JERSEY Law and Practice Contributed by: Christopher Griffin, Sophie Hancock, Tshogofatso Dhlamini, Rachael Barber, David Patterson and Mike Kushner, Carey Olsen
2.2 Regulatory Regime Overview of Jersey Regulation
Regime” ). In short, if a person carries out certain activities listed in Schedule 2 of the Jersey POC Law, it may need to be registered under the Jer - sey POC SB Law, and comply with the require - ments of the Jersey AML Regime accordingly. Registration under the Financial Services Law and the Jersey POC SB Law can be an in- depth process, depending on the activity being undertaken. However, if a business is already registered under the Financial Services Law, a streamlined process of “deemed registration” is available under the Jersey POC SB Law. Digital Asset Businesses In 2023, Jersey introduced the virtual asset ser - vice provider (VASP) regime into the Jersey AML Regime. The FATF definition of “VASP” has been incor - porated verbatim into Schedule 2 of the Jersey POC Law. A VASP is defined by FATF as a natu - ral or legal person or arrangement that carries on the business of conducting one or more of the following activities or operations to, for, or on behalf of another natural or legal person or arrangement: • exchange between virtual (ie, digital) assets and fiat currencies; • exchange between one or more forms of virtual assets; • transfer of virtual assets; • safekeeping or administration of virtual assets or instruments enabling control over virtual assets; and • participation in and provision of financial ser - vices related to an issuer’s offer and or sale of a virtual asset. Therefore, if a digital asset business falls within the definition of a VASP, that business is required
A fintech business will need to be regulated by the JFSC if it is conducting “financial services business” under the Financial Services Law (ie, any of the classes listed therein by way of busi - ness), unless an exemption applies. The most relevant classes of “financial services business” for the fintech sector under the Finan - cial Services Law are: • “investment business” this includes dealing (or arranging for another to deal) in invest - ments, undertaking discretionary invest - ment management, or giving investment advice; “fund services business” this includes acting as a manager, adviser or other service provider to certain funds; “trust company busi- ness” this would be relevant for a custodian where it holds client assets on trust under the terms of an express trust; and “money service business” this includes operating a bureau de change, or transmitting or receiving funds by wire or other electronic means. Note that Jersey deliberately chose not to intro - duce digital-assets-specific legislation, but instead decided to regulate crypto/digital assets within its existing financial services legislation. Given the fast pace of development in this area, this has proven to be a wise decision. Jersey also has an AML regime, primarily con - stituted by the Proceeds of Crime Jersey Law 1999 (the “Jersey POC Law” ), the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 (the “Jersey POC SB Law” ), and supplemented by the Handbook for the Prevention and Detec - tion of Money Laundering and the Financing of Terrorism, issued by the JFSC (the “AML/ CFT Handbook” ) (together, the “Jersey AML
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