulatedfinancial services company, soughta declaration from the Royal Courtthat certain payments it wished tomake would be “in the ordinarycourse of business” and thereforewould not be in contravention of aprohibition contained in a direction(the Direction) issued by the JerseyFinancial Services Commission (theJFSC) to SWM pursuant to Article23 of the Financial Services (Jersey)Law 1998, as amended (the Law).

The FactsSWM was subject to regulatoryaction by the JFSC and was requiredto commission a report from GrantThornton (GT), into the suitability ofinvestment advice given to certainof its clients. SWM objected to GT’sappointment, challenging GT’sexpertise in the relevantinvestments and GT’s ability tomake a valid determination on thequality of SWM’s advice. The JFSCdisagreed. GT’s report concludedthat, to a great extent, the advice(and hence the investments made)had been unsuitable.

SWM disputed material parts of theGT report and advised the JFSC itwanted to commission a separatereport to place further evidencebefore the JFSC.

The Direction prohibited SWM frommaking “payments that were not inthe ordinary course of business”.The JFSC submitted that paymentby SWM for a separate report wasnot in the “ordinary course ofbusiness” and would require theJFSC’s prior permission. SWMsought declaratory relief from the

Royal Court to the contrary.

The questions for the Court were:

(a) Does it have jurisdiction tomake the declaratory relief sought?

(b) Should it, as a matter of policy,be prepared to grant a declarationin the present circumstances?

(c) Was the action proposed bySWM in the ordinary course ofbusiness?

The DecisionThe Court concluded as follows:

The declaration sought was for apractical purpose rather than beingof a fanciful or hypothetical nature.Such purpose was to determinewhether SWM could use its moneyfor the purpose that it wishedwithout being in breach of theDirection and therefore exposed toa criminal prosecution under theLaw. The Court decided that it didhave jurisdiction to make thedeclaration sought if, as a matterof discretion, it was appropriate inthe circumstances.

The policy issue in question waswhether a declaration would affectany future decision of the AttorneyGeneral (AG) as to whether heshould prosecute for a breach of adirection, which may in turntrespass upon his exclusiveprerogative to bring criminalproceedings. Whilst the Courtacknowledged the need for caution,the Court found that a declarationin the circumstances would notimpinge upon the AG’s jurisdiction

as it would only be expressing anopinion as to the meaning of anadministrative direction. Anydeclaration would not necessarilybe determinative of such a decisionand, even if it were, it would be toofar removed from the possiblefuture exercise by the AG of hispower.

On the question of whether SWM’sproposed action was in the“ordinary course of its business”, theCourt considered that theexpression:

(i) should be given its ordinaryEnglish meaning;

(ii) would not preclude a single,one-off act of the business;

(iii) may well include acts which arelikely to preserve the company’sbusiness against a threat to it; and

(iv) should be interpreted in thecontext of the company’s business.

The Court noted the significance ofSWM operating in a regulatedenvironment and the need toengage with the JFSC and seekadvice in connection with thatengagement. The obtaining of areport to challenge evidence reliedupon by the JFSC in order topreserve its business was,notwithstanding it being anexceptional step, in the ordinarycourse of its business.


Are you engaged in enforcement matters?Leon Hurd reports on the guidance generated from theJersey Royal Court decisions in W v Jersey Financial ServicesCommission

The W v JFSC litigation generatedsome useful guidance for thoseengaged in enforcement matters.Of particular interest was theclarification provided as to theappropriate course of action wherethere are concurrent criminal andcivil issues.

In a hearing before the Master in Wv JFSC [2014] JRC 250 , W who wasappealing against the JFSC’sdecision to issue a publicstatement, brought an applicationto stay his appeal under the maxim“le criminel tient le civil en état” –i.e. criminal cases take precedenceover civil cases. W pointed to thefact that in August 2014, hisAdvocate was informed by thedirector of the criminal division ofthe Law Officers’ Department thatthe relevant financial servicebusiness was under “activeconsideration by the Law Officers’Department in relation to whatsteps were being taken by theAttorney General” and on this basisargued that the appeal should bestayed pending the resolution ofthat criminal investigation. Inparticular W argued that the publicstatement would make findings asto his honesty and integrity whichwould be intrinsic to a finding ofdishonesty in any criminal caseagainst him. The Master considered,in some detail, the authorities in thearea and concluded that theappeal should be stayed to allowfurther time to the AttorneyGeneral to proceed with hisinvestigations.

This decision was, howeveroverruled on appeal in JFSC v W[2015] JRC094. The Royal Courtfound that the Master’s decisionhad “serious implications for theCommission in its ability to fulfil itsregulatory functions”. The RoyalCourt highlighted, amongst otherthings, that:

the stay could essentially operateindefinitely as the AttorneyGeneral was under no timepressure to progress a criminalinvestigation or to disclose detailsof its status; andthe public in Jersey is entitled toknow that the JFSC has decidedto bar someone from involvementin the financial services industryand the grounds upon which hehas been so barred as early asreasonably practicable, by way ofpublic statement.

For now, the Royal Court has set ahigh bar for applicants seeking astay of regulatory enforcementwhere there are possible concurrentcriminal actions and it is incumbenton the applicant to evidence thatreal prejudice will be suffered if it isnot granted. Indeed even whereprejudice can be demonstrated theroyal Court noted that “it may bepossible to avoid a stay of theappeal in the light of the strongpublic interest in it proceedingwithout delay, by imposing othersafeguards”.

Leon HurdAssociate+44 1534 [email protected]

For now, the RoyalCourt has set a highbar for applicantsseeking a stay ofregulatoryenforcement wherethere are possibleconcurrent criminalactions and it isincumbent on theapplicant to evidencethat real prejudicewill be suffered if it isnot granted.


Do you have any Jersey dormant accounts?Edward Scott looks at the draft Dormant Bank Accounts(Jersey) Law 201-

Banks may soon be able to closedormant bank accounts bydepositing the account balanceinto a central fund. Any money thatis not reclaimed from the fund willbe used for charitable and socialpurposes.

How will this help banks?Currently, where a Jersey bank haslost contact with a customer itmust maintain the customer’sdeposit account. The Dormant BankAccounts (Jersey) Law 201- willallow banks to remove the liabilitiesassociated with dormant accountsfrom their balance sheets.

How will the scheme work?An account will be classified asdormant if no transactions havebeen carried out by the customeron it for 15 years. Banks will have tonotify customers with dormantaccounts 3 months beforetransferring account balances tothe central fund. Transfers to thefund will be made annually, inDecember of each year

Can money be reclaimed?Customers will be able to reclaimmoney after a transfer is made tothe fund by getting in touch withtheir bank. Banks must retaincustomer records so that they canadminister claims and will (actingas agent for Jersey Reclaim Fund)be required to return the money tocustomers. Banks will then bereimbursed, usually annually, fromthe fund.

What happens to the money?Money that is not reclaimed will be

used to cover the costs of theCommissioner of Charities. It mayalso be used to fund arts, sport andthe heritage of Jersey and forcharitable purposes. While totaldeposits in Jersey are much lessthan in the UK, the Jersey schememay generate significant revenue;the UK dormant accounts schemehas transferred £238 million to theBig Lottery Fund since 2009.

Are there precedents for thescheme?The UK, US, Australia and theCayman Islands all have dormantaccounts schemes. The UK schemeis optional for banks but, incommon with the Cayman Islandsscheme, it is proposed that theJersey scheme will be compulsory.

When will the scheme start?The consultation paper indicatesthat the scheme may be operativefrom early 2016. Transitionalprovisions will give banks time tobuild systems to identify accountsthat have been dormant for 15years.

Edward ScottManaging Associate+44 1534 [email protected]

The Dormant BankAccounts (Jersey)Law 201- will allowbanks to remove theliabilities associatedwith dormantaccounts from theirbalance sheets.


The new Channel Islands Financial OmbudsmanEdward Scott and Frances Watson report on the role of theCIFO and the types of complaints it would look at fromindividual consumers and micro-enterprises.

The Channel Island’s first FinancialServices Ombudsman startedinvestigating and resolvingcomplaints on 16 November 2015.The Ombudsman adjudicatescomplaints from eligiblecomplainants in relation to financialservices covered by the schemeprovided in or from within Jersey orthe Bailiwick of Guernsey and canmake awards to complainants.

The Ombudsman Scheme is a jointJersey and Guernsey initiative.There is a shared single office inJersey with a shared staff andBoard.

Who is able to complain?Certain categories of persons areeligible to complain to theOmbudsman including individualsand small businesses, whether ornot they are Jersey or Bailiwick ofGuernsey residents and ChannelIslands charities with an annualincome under £2 million.

What can complaints be about?Complaints are restricted to acts inthe course of relevant financialservices business involved in,broadly, banking, lending, moneyservices, insurance, pensions andinvestments excluding themanagers/functionaries of fundsthat are not recognised funds(Jersey) or class A funds (Bailiwickof Guernsey).

Most trust company business,occupational pensions and fundservices business are outside thescope of the scheme.

When must complaints be made?In general, a complaint must bemade to the Ombudsman within sixyears of the act to which it relatesor if later than that two years afterthe complainant should havebecome aware of the cause forcomplaint. The complaint mustrelate to an act that occurred after1 January 2010 in relation to Jerseyor on or after 2 July 2013 in relationto the Bailiwick of Guernsey and thefinancial services provider musthave been given a reasonableopportunity (capped at threemonths) to consider the complaint.

However, a shorter time limit willapply, so that a complainant mustrefer the complaint to theOmbudsman within six months ofreceiving a final response on thecomplaint from the financialservices provider, if the providermeets certain requirements forhandling complaints.

What award may theOmbudsman make?The maximum monetary awardthat the Ombudsman can currentlyaward is £150,000 per case and/orrequire the financial servicesprovider to take specified steps inrelation to a complainant.

Is the Ombudsman'sdetermination binding?If the person making the complaintaccepts the determination, it isbinding.

How will it be funded?The scheme is free to complainantsand is to be paid for by levies on

financial services providers and bycase fees charged to providers inrespect of complaints againstthem.

How can I be ready for thescheme?The Ombudsman has published amodel complaints procedure. Inorder to take advantage of the sixmonth time limit for complaints tobe made you should makeamendments to client-facingdocuments to notify clients thatthe scheme is available and toinform them of the six month timelimit. You should also ensure thatyour procedures for complaintshandling conform to the modelprocedure.

Frances WatsonPartnerT+44 1481 [email protected]


Warning: civil liability for breaches of the codesEdward Scott looks at the civil financial penalties that theJersey Financial Services Commission can now impose ifthere has been a breach of the Codes of Practice.

The Jersey Financial ServicesCommission (JFSC) now has thepower to impose civil financialpenalties for significant andmaterial contraventions of theCodes of Practice and the AML/CFTHandbook. The level of fines hasbeen set and the JFSC haspublished a statement on theprinciples and processes it willadopt under the civil penaltiesregime.

Who is affected?All entities registered under theBanking Business (Jersey) Law 1991,the Insurance Business (Jersey) Law1996 and the Financial Services(Jersey) Law 1998 must adhere tothe relevant Codes of Practicepublished by the JFSC. Entitiesregistered under the Proceeds ofCrime (Supervisory Bodies) (Jersey)Law 2008 are required to adhere tothe AML/CFT Handbook.

What is the level of penalties?There are three levels of penalty,depending on the seriousness andcircumstances of the breach of theCodes of Practice.

The highest level of financialpenalty is up to 8% of 'relevantincome'. Broadly, 'relevant income'is income derived from licensedbusiness activities. There is a cap of£4,000,000 on the level of penaltythat can be imposed for moreserious breaches.

The JFSC will also be able to issuepublic statements when it imposesa penalty.

The JFSC has published RegulatorySanctions: Decision Making Processsetting out the process andprinciples that apply to JFSCdecisions in a number of areas,including on civil penalties.

What should I be checking?While it may be difficult to obtaincover for civil penalties imposed bythe JFSC, registered persons maywish to check that their insurancepolicies cover the costs associatedwith a JFSC action to impose civilpenalties. Licensees may also wishto confirm that they comply withthe Codes and AML/CFT Handbooknow that breaches may lead to civilpenalties. In particular, the Codeswere amended with effect from 1July 2014 and further requirementsimposed. The AML/CFT Handbookwas amended with effect from 1January 2015 and 24 March 2015. Ifthey have not done so already,registered persons will wish toconduct a thorough gappinganalysis to ensure that they complyto the higher standards. Specialistteams at Ogier can help with thatprocess.

Edward ScottManaging Associate+44 1534 [email protected]

While it may bedifficult to obtaincover for civilpenalties imposed bythe JFSC, registeredpersons may wish tocheck that theirinsurance policiescover the costsassociated with aJFSC action toimpose civil penalties.


Challenging the Guernsey Financial ServicesCommission?Mathew Newman reports on a recent decision of Royal Courtof Guernsey whereby a Regulated Fund successfullycontested a winding up application by the GFSC.

In August 2015, the GuernseyFinancial Services Commission(GFSC) brought an applicationagainst a regulated fund undersection 410(1) of the Companies(Guernsey) Law, 2008 on the basisthat the fund should be wound upfor the protection of the publicand/or the protection of thereputation of the Bailiwick ofGuernsey.

Whilst it was agreed that the fundwas, at the time, cash flowinsolvent, in that it could not pay itsdebt as they fell due, theapplication was contested by thefund and went to a three dayhearing before LB Marshall QC inthe Royal Court of Guernsey duringNovember 2015.

The fund contended that for thepurposes of section 410(1), the“public” meant investors orprospective investors into the fund.The fund was already subject to acondition imposed by the GFSCunder section 9 of the Protection ofInvestors (Bailiwick of Guernsey)Law, 1987 that no further investorscould subscribe into the fund andwas also subject to a court-imposed injunction that nopayments could be made out of thefund without authorisation of theGFSC. On that basis, the fundargued that the “public” wasalready adequately protected. Thefund also contended that thereputation of the Bailiwick wouldneither be enhanced or otherwiseby the winding up of the fund, givenits relative small size and small poolof investors and given that noallegation of fraud or misfeasance

had been made by the GFSCagainst its directors. The fund’sthird argument was that liquidationwould not be in the best interests ofinvestors because the liquidatorwould sell the fund’s assets quicklyand at “fire sale” prices because aGuernsey company in liquidationcannot trade except if expedient forthe beneficial winding up. If thefund went into liquidation, investorswould only receive a fraction oftheir investment back.

Ultimately the Court agreed withthose arguments and was unwillingto wind up the fund as it could notsee how the public or thereputation of the Bailiwick would beprotected by a liquidation and,conversely, was very concerned toensure that current investors werenot prejudiced or disadvantaged.The fund instead went intoadministration, a rescue processunder Guernsey law which at leastgives the fund, acting by its jointadministrators, the opportunity toachieve a better realisation ofassets than it would do on awinding up and thus provide abetter return to investors.

Mathew NewmanPartner+44 1481 [email protected]

The Court [ ] wasunwilling to wind upthe fund as it couldnot see how thepublic or thereputation of theBailiwick would beprotected by aliquidation and,conversely, was veryconcerned to ensurethat current investorswere not prejudicedor disadvantaged.


IN BRIEF...Revision of regulatory laws inGuernseyThe Commission is proposing toupdate and improve the Bailiwick’sexisting regulatory laws for thefinancial services sector in order to:

Ensure compliance with relevantinternational standards;Conform the laws and make themeasier to understand;Provide for the possiblerequirements of MiFID II andMiFIR; andCreate efficiencies for both theCommission and industry byenhancing clarity and removinginconsistencies.

A report by the Policy Councilentitled Revision of the FinancialSupervisory and Regulatory Lawswas passed by the States in theirOctober meeting. This reportdetails the proposed changes anddirects legislation to be prepared.

Guernsey’s Moneyval ReportOn 15 January 2016 Guernseywelcomed the release ofMONEYVAL’s report on the Bailiwickof Guernsey’s framework for anti-money laundering and counter-terrorist financing measures, andthe effectiveness of thatframework. The report is a result ofa mutual evaluation carried out byMONEYVAL (the Council of Europebody responsible for assessingcompliance with principalinternational standards oncountering money laundering andfinancing of terrorism) in October2014 following Guernsey’s electionto be subject to the evaluationprocesses of MONEYVAL in 2012.

One of the key findings of thereport was that whilst Guernsey is amajor international finance centrewith a mature legal and regulatorysystem, the jurisdiction shouldconsider increasing the maximumfinancial penalty for AML/CFTbreaches by legal bodies.

In keeping with Guernsey’sproactive and responsive legal andregulatory framework, Guernsey’sPolicy Council has reviewed the levelof discretionary financial penaltiesavailable to the Guernsey FinancialServices Commission and, amongother matters, has recommendedthat such penalties be increased:

for licensees and former licensees(other than personal fiduciarylicensees) from £200,000 to£4,000,000 (anything over£300,000 being limited to 10% ofturnover); andfor directors and officers oflicensees and former licenseesand for personal licensees, from£200,000 to £400,000.

We will update you ondevelopments in our next edition!

Follow us on LinkedInand Twitter for moreupdates


Predictions for 2016What's on the horizon this year?

Sanctions remain inforce

Key area for compliance and supervision, particularly in light of Russian sanctions. Businessesmust remain vigilant.

Further enforcement

Relating to corporate governance, AML compliance and proceeds of crime. Principal persons inparticular must ensure they exercise care, diligence and skill (avoid placing significant relianceon administration teams) and comply with their duties under the Codes of Conduct at alltimes

Markets in FinancialInstruments Directive II(MiFID2) Consultation

The JFSC is in the process of issuing a series of consultations, the first of which is due to takeplace during January to March this year. MiFID2 will apply to Investment Firms (very broaddefinition), Market Operators, Data Reporting Service Providers and Third Country InvestmentFirms. Jersey and Guernsey firms are treated as non-EU “third country” firms by the EU. MiFID2will succeed the original MiFID, and strengthen EU regulatory framework by harmonisingrequirements, address non-compliant behaviour and reinforce investor confidence by increasinginvestor protection, transparency in financial markets, and by strengthen the corporategovernance. The implementation dated for MiFID2 is early 2018.

Financial Ombudsman

Although the Ombudsman has been relatively quiet so far, we will start seeing the firstadjudications following the resolution of complaints by consumers and small business againstfinancial firms in Jersey and Guernsey.The CIFO is also currently consulting in relation to 3 policies:Factors to be considered in rejecting complaintsDelegation and review of rejection decisionsFunding of the CIFO

These will be of interest to relevant financial services providers

Common ReportingStandard Agreement Effective from 1 January 2016 in Jersey.

MONEYVAL It is anticipated that the Jersey MONEYVAL report will be published in early 2016

Regulation of VirtualCurrency

Feedback is expected on the Jersey July 2015 consultation regarding the regulation of virtualcurrency activities. It is anticipated that primary legislation will be lodged for Jersey Statesdebate in early 2016.

Changes/Amendments

Jersey Codes of Practice:the JFSC is currently consulting on these. Closing date is 19 February 2016. Changes relate toNotification requirements and complaint handling procedures.Jersey AML Handbook:with regards to the “material controlling ownership interest” test.


The team – Jersey

Contentious regulatory matters

Nick WilliamsPartner, JerseyT +44 1534 514318M +44 7797 [email protected]

Edward MackerethPartner, JerseyT +44 1534 514320M +44 7797 [email protected]

Nigel SandersPartner, JerseyT +44 1534 514285M +44 7797 [email protected]

Nicola RobertsManaging Associate, JerseyT +44 1534 514021M +44 7797 [email protected]

Michael LittleManaging Associate, JerseyT +44 1534 514374M +44 7797 [email protected]

Anna JohnsonSenior Associate, JerseyT +44 1534 [email protected]

Leon HurdAssociate, JerseyT + 44 1534 [email protected]

Non-contentious regulatory matters

Matthew ShaxsonGroup Partner, JerseyT +44 1534 514044M +44 7797 [email protected]

Bruce MacNeilPartner, JerseyT +44 1534 514394M +44 7797 [email protected]

Sara JohnsPartner, JerseyT +44 1534 514205M +44 7797 [email protected]

Niamh LalorPartner, JerseyT +44 1534 514210M +44 7797 [email protected]

Sally EdwardsPartner, JerseyT +44 1534 [email protected]

Edward ScottManaging Associate, JerseyT +44 1534 514054M +44 7797 [email protected]

Dilmun LeachSenior Associate, JerseyT +44 1534 [email protected]


The team – Guernsey


Mathew NewmanPartner, GuernseyT +44 1481 752253M +44 7839 [email protected]

Simon DaviesPartner, GuernseyT +44 1481 737181M +44 7839 [email protected]


Frances WatsonPartner, GuernseyT +44 1481 [email protected]

Ellen ArmsdenGroup In-house Counsel, GuernseyT +44 1481 [email protected]


The team – BVI


Andrew WanambwaPartner, BVIT +1 284 852 [email protected]

Brian LacyPartner, BVIT +1 284 852 7358M + 1 284 542 [email protected]


David CooneyPartner, Cayman IslandsT +1 345 815 [email protected]

Michael KillourhyPartner, BVIT +1 284 852 7309M +1 284 542 [email protected]


The team – Cayman


Rachael ReynoldsPartner, Cayman IslandsT +1 345 815 1865M +1 345 516 [email protected]

Ulrich PayneRelationship Partner, Cayman/Hong KongT +1 345 815 1866M +1 345 525 [email protected]


David CooneyPartner, Cayman IslandsT +1 345 815 [email protected]

Madeleine WelhamManaging Associate, CaymanIslandsT +1 345 815 [email protected]


The team – Hong Kong


Ray NgPartner, Hong KongT +852 3656 6041M +852 6716 [email protected]


Nicholas PlowmanPartner, Hong KongT +852 3656 6014M +852 6390 [email protected]


The team – Luxembourg

François PfisterPractice Partner, LuxembourgT +352 2712 2020M +352 621 317 [email protected]

Daniel RichardsPartner, LuxembourgT +352 2712 2011M +352 621 267 [email protected]

Contacts

British Virgin IslandsRitter House Wickhams Cay IIPO Box 3170Road Town, TortolaBritish Virgin Islands VG1110T +1 284 852 7300F +1 284 852 7450E [email protected]

Cayman Islands89 Nexus WayCamana BayGrand CaymanCayman Islands KY1-9009T +1 345 949 9876F +1 345 949 9877E [email protected]

GuernseyRedwood HouseSt Julian's AvenueSt Peter PortGuernsey GY1 1WAT +44 1481 721672F+44 1481 721575E [email protected]

Hong Kong11th Floor Central Tower28 Queen's Road CentralCentralHong KongT +852 3656 6000F +852 3656 6001E [email protected]

Jersey44 EsplanadeSt HelierJersey JE4 9WGChannel IslandsT +44 1534 514000F +44 1534 514444E [email protected]

Luxembourg2-4 rue Eugène RuppertPO Box 2078L-1020 LuxembourgT +352 2712 2000F +352 2712 2001E [email protected]

ShanghaiRoom 3671Level 36 Shanghai InternationalFinance Centre Tower IINo. 8 Century AvenuePudong New AreaShanghai 200120ChinaT +86 21 6062 6294E [email protected]

TokyoHolland Hills Mori Tower RoPSuite 8035-11-1 Toranomon, Minato-kuTokyo 105-0001JapanT +81 3 6430 9500F +81 3 6430 9501E [email protected]

Ogier provides practical advice on BVI, Cayman Islands,Guernsey, Jersey and Luxembourg law through its globalnetwork of offices. Ours is the only firm to advise on thesefive laws. We regularly win awards for the quality of ourclient service, our work and our people.

This client briefing has been prepared for clients andprofessional associates of Ogier. The information andexpressions of opinion which it contains are not intended tobe a comprehensive study or to provide legal advice andshould not be treated as a substitute for specific adviceconcerning individual situations.

Regulatory information can be found at www.ogier.com

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