JERSEY Law and Practice Contributed by: Christopher Griffin, Sophie Hancock, Tshogofatso Dhlamini, Rachael Barber, David Patterson and Mike Kushner, Carey Olsen
4.3 Sources of Funds for Fiat Currency Loans Subject to the lender complying with the appli - cable regulatory regime, AML requirements, and Jersey law generally (see 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities ), the source of its funding to make loans is not restricted. Accord - ingly, Jersey has a number of lenders who oper - ate on a peer-to-peer basis by raising capital through issuing securities, by taking deposits, and by securitisations. 4.4 Syndication of Fiat Currency Loans Jersey law does not specifically provide for the regulation of the syndication process, which usually takes place onshore. Lenders should therefore ensure they comply with the syndica - tion requirements of any relevant jurisdiction in which syndication is being conducted. There are no restrictions upon the use of exist - ing payment rails vis-a-vis the creation or imple - mentation of new payment rails, provided that payment processors obtain all necessary Jersey regulatory licences. The type of licence that is most likely to be required in this context is a money service business licence (see 2.2 Regu- latory Regime ) and an analysis would need to be carried out on a case-by-case basis as to whether any such licensing requirement would be triggered in the circumstances. A limited exemption is available for companies that have a turnover of less than GBP300,000 per financial period. However, they would still 5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails
one person to lend to another or to otherwise finance its activities) “in or within Jersey” will need to comply with the Banking Business (Jersey) Law 1991, as well as its associated legislation and code of practice. • By comparison, “pure lending” and the exten - sion of credit is not itself an activity that is currently regulated by the JFSC. If lending “as a business” (which is subjective) in or from within Jersey, the lender will be required to be registered under the Jersey POC SB Law, potentially supervised, and required to com - ply with the Jersey AML Regime generally. • Jersey tax-resident companies (including limited liability companies) and partnerships (including non-Jersey equivalents) are also required to comply with the Jersey economic substance regime. The activities of “banking business” (in summary, activity that requires it to be registered to carry on “deposit-taking business” ) and “finance and leasing business” (in summary, providing credit facilities of any kind for consideration, with some exceptions) are activities to which the economic sub - stance test may apply. • Lenders that are Jersey-incorporated or Jersey-established vehicles raising funds by way of capital will need to comply with the terms of the consent issued to them under the COBO (see 2.5 Regulatory Sandbox for more on COBO). 4.2 Underwriting Processes Jersey law does not specifically provide for the regulation of the underwriting process, which usually takes place onshore. Lenders should therefore ensure they comply with the under - writing requirements of any relevant jurisdiction in which the underwriting process is being con - ducted.
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