Guidance on the Commission’s use of enforcement powers dated 25 July 2006 – This guidance note explains the Commission’s policy on its use of the enforcement powers contained in the regulatory laws. The Commission has to be satisfied that issues that pose a risk to the public and the Island’s reputation are given due attention and rectified as quickly as possible to reduce such risks.

The need for enforcement may arise where a person has contravened the regulatory laws or regulations, orders, codes of practice, directions or conditions made under these laws, or has committed other instances of misconduct (including breaches of the anti-money laundering legislation).

The Commission is committed to a fair and proportionate use of its enforcement powers. Where appropriate, the Commission will try to ensure that contraventions or instances of misconduct are rectified in conjunction with the person concerned through the normal supervisory processes, and try to agree the implementation of a remedial action programme to restore the person to compliance as soon as possible. This may involve agreed changes in corporate governance, management and internal controls, or agreement to discontinue some or all of the person’s operations or areas of activity.

Where such action is not considered to be sufficient or where co-operation is lacking, there may be a need for more formal enforcement action by the Commission involving the use of statutory powers.

The Commission has a range of powers that it can use as part of its enforcement process.2 The principal powers available to the Commission are as follows:

Warnings and Statements

1. The issuing of a private written warning to the board of directors and/or senior management of a firm or to individual principal person(s) setting out the Commission’s concerns as to the conduct of the firm and/or individuals and the consequences of repetition;

2. the issuing of a public statement of misconduct as described in the document “Guidance on the Commission’s use of public statements”;

Directions and Conditions

3. the issuing of a direction or licence condition to require a person to take (or not to take) certain action. Failure to comply with the direction or condition could result in prosecution ;

Applications to the Court

4. application to the Court for an injunction to restrain a person from committing or repeating a contravention, or an order to remedy a contravention;

5. application to the Court for a registered person’s business to be subject to supervision, restraint or conditions, and for the registered person to make good losses suffered by third parties as a result of specified contraventions of the regulatory laws;

6. application to the Court for the appointment of a Manager to take charge of a person’s affairs relating to financial services business;
Objections and Revocation

7. objection to a principal person or changes in shareholdings;

8. revocation of a registered person’s licence; and Criminal Prosecution

9. referral of a contravention of the law to the Attorney General for his decision on criminal prosecution. (The factors that the Commission would take into account in making such a referral are set out in its statement on Policy on Referrals to the Attorney General. Although this specifically relates to policy on referral of apparent cases of breaches of the Money Laundering (Jersey) Order 1999, the policy has more general application to other breaches of the regulatory laws.)

The particular enforcement measures, or combination of measures adopted, will depend on factors such as the seriousness of the contravention or instance of misconduct, the degree of cooperation and openness displayed by the person concerned and whether it is considered necessary or desirable for the matter to be brought into the public domain through the use of a public statement. Taking account of these factors, the Commission will consider each case carefully on its merits.

policy dated 25 July 2006

http://www.jerseyfsc.org/pdf/enforcement%20powers%20-%20july%202006.pdf