Determination Of The "Senior Management Function" In Jersey

Law FirmAppleby
Subject MatterFinance and Banking, Government, Public Sector, Financial Services, Money Laundering
AuthorMr Andrew Weaver, Gemma Palmer and Sarah McDonald
Published date30 January 2023

Last year we commented on the broadening scope of Jersey's civil financial penalties regime and the consultation launched by the Jersey Financial Services Commission (JFSC) on their proposed notice to define "senior management functions" in order to determine who is within scope of the new regime.

Following conclusion of the consultation, the notice designating senior management functions was published on 12 January 2023 (the Notice). The Notice determines which senior managers in a registered person (as defined in the Financial Services Commission (Jersey) Law 1998 (the Commission Law) will fall within the scope of the civil financial penalties regime should they be culpable in a registered person's significant and material contravention of the Money Laundering (Jersey) Order 2008 (MLO) or a JFSC Code of Practice.

CIVIL FINANCIAL PENALTIES

Article 21A of the Commission Law provides that where the JFSC is satisfied that a registered person (as defined in the Commission Law) has, to a significant and material extent, contravened the MLO or a JFSC Code of Practice the JFSC may impose a civil financial penalty on that registered person. Article 21A of the Commission Law also provides that if the JFSC is satisfied that the contravention by the registered person was:

  • committed with the consent or connivance of, or was attributable to neglect on the part of any person who performs (or performed) a senior management function, or
  • aided, abetted, counselled or procured by any person who performs (or performed) a senior management function,

the JFSC may impose a civil financial penalty on that person.

The Notice is published pursuant to Article 1(1) of the Commission Law. The publication of the Notice is significant in the context of the civil penalties regime, given how broad the label of "senior management" has the potential to be. Those working in financial services business in Jersey will, no doubt, be reviewing the Notice with a keen eye and assessing what it could mean for them. For those falling within scope of the Notice, this could ultimately mean personal financial accountability.

The Notice comes into effect on 13 March 2023 and in a statement published on the JFSC website, as a matter of best practice, registered persons should now identify which of their employees fall into one of the four categories of senior management function and those employees should be notified accordingly. This will necessitate reviews of committees, delegated functions...

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