JERSEY Law and Practice Contributed by: Christopher Griffin, Sophie Hancock, Tshogofatso Dhlamini, Rachael Barber, David Patterson and Mike Kushner, Carey Olsen
6.6 Rise of Peer-to-Peer Trading Platforms
7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity Market makers who are dealing in investments are exempt from registration for carrying on investment business under the Financial Ser - vices Law. This exemption is made pursuant to the Financial Services (Investment Business (Restricted Investment Business Exemption)) (Jersey) Order 2001 (the “IB Exemption Order” ). 7.3 Regulatory Distinction Between Funds and Dealers If a fund is carrying on the activities in 7.2 Requirement to Be Licensed or Otherwise Reg- ister as Market Makers When Functioning in a Principal Capacity , the fund is not required to obtain a separate regulatory licence, provided that such activities are provided for and on behalf of the fund. However, if a dealer is engaged in activities in 7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity , then the dealer requires an investment business licence under the Financial Services Law. 7.4 Regulation of Programmers and Programming Programmers who develop and create trading algorithms and other electronic trading tools are not themselves regulated. 8. Insurtech 8.1 Underwriting Processes Jersey does not have any material level of insur - ance businesses.
Historically, peer-to-peer trading platforms in Jersey have been highly competitive in compari - son with traditional trading platforms. Also, they have typically charged lower fees. In terms of regulation, the Financial Services Law expressly includes operating an investment plat - form (of any nature) as a class of “investment business” (see 2.2 Regulatory Regime ). 6.7 Rules of Payment for Orde r Flow There are no specific Jersey requirements beyond the (limited) rules set out in the IB Code. 6.8 Market Integrity Principles The Financial Services Law sets out criminal offences for matters such as insider dealing and market manipulation. By way of example, it is a criminal offence for any person (regardless of whether or not they are regulated in Jersey) to make misleading, false or deceptive statements, promises or forecasts in order to induce another person to: • enter into an arrangement that constitutes financial services business; or • exercise/refrain from exercising any right con - ferred by an investment. 7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations There is no specific regulation that exists for high-frequency and algorithmic trading plat - forms in Jersey.
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