Within the report, which, amongst other things, also revealed the number of enforcement actions taken by the body, the Jersey Financial Services Commission outlines a list of 21 “key tasks for 2012”. Included is a target to continue working on the island’s Review of Financial Advice, an initiative based on the UK’s Retail Distribution Review, with implementation possibly as early as next year.
The JFSC said the RFA seeks to “transition towards a new model of investment advice built around a move away from fees generated for advisers from commission based products, towards more transparent, fee paying advice, itself backed also by a higher level of professional qualification for practitioners”.
In 2010, the commission published a “position paper” which set out its plans to introduce the RDR-type regulation, the JFSC said it now intends to hold working party meetings with the industry to review responses to this paper and may issue a feedback paper this year. It added, once agreement has been reached, the industry will be further consulted on related changes to the Investment Business Code of Practice and relevant guidance.
The JFSC said it also expects to continue to spend a “significant proportion of time working with industry on responding to the Alternative Investment Fund Managers Directive” as well as monitoring the proposed revisions to the EU’s Insurance Mediation Directive.
Enforcement action
Enforcement action taken by the JFSC is also covered in the annual report, offering an insight into the type of activities detected and stopped by the JFSC’s enforcement division. It said, during 2011 it had again seen a “very high level of enforcement activity”, adding that a “record number of new cases” were tackled.
While the JFSC did not go into detail, it said many of the cases it tackled were “lengthy and complex”, although it added that a wide variety in the type of cases were seen during the year, with a “substantial rise in the number of internet based scams”.
The JFSC did however admit it struggled to deal with the increased level of enforcement activity which it noted was the most “at any given time in the commission’s history”. Indeed, the regulator said at times it had to draw from the supervisory divisions in order to meet the demand for the specialist resources required for its enforcement activity.
As a consequence of this, it said it “struggled to maintain the overall number of supervisory visits at the same level as seen in 2009 and 2010”.
Interestingly, the JFSC said the situation was exacerbated by staff turnover, as a recovering private sector once again saw the commission as “an interesting environment from which to recruit”.
To read a copy of the annual report click here
