14 October 2020
Jersey fund market update
As we head into the last quarter of 2020 we take a look at some of the latest developments in the Jersey investment fund market including the migration of limited partnerships, changes to SARs and MIRs response letters, requirements from the Tax Office for winding up/migrating/merging companies, changes to outsourcing notifications, the new Disclosure Law, companies registry, fee rates and deadlines for accounts.
Limited Partnerships (Continuance) (Jersey) Regulations 2020
The Limited Partnerships (Continuance) (Jersey) Regulations 2020 came into force on 17 July 2020 and provide a statutory regime to allow non-Jersey limited partnerships to continue (i.e. migrate) into Jersey. A limited partnership migrated using this statutory regime will cease to be treated as a limited partnership under another jurisdiction’s laws and instead be treated as a limited partnership under the Limited Partnerships (Jersey) Law 1994 with effect from the date it receives its “certificate of continuance”. Crucially the process will not create a new limited partnership, affect any partnership interest or affect any act done before the continuation. The continuation application process contains broadly similar requirements as for a company migration. In July 2020, Carey Olsen issued a guidance note on the new regulations, which can be accessed at: Jersey introduces statutory migration regime for limited partnerships into Jersey.
Changes to SARs and MIRs response letters
The Financial Intelligence Unit at the States of Jersey Police has changed how they send response letters for suspicious activity reports (SARs) and miscellaneous information report (MIRs). From 1 June 2020, following the submission of a SAR or MIR, an email will be issued by the Financial Intelligence Unit to confirm they have received the report, replacing the response letter that the unit previously sent out. This change is aimed at making the process easier for all parties, while maintaining compliance with the Proceeds of Crime (Jersey) Law 1999.
No objection letter from the Tax Office on a winding up/migration/merger
In addition to bringing all tax filings up to date, Jersey companies wishing to wind up, migrate or merge should note they will additionally be required to obtain a prior letter of no objection from the Tax Office. Previously companies have been required to notify the Tax Office but without an obligation to obtain a response. The change in approach appears primarily aimed at preventing companies from avoiding having to declare a failure to meet the economic substance test and therefore the related information sharing and financial penalties (£10k first year rising to £100k for the subsequent year). We understand the Tax Office intends to deal with all applications within five business days, but longer periods may apply if there are any issues. In any event, it is advisable to engage with the Tax Office early and openly to ensure that the no objection letter is received in good time, and to potentially mitigate any financial penalty that may be imposed. Carey Olsen has experience in this area and would be happy to assist.
Digital only outsourcing notifications from 29 June
The JFSC announced that from 29 June 2020 they will no longer be accepting paper outsourcing notification submissions and that they will only be accepting outsourcing notifications online via the myJFSC portal. The JFSC have not made any changes to the Outsourcing Policy and Guidance Notes.
The Financial Services (Disclosure and Provision of Information) (Jersey) Law 202-
This Law was adopted by the States on 14 July 2020 and comes into force on such day as the States may by Act appoint. The law will ensure Jersey’s compliance with the requirements of the 2012 FATF Recommendations in readiness for the Island’s next Moneyval assessment. We anticipate that the Disclosure Law will come into force towards the end of 2020. The initial impact of the Disclosure Law will be relatively minimal for most entities given that Jersey already has a central register of beneficial owners and controllers of entities. Beneficial ownership information will continue to remain private until international consensus is reached on the level and type of public information disclosure. Information on significant persons (at least company directors) is likely to become publicly available reasonably soon following enactment of the new law (for example in Q1 2021).
In June 2020, Carey Olsen issued a guidance note on the new Law, which can be accessed at: Update on Jersey register of beneficial owners, controllers and significant persons.
New digital Companies Registry to go live on 1 December 2020
On 6 August 2020 the JFSC announced that the Companies Registry is to go “fully digital” with effect from 1 December 2020, to coincide with the anticipated coming into force of The Financial Services (Disclosure and Provision of Information) (Jersey) Law 202-. A key change will be the replacement of the current paper-based annual return process with an online annual confirmation statement. The confirmation statement will be a read-only form that will detail the information held on the register at 1 January of the year in question. A nominated person will declare, on behalf of the entity concerned, that the information is accurate. The first annual confirmation statement will be due between 1 January 2021 and 28 February 2021. Further details are available on the JFSC website.
Fund fee rates from 1 July 2020
On 29 June 2020 the JFSC announced (amongst certain other things) that a 12.5% increase to AIF, CIF, CoBO, FSB and QSMA fee rates and a 2.7% increase to JPF annual fee rates would be applied with effect from 1 July 2020. The current fee notices published by the JFSC are available to view on the JFSC website.
COVID-19: Deadlines for Jersey public company accounts and auditor’s report (audited accounts)
On 15 May 2020 the Jersey Financial Services Commission (JFSC) announced that public limited companies that are concerned that they will not be able to meet the deadline for filing their annual audited accounts on account of the impact of COVID-19, may apply for an extension. Any such application should be submitted no later than one month before the end of the seven-month filing period after the applicable company’s year-end, and it should explain how the coronavirus has affected the company’s business and detail the reasons why the company is not able to file its audited accounts on time.
Coronavirus (COVID-19) resources
We have produced guides and briefings to assist you in assessing and mitigating the extensive challenges presented by the coronavirus.
This content is housed in a dedicated coronavirus (COVID-19) resources hub and includes guidance in relation to workplace disruption and employment law best practice, immigration, restructuring and insolvency, economic substance requirements and considerations for directors and lenders