Annual review 2014 by Jersey Finance

Annual Review 2014

P2 | JERSEY FINANCE ANNUAL REVIEW 2014

Contents CHAIRMAN’s STATEMENT

By Robert Christensen

CEO’s STATEMENT

By Geoff Cook

PROGRESS AND ACHIEVEMENTS

BANKING

FUNDS

PRIVATE WEALTH

ISLAMIC FINANCE & PHILANTHROPY

CAPITAL MARKETS

INTERNATIONAL MARKETS

TRANSPARENCY & TAXATION

SUPPORTING JERSEY

STRATEGIC PROJECTS

KPIs Members FEEDBACK

DIGITAL SERVICES

AWARDS AND ACCOLADES 2014

JERSEY FINANCE ANNUAL REVIEW 2014 | P1

2014 Chairman’s Statement

I am delighted to present Jersey Finance’s review of 2014, our annual report on progress made during the year in strengthening Jersey’s finance industry.

I wish to start by saying that it is a great privilege to be introducing this review, having been appointed to the position of Chairman of the Board in June in succession to Jonathan White, who in his five years in the role carried out his duties with great distinction. I believe that the success of Jersey Finance in recent years and the growing respect around the world for Jersey as a leading international financial centre (IFC) is due in no small part to his efforts. Two well-researched and important reports were published in 2014, making significant contributions to the positioning of Jersey’s finance industry. The first, Moving Money, published by two leading US academics, Richard Gordon and Andrew Morris, and challenged criticisms of the role of IFCs and analysed their vital contribution to the global economy. The second was Jersey’s Value to Africa, produced by respected research firm Capital Economics, it set out the potential for Jersey to make a significant contribution to the development of Africa. There is more in the following pages on both reports, which rebut ill-informed attacks on IFCs and demonstrate their importance in underpinning sustainable global growth. Much of Jersey Finance’s resources are devoted to ensuring that our finance industry keeps pace with changes in a fast-evolving industry. Of particular note in 2014 has been the success of reforms introduced as a result of the EU’s Alternative Investment Fund Managers Directive (AIFMD), which have brought new business to the Island and enhanced our competitive position. We also continue to play a leadership role in international efforts to promote cooperation and transparency in taxation and related issues. The value of our contribution is now widely recognised.

By Robert Christensen Chairman, Jersey Finance

Finally thank the large cast of contributors to our work in 2014, which includes Jersey’s Government and the Jersey Financial Services Commission, my fellow directors and also our Members who give freely of their time and expertise. I would also like to thank Geoff Cook, Richard Corrigan and all the team at Jersey Finance for their work on behalf of the industry and the enormous contribution that they have made to enhancing Jersey’s reputation as a leading IFC. I look forward to supporting them over the coming year.

“Jersey Finance is well-prepared to deal with whatever the future holds”

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2014 Chief Executive’s Statement

It has been a productive year for Jersey Finance, in which we made progress on our journey to plan 2015 while dealing with continuing challenges facing Jersey’s finance industry.

“Jersey Finance has continued to play a leading role in the campaign to strengthen international financial regulation and increase transparency in taxation”

This was the second year of funding under the new threeyear budget process approved by the Jersey Government, which has provided the resources that have enabled us to complete many of the initiatives planned for 2014 and make progress on others. We have, for example, established our Shanghai launchpad office, which will allow us to extend our reach in Greater China. We also ramped up our capabilities across the Middle East and India by adding senior business development resources to our activities in these regions. We have welcomed to the Island a succession of ambassadors, government officials and business delegations from our target markets, and our annual flagship funds and private client conferences in London both attracted record audiences. For the second year running, Jersey was judged to be the IFC of the Year in both the Citywealth IFC Awards and the Wealthbriefing European Awards. We were also named the Best International Financial Centre in the Professional Adviser International Fund and Product Awards. Other awards for the Island included Best Fund Administration Centre by Investment Week, again for the second consecutive year.

By Geoff Cook Chief Executive, Jersey Finance

Geoff Cook provides regular views from the heart of Jersey Finance in his blog at www.jerseyfinance.je

On the home front, we welcomed the publication of the Government’s Financial Services Framework in April, which proposed policy developments that reflect changes in the industry and the financial environment since the crisis, and

JERSEY FINANCE ANNUAL REVIEW 2014 | P3

Jersey’s regulatory changes in response to the European Union’s new Alternative Investment Fund Managers Directive (AIFMD) are already proving attractive to this fast-growing class of fund managers. In June, we launched Moving Money, a robust defence by two US academics of the role of IFCs in the international financial system, which demolished prominent arguments about their allegedly malign impact. This was followed in November by Jersey’s Value to Africa, a report prepared by Capital Economics, the respected independent research firm. It identified the continent as a region of great economic potential, which could benefit from the ability of Jersey to channel much-needed investment and cultivate entrepreneurship in support of its continuing development. These two reports attracted media interest and positive comment, confirming the role of Jersey Finance as an ‘ideas lab’ for the IFC world. Meanwhile, Jersey’s Value to Britain, which we published in 2013, has continued to make waves in the local media, as well as in the UK and further afield. By quantifying Jersey’s contribution to the UK economy, it has proved invaluable in informing key opinion-makers and politicians of the contribution of Jersey’s finance industry to the British economy. Jersey Finance has continued to play a leading role in the campaign to strengthen international financial regulation and increase transparency. In the policy debate around public registers of beneficial ownership information, we surveyed our Members to understand the impact on business if Jersey adopted such registers, adding constructive empirical evidence in our response to the government consultation. We also lodged an extensive briefing with key UK advocacy bodies such as City UK and CBI setting out our reservations about the effectiveness of the proposals and the expected detrimental impact on investment into the UK. We explained how centres such as Jersey had tried and tested mechanisms to ensure that beneficial ownership information is readily

available to authorities when necessary. We also used our UK network of contacts in financial services and support sectors to ensure a wide readership for the briefing. 2014 was notable for Jersey’s first full general election, with all Members of the Jersey Government elected in a single day. We offer our congratulations to those who were successful and look forward to working with the appointed ministers. One pressing concern of the financial services sector is the availability of suitably qualified staff, which could have an impact on its long-term growth. We have introduced a regular survey of our Members so they can contribute to the immigration and population debate, and have been encouraged to learn of their growth plans and the quality of service they receive from the Population Office. All of this has been achieved against a backdrop of some significant changes for Jersey Finance at both executive and board level. We welcomed Richard Corrigan as Deputy Chief Executive in 2014 and filled important roles in our offices in target markets. We also welcomed Robert Christensen as the new Chairman of the Board; he brings over 35 years of experience in Jersey, was instrumental in the creation of Jersey Finance and has been a pillar of support on the board. He succeeded Jonathan White whose contribution over the last five years has been immense. I want to conclude by thanking our Members for all their support in 2014 and to congratulate them on their achievements, which have contributed to maintaining Jersey’s leadership position as an IFC. Furthermore, we take heart from the results of last summer’s Ipsos MORI poll of Members, influencers and gatekeepers, which provided very positive feedback on our work and visibility, together with valuable suggestions for the future, and we will be working hard to further improve our performance and impact in 2015.

“For the second consecutive year, Jersey was judged to be the International Financial Centre of the Year”

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Progress and Achievements Chief Ministers of Jersey and Guernsey visit Brussels Jersey hosts a visit by Turkey’s Ambassador to the United Kingdom, His Excellency Unal Çeviköz Jersey’s Business Tendency Survey finds an overall increase in business activity in Jersey compared with the previous quarter Jersey signs a Tax Information Exchange Agreement (TIEA) with Hungary

Jersey, Guernsey and Isle of Man Chief Ministers reaffirm their commitment to working together on key international issues Jersey named ‘International Finance Centre of the Year’ in the Citywealth IFC Awards 2014 for the second consecutive year Jersey Finance sponsors and speaks at the Financial Times International Finance Centre conference in Toronto, Canada Jersey professionals attend the Mining Indaba Conference 2014 in Cape Town, South Africa

Jersey’s Tax Information Exchange Agreement with Latvia comes into force Crown Dependencies are described as being at ‘the forefront’ globally of the agenda for tax transparency by the Exchequer Secretary to the UK Treasury Jersey adopts sanctions against 18 individuals in light of the Ukraine conflict Jersey signs a Tax Information Exchange Agreement with Belgium Jersey Finance’s annual Funds Conference in London attracts a record audience Jersey joins early adopters Common Reporting Standards group

Jersey Finance announces the appointment of Richard Corrigan as its new Deputy Chief Executive The Jersey Government publishes a Financial Services Policy Framework Jersey’s Chief Minister meets Chinese Government and business representatives in China The JFSC and China’s Securities Regulatory Commission sign a Memorandum of Understanding UK Prime Minister David Cameron writes to all the Crown Dependencies, welcoming their work to raise standards of transparency

Jersey’s Chief Minister visits the UAE to meet government and business representatives to sign a Memorandum of Understanding Jersey is named ‘International Finance Centre of the Year’ in the Wealthbriefing European Awards 2014 Jersey hosts a delegation of Arab ambassadors on a two-day visit Jersey’s Standard & Poors AA+ credit rating is confirmed Record audience attends Jersey Finance’s annual Private Client Conference in London

JERSEY FINANCE ANNUAL REVIEW 2014 | P5

Jersey hosts a four-day conference and seminar in partnership with the US Securities and Exchange Commission Jersey Finance launches Moving Money, highlighting the essential role of IFCs such as Jersey play in the global economy Jersey is named ‘Best International Financial Centre’ in the Professional Adviser International Fund and Product Awards 2014 Jersey Finance establishes a launchpad presence in Shanghai Jersey puts regulations in place to confirm automatic tax information exchange with the US and UK The net asset value of Jersey regulated funds passes the £200bn mark during a stable quarter Jersey Finance announces Robert Christensen as the new Chairman of its Board Jersey’s 2013 Survey of Financial Institutions is published, reporting the fourth-best performance figures in 15 years Jersey’s Business Tendency Survey finds that the finance industry is the strongest and most optimistic it has been in five years Jersey private placement registrations surge as the AIFMD transitional period ends Jersey’s Companies Registry wins an award from the International Association of Commercial Administrators for its Security Interests Register Jersey Pensions Association is formed The Jersey Government outlines a package of measures reinforcing the message that Jersey does not welcome abusive tax-planning structures Jersey’s Tax Information Exchange Agreement with Luxembourg comes into force Jersey Foundations record a significant rise in the number being formed on the fifth anniversary of their creation Jersey introduces further innovations to its Companies Law Jersey hosts a visit by China’s Ambassador to the United Kingdom, His Excellency Liu Xiaoming

The net asset value of Jersey regulated funds reaches the £205bn mark during a stable quarter Jersey hosts a Chinese business delegation Jersey is named ‘Best Fund Administration Centre’ by Investment Week for the second consecutive year The Jersey Government confirms changes to income tax law to modernise pensions and open new lines of international pensions business

Jersey Finance sponsors the fifth International Capital Conference in Beijing and the International Fiscal Association convention in Mumbai Jersey’s Tax Information Exchange Agreement with Switzerland comes into force Jersey’s Aircraft Registration Law receives Privy Council approval Jersey joins more than 50 countries in Berlin to sign up as an early adopter of the OECD Common Reporting Standard

Jersey Finance publishes the Jersey’s Value to Africa report Jersey Finance’s Funds and Private Client Roadshows are held in the Middle and Far East Jersey Finance sponsors the STEP Global Congress and the Legal Week Private Client Europe Forum The Charities (Jersey) Law receives Privy Council consent Regulatory exemption for Managed Accounts is confirmed by Ministerial Order

Jersey signs a Tax Information Exchange Agreement (TIEA) with Romania The JFSC announces that Jersey funds figures reached a five year high, increasing by £5 billion in the third quarter of 2014 A new exemption is added to Jersey’s Financial Services Law, designed to simplify and encourage the establishment of hedge fund management businesses on the Island

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Banking The number of banking institutions represented in Jersey was level at 26 in 2014, with the total value of bank deposits at around £137bn. There was a drop in the number of individual banking licences from 42 to 33, largely as a result of banking groups simplifying and consolidating the number of licences they hold for individual branches and subsidiaries: there were exactly the same number of parent banking groups as in 2013. The small drop in the total sterling value of deposits held in Jersey reflected the strengthening of sterling, which decreased the sterling value of foreign-denominated deposits. Jersey’s banking sector performed well in 2014, against a challenging backdrop globally and in competitor jurisdictions of retraction, retrenchment and de-risking. Average core capital in Jersey’s banks was 15.7% of risk-weighted assets in the third quarter of 2014, almost more than 50% above the Basel standard minimum. Discussions with potential arrivals on the Island continue, with a varied and full pipeline of meetings with banks. During 2014, Jersey Finance participated in several marketing events to support the Island’s banking sector. In April, we again sponsored the Adam Smith conference Wealth Management and Private Banking: Russia & Beyond, held in Moscow. We also sponsored the Foreign Banks Conference organised by the Association of Foreign Banks and the British Bankers’ Association in London in September, as well as the reception.

JERSEY BANKING IN NUMBERS as of Sept 14

Extending Jersey’s reach in banking The Government of Jersey published a Policy Framework in April 2014, setting out proposals for a review of the legislation, policies and practices governing the Island’s financial services industry. For the banking sector, the most notable proposed policy change was to the requirement that the Jersey Financial Services Commission (JFSC) should only license the world’s top 500 banks for deposit-taking. The world’s banking environment is also changing in other ways, with growth in cross-border capital flows and the accumulation of wealth in emerging markets. Banks from highgrowth economies can rise rapidly up the international league table, particularly those establishing a larger global footprint or deepening their range of services. Removing the top 500 requirement would offer greater opportunities for such banks to base their international operations in a jurisdiction with a regulatory system that is widely seen as a global leader. The JFSC published a significantly revised bank licensing policy to make it far more flexible, particularly if risk to retail depositors could be mitigated. The requirement for a bank’s parental group is now an expectation and it features in the world’s top 1,000 for deposit-taking. The Commission’s earlier emphasis that a bank should be of systemic importance in its home jurisdiction and that the home jurisdiction be capable of supporting the bank has been dropped, as has the previously stated expectation that it should have experience of operating beyond its home borders.

BANKING LICENCES

JERSEY FINANCE ANNUAL REVIEW 2014 | P7

The Commission said the revised licensing policy reflected new realities and provided a workable and flexible framework for a wide variety of banks to operate within the robust regulatory framework to which the Island remained committed. Further changes were likely in due course, in line with local strategies and international developments.

BANKING DEPOSITS BY RESIDENCE OF DEPOSITORS

8% Others

North America

Far East

Protecting the role of Jersey

47%

14 %

Discussions with the UK Treasury continued in 2014 on practical issues affecting Jersey as a result of the creation of ring-fenced banks recommended by the Independent Commission on Banking (Vickers) Report. Draft UK subordinate legislation published in the summer confirmed that only UK banks would qualify to be inside the ring fence. With Jersey banks excluded, the detailed implementation of the 2013 Banking Reform Act will be a continuing challenge for the industry in 2015.

Jersey and UK

Middle East

15% European (Non-EU)

8% Other EU Members

Jersey and UK

Far East

Other EU Members

North America

European (Non-EU)

Others

Middle East

GEOGRAPHIC ANALYSIS OF BANK LICENCES

MIDDLE EAST DEPOSITS IN JERSEY 200

VALUE (£ BILLIONS)

NUMBER

10 8 6 4 2 0

150 100 50

4,770 EMPLOYEES

AS IA

CA RI AF

AM NO ER RTH IC A M ID D LE EA ST SW IT ZE RL AN D

SEP-13

ALL OTHER

DEC-13

MAR-14

JUN-14

EUROPEAN (NON-EU)

£137

BILLION

IN DEPOSITS

SEP-14

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Funds The total net asset value of Jersey funds reached £205bn in the third quarter of 2014 as market conditions picked up. The funds sector reported in June that the total value of regulated funds under administration had again climbed over £200 billion, despite dipping slightly below this level during the first quarter. This was due to a general improvement in market conditions, specifically in property fund valuations. In addition, some new funds were reported for the first time in 2014, with funds recently established also contributing to the increase. The total number of regulated collective investment funds decreased from 1,337 to 1,304, which was a consequence of certificates for funds that had become inactive being relinquished. The private placement fund regime continued to be successful with consent granted for 30 funds since its inception. Funds under the unregulated funds regime increased to 204 over the last year, of which 133 were active. Overall, Jersey continued to attract new funds during 2014, including increased manager relocations. In particular funds in the private equity and venture capital area rose 67.5% on 2013 and there has been a significant increase in Jersey based fund promoters over the past five years. As of June 2014, there were 123 managers based here up from 70 five years ago, which we anticipate is due to trends such as inward migration, establishing substance and the impact of AIFMD. Our flagship Annual Funds Conference, held in London in March, drew an audience of more than 400 people, the biggest yet. A Jersey Finance poll at the conference found that funds professionals expected the biggest growth areas would be in real estate and private equity, with most opportunities coming from outside Europe. Highlights included a keynote session from the award-winning FT journalist and author Gillian Tett, who discussed global wealth inequality, and Martin

JERSEY FUNDS IN NUMBERS as of Sept 14

Gilbert, Chief Executive of Aberdeen Asset Management being interviewed by Jersey Finance CEO Geoff Cook. We also co-sponsored networking events staged by HedgeBrunch, which bring together people working in the hedge fund and private equity sectors around the world. We sponsored the BVCA Women in Private Equity Breakfast in October and were the principal sponsor of the UK Law Society’s International Marketplace Conference in July, both in London. We also continued to sponsor the SuperReturn series of private equity conferences in regional financial centres: Beijing in April, Hong Kong in September, Dubai in October, and Cape Town in December; also September’s CFO/COO Forum in Amsterdam. Finally, Jersey was named the Best Fund Administration Centre by Investment Week in September, for the second consecutive year, from a shortlist that included Luxembourg and Dublin. We continue to work with the Jersey Funds Association on the messaging and marketing of our funds proposition.

AIFMD The transitional phase for the implementation of the EU Alternative Investment Fund Managers Directive came to an end in the summer, revealing Jersey’s strong position in providing three options for managers under the new arrangements: ■ Business as usual, with no change for Jersey funds marketing outside the EU or whose EU marketing has been completed. ■ A private placement approach for non-EU funds being

£205

BILLION

NET ASSET VALUE

JERSEY FINANCE ANNUAL REVIEW 2014 | P9

“Jersey was named Best Fund Administration Centre in September by Investment Week for the second consecutive year”

■ A fully AIFMD-compliant strategy for marketing throughout the EU as soon as third-country passporting becomes available. It has already become clear that the AIFMD passport is not automatically the favoured choice of private equity managers. The private placement option that Jersey offers can provide the access to the EU they need and with added flexibility. Just months after AIFMD came into play, 176 Jersey funds and 49 Jersey fund managers were already actively marketing into the EU with JFSC authorisation under the private placement regime. The value of private equity assets under administration in Jersey continues to rise steadily, as major fund houses move to or expand on the Island. Europe’s largest private equity fund enjoyed its final US$10bn closing in 2014 from a Jersey management platform, just one of several recent multi-billion dollar Jersey fund launches. Having opened an office in Jersey in June, Carne Group received authorisation for an independent AIFMDcompliant management company in Jersey, the first to be approved outside the European Union. Thus, private equity managers can comply with the AIFMD regime while maintaining a fund in an offshore non-EU jurisdiction. Jersey fund managers will continue to enjoy approved access to UK investors following confirmation from the UK Treasury that its private placement regime will remain in place until 2018. Managers can now establish their management entities in Jersey and meet EU requirements while at the same time serving the rest of the world in a lower cost non-AIFMD environment. We believe that this will prove attractive to UK fund promoters who can use Jersey as part of a ‘wait

204

UNREGULATED FUNDS

and see’ strategy, continuing their business as usual while assessing the full impact of AIFMD.

Technical developments An order made in 2014 under the Financial Services (Jersey) Law 1998 made it much easier for fund managers to offer qualified segregated managed accounts (QSMAs), which are already proving popular among investors. Previously, those managing such accounts were subject to a more onerous regulatory and tax burden. They can now be exempted from the requirement to be registered to carry out investment business, thereby benefiting from the zero corporate income tax rate. Jersey Finance worked closely with the JFSC on an innovative and focused electronic consultation seeking detailed consideration of the regulator’s proposals. This provided swift and valuable feedback on the suggested approach in what is a very complex technical area, and prepared the way for the Ministerial Order enacting the necessary amendments. In a further technical development, the JFSC announced policy changes in August 2014 for the licensing of fund services businesses involving LLPs. This proved to be a positive and welcome step in the jurisdiction’s ability to cater for a wider variety of fund structures.

NET ASSET VALUE OF FUNDS IN JERSEY VALUE (£ BILLIONS)

marketed to professional investors in member states, provided that certain basic transparency, disclosure and reporting obligations of the Directive are followed.

£200 £150 £100 £50 £0

SEP-13

DEC-13

MAR-13

PERIOD

JUN-14

SEP-14

1,304 REGULATED FUNDS

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Private Wealth Jersey celebrated the 30th anniversary of the Jersey trusts law in 2014 with a record turnout for our annual Private Client Conference in London. Over the last three decades, the Trusts (Jersey) Law 1984 has established the Island as a leading specialist centre for private client and estate planning work. The ‘Jersey’s Value to Britain’ 2013 study estimated that around £400 billion of assets are held in Jersey trusts, settled by private individuals and families. It also identified a further £450 billion of assets settled by corporate and institutional clients in Jersey trusts and special purpose vehicles. In addition, it said the Island’s special international status as a Crown Dependency was keeping Jersey’s trust and other asset vehicle business inside the sterling area where it provided enormous benefit to the UK. Changes in global wealth patterns, regional unrest, political pressure and regulatory shifts have extended the appeal of Jersey trusts far beyond our traditional markets. Wealthy individuals and their families, particularly in emerging markets, are finding that Jersey offers tried and trusted vehicles to support their dynastic planning, personal and family wealth management, and business activity. In a fastevolving international financial environment, the Island’s political neutrality, stability and well-regulated framework offer substance, expertise and a rational response to demands for greater transparency. It is noteworthy that over the 30 years since the law was passed, there have been just six sets of amendments. These have included such innovations as trusts with unlimited duration, the ability for settlors to reserve powers and the introduction of non-charitable purpose trusts. The latest amendments in 2013 codified the law on mistake and the ‘rule in Hastings-Bass’, providing trustees and beneficiaries with a welcome alternative in rare situations of inadvertent

JERSEY PRIVATE WEALTH IN NUMBERS as of Sept 14

error. This gave Jersey trusts a notable advantage over trusts governed by the laws of other jurisdictions, and the move has recently been replicated by Bermuda and is under consideration by a number of other competitors. Having a robust, sophisticated legal framework in place has given Jersey the opportunity to position itself strongly in delivering a full range of private client services, from simple trusts and underlying company structures for UK families, to high value and more complex structures involving trusts, companies, limited partnerships, LLPs and foundations for international families and corporates. All of this is underpinned by comprehensive but proportionate regulation, which has evolved following several decades of experience in fighting financial crime including tax evasion. It was therefore no surprise that our May 2014 Private Client Conference in London attracted more than 350 attendees. With the theme of ‘A World of Opportunity’, it focused on the strength of Jersey trusts and foundations in the world of philanthropy, as well as the government’s commitment to update Jersey’s charities regime. Stephanie Flanders, the former BBC Economics Editor, who is now Chief Strategist for the UK and Europe for J.P. Morgan Asset Management, gave the keynote speech on the UK economy and the global recovery, and moderated the panel sessions. Further to our own flagship conference, we were involved in 20 other private wealth events around the world, including the Transcontinental Trusts Geneva conference in June, where JFSC Director General John Harris was a panellist, and the Law Society’s International Marketplace London Conference in July. We were also delighted to continue working with

269

JERSEY FOUNDATIONS CREATED SINCE THE FOUNDATION LAW WAS INTRODUCED

JERSEY FINANCE ANNUAL REVIEW 2014 | P11

“Wealthy individuals and their families, particularly in emerging markets, are finding that Jersey offers a tried and trusted vehicle”

the Society of Trust and Estate Practitioners, sponsoring and speaking at its November Global Congress in Miami.

Foundations 2014 also marked the fifth anniversary of the Jersey Foundation, another Crown Dependency innovation. The rate of formation of new foundations picked up, with the number created reaching 269 in 2014, four times the total in the other Crown Dependencies combined. Around a third are estimated to have charitable or philanthropic objectives, and Jersey foundations are finding particular favour with clients from European civil law jurisdictions, Switzerland, Russia, South America and the Middle East.

Pensions Jersey’s tax regime was amended in September to simplify and modernise the taxation of pensions and to increase the flexibility of the Island’s pensions regime. Together with changes to the associated guidance, these amendments will create new opportunities for employers and employees in Jersey, such as flexible retirement and partial fund transfers. The changes also allow for non-residents to participate in, and benefit from, the same schemes as Jersey residents. This will be of particular interest to the UK expatriates who may be looking to transfer their UK pensions, as well as international employers who wish to concentrate their pension provisions in a single well-regulated jurisdiction.

£400

BILLION OF ASSETS SETTLED BY INDIVIDUALS AND FAMILIES IN TRUSTS

The Jersey Government has also announced plans for the introduction of a pensions regulator, and a Jersey Pensions Association has been formed to promote, develop and provide stewardship to the Island’s industry.

1,200

MEMBERS OF THE SOCIETY OF TRUST AND ESTATE PRACTITIONERS

30th ANNIVERSARY

1984

888

2014

THE TRUSTS (JERSEY) LAW

REGULATED TRUST COMPANY BUSINESSES

888 REGULATED TRUST COMPANY BUSINESSES

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Islamic Finance & Philanthropy Philanthropy Jersey has a justifiable reputation as a leading centre for the management of philanthropic ventures, offering a range of attractive and flexible charitable and non-profit vehicles. In addition to its innovative trusts, it has flexible companies legislation, one of the widest arrays of partnership vehicles and a fast-growing foundations sector. Trust law allows for both charitable and non-charitable trusts, which can focus on activities that may not be strictly defined as charitable but are nevertheless altruistic in nature, such as for humanitarian, ecological and research causes. In this context, legislation approved by Jersey’s Government in July 2014 introduced a framework for charities, drawn up after extensive consultation with Jersey Finance. The highlights of The Charities (Jersey) Law include: ■ The introduction of a charity test, determined by the Charity Commissioner for all registered charities, which can only have charitable purposes and must provide public benefit. ■ An entitlement for registered charities to receive charitable tax reliefs and to call themselves a charity. ■ A requirement for the governors of a charity (e.g. trustees, directors or foundation council Members) to ensure that it acts in accordance with the law, pursues the stated charitable purposes and delivers public benefit. ■ Restrictions on the use of the terms ‘charity’ and ‘charitable’, with only a registered charity being able to call itself a charity, and regulations being developed to restrict the use of the term charitable by non-registered entities that undertake any public fund-raising activities.

PIONEERING ISLAMIC FINANCE WITH A WIDE RANGE OF TAILORED STRUCTURES

The new law achieves a sophisticated balance between the flexibility required by the industry and the governance and accountability required by the giving public. It has been tailored to meet the needs of a wide variety of charitable and philanthropic organisations, from small local charities to big global philanthropic organisations. We expect the introduction of this law – and its implementation in 2015 – to strengthen Jersey’s attraction as a leading jurisdiction for philanthropic wealth management, of particular interest to the growing number of high net worth individuals, family offices and their advisers around the world, who are increasingly engaged in this area.

Islamic Finance Jersey offers investors a flexible legal system, a measured regulatory regime and a tax-neutral environment that positions the Island at the forefront of Islamic Financial Services. The Island’s funds sector is a leader in Islamic asset management, and there is expertise in the industry with regards to the creation of Special Purpose Vehicles that can be used with a variety of Shariah-compliant capital market transactions, including sukuk (Islamic bonds). Jersey trusts have proved appealing to families and charitable/philanthropic institutions from the Gulf Region where the institution of the Waqf is not dissimilar. The Jersey Foundation has also attracted interest from the region. One example of such a transaction with Jersey advisers in 2014 was the formation of a Shariah-compliant syndicated investment and financing structure to acquire a commercial property in London for around £100m. Another transaction involved advice on successive issuances of sukuk trust certificates by a Jersey company for listing on the London Stock Exchange.

269

APPROX

FOUNDATIONS

CREATED SINCE THE FOUNDATION LAW WAS INTRODUCED

HAVE A CHARITABLE OR PHILANTHROPIC PURPOSE

JERSEY FINANCE ANNUAL REVIEW 2014 | P13

Capital Markets Jersey remains the jurisdiction of choice for corporate entities seeking to list, with the greatest number of FTSE 100 companies registered outside the UK. The Island is home to 38 companies listed on the main London Stock Exchange, 57 quoted on AIM, which is the greatest number of AIM listed companies outside the UK, and one on the Specialist Fund Market. The remainder are listed on Euronext Amsterdam, the stock exchanges in Luxembourg, Hong Kong and Toronto, as well as the New York Stock Exchange and NASDAQ. The total market capitalisation of the 110 listed companies rose to £269 billion over the course of the year to the end of September 2014, with the 96 quoted in London valued at almost £146 billion. One highlight of 2014 was the £1 billion Initial Public Offering on the London Stock Exchange of Kennedy Wilson Europe Real Estate, the second largest real estate IPO in London’s history. After making its debut in February, the company raised an additional £352 million through a secondary offering in October. Jersey companies joining AIM in 2014 have included: online fashion retailer Boohoo.com, which undertook a corporate reorganisation and achieved a £300 million listing; Rame Energy, an international energy consultant, engineer and power generator, which joined in April with a £17.1 million market capitalisation; Galasys Plc, a leading provider of ticketing systems and solutions to the fast growing theme park industry in Asia, which achieved a market cap of almost £15 million; and GTS Chemical Holdings Plc, a speciality chemicals producer and the largest Chinese manufacturer of ammonium sulphite. Just under 20% of Chinese companies currently listed on AIM were incorporated in Jersey.

JERSEY CAPITAL MARKETS IN NUMBERS as of Sept 14

Technical developments Further innovations to Jersey’s 1991 Companies Law were introduced in the Companies (Amendment No. 11) Law, which came into force on 1 August. The culmination of several years of work by industry and government, the amendments introduced further flexibilities, clarified the existing law, expanded the options and choices for investors and ensured that Jersey continues to provide the fullest range of vehicles, both incorporated and unincorporated. The changes include an ability to introduce a statutory demerger regime, allowing a company to split into two or more surviving companies, and an alternative ‘out-of-court’ reduction of capital procedure for both private and public companies. Other amendments further increased the flexibility surrounding overseas branch registers and dealings with depositary receipts. A Ministerial Order made in September provided further flexibility for Jersey companies seeking to list on exchanges in the US, France and Canada, dispensing with certain written share transfer and delivery requirements under the 1991 Companies Law. Changes relevant to listings included amending the overseas branch register rules to permit companies to include the details of any shareholder and a new regime for the purchase of depository certificates. As part of our campaign to develop capital markets business as a ‘fourth pillar’ of the Island’s finance industry, every opportunity has been taken to reinforce Jersey’s attractions for listings and other such transactions. The inaugural Jersey Finance Asia Roadshows in November provided an opportunity to present our capital markets offering in Hong Kong, Kuala Lumpur and Singapore.

110 £269

COMPANIES LISTED WORLDWIDE

BILLION

MARKET CAPITALISATION

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International Markets Following on from the Finance Industry Strategic Jurisdictional Review in 2013, Jersey Financeâ&#x20AC;&#x2122;s marketing programme has been refocused on a three-year plan to target four market areas. Top growth priorities are the promising frontier markets of the United Arab Emirates and Saudi Arabia, followed by the future options markets of India, China and Brazil. Next are the very important traditional markets of the UK and Western Europe, which although growing more slowly, still account for a large share of the assets and deposits in Jersey. Finally, there are the secondary frontier markets which look set to be part of the next group of growth economies: South Africa, Nigeria and Kenya. Our Asia Roadshow in November visited key markets across the Asia-Pacific region and the Middle East. We took key messages from our annual Private Client and Funds conferences to intermediaries, gatekeepers and clients in Hong Kong, Kuala Lumpur, Singapore and Dubai. The tailored series of breakfast and lunch events featured expert speakers, including Richard Corrigan, Deputy Chief Executive of Jersey Finance.

1 Our engagement groups for target markets harness the expertise of Jersey Finance Members at three levels:

MARKET STRATEGY Meet quarterly and bring together senior Jersey-based executives with international responsibilities and representatives of the Islandâ&#x20AC;&#x2122;s trade associations. The group supports the implementation of our international strategy, providing early advice on market changes.

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Delivering success in overseas markets depends heavily on our human capital The first category – the key frontier markets – attracts the biggest share of Jersey Finance resources, with dedicated management capacity, offices in key markets and a regular presence of senior staff at conferences, on delegations and generally taking advantage of networking opportunities. After the refocusing of our marketing programme in 2013, we are now well through the introduction of additional headcount to the team to support our efforts in the growth markets of Saudi Arabia and Africa, while reinforcing our presence in London. Our Business Development team conducts regular visits to various markets in order to raise the profile of Jersey’s finance industry and keep in touch with key contacts who advise and intermediate on capital flows.

JERSEY ADVISORY

COMMUNITY OF INTEREST

Comprised of senior individuals operating in the key target markets who can provide authoritative intelligence on in-market developments and advise on strategic implementation. These are experts in Jersey and competitor IFCs who meet twice a year and support the development of our approach.

Comprising Jersey-based individuals with specific experience and interest in the target subject of each group. They meet twice a year and support the exchange of market intelligence, identifying opportunities as well as potential barriers.

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Markets in Detail

TRADITIONAL MARKETS

UK, Western Europe Although the UK and mature Western European markets are expected to continue growing, albeit more slowly than growth markets, we will continue to devote significant resources to safeguarding these traditional regions for banking, funds, private wealth and capital markets. Consequently in 2014 we appointed a UK-based Business Development Manager to lead these efforts. We have continued to work through marketing events and sponsorship programmes to raise and re-affirm Jersey’s profile in the UK. Our flagship London conferences to promote the funds and private wealth sectors both attracted record attendances in 2014, and we continue to engage with London-based intermediaries, particularly the fund and banking community, to ensure they are aware of everything that the Island has to offer, and of our leadership position on tackling transparency issues. We have also engaged positively with Europe’s automatic exchange of tax information agenda, continuing with initial support of the G5 project, a pilot scheme of the UK, France, Germany, Italy and Spain, and continued engagement as it became part of the OECD’s Common Reporting Standards work.

KEY FRONTIER MARKETS

UAE, Saudi Arabia, Russia Jersey Finance’s priority in these markets, where share of global financial wealth is expected to outstrip that of advanced economies, is to strengthen awareness of the Island’s 50-year history as a leading international financial centre and to highlight the finance sectors that are of interest in each country. We consistently review financial markets in terms of economic opportunity. For the Gulf Region, we also focus on banking and private wealth, as well as funds, and, of course, Islamic Finance. In 2014, two Business Development Directors were appointed to cover the GCC states and India, both based in the UAE, which provides them with a regional springboard for Jersey Finance’s business development activities in the UAE, other GCC states and India. In May, Jersey received a delegation of Arab ambassadors for a two-day visit, which included meetings with senior finance industry representatives. Relationships with key figures in the region were strengthened through a visit to the Gulf by the Chief Minister, the Treasury and Resources Minister, the Minister for International Affairs and the Director of Financial Services for the Jersey Government.

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FUTURE OPTIONS

India, China, Brazil Banking, funds and private wealth are key sectors in India, China and Brazil, with the addition of capital markets for China.

SECONDARY FRONTIER MARKETS

Nigeria, Kenya, South Africa Secondary frontier markets are a group of economies that are anticipated to provide the next phase of global economic growth. Africa is the fastest growing global region and, for some years, our attention has been turned towards South Africa. However countries including Kenya and Nigeria also hold significant promise, and our ‘Value to Africa’ report, detailed later in this review, holds some fascinating insights in relation to what role Jersey can play in the development of the continent. Private wealth is a focus across the board, while funds and additional markets are a further focus in South Africa. In February, Jersey professionals visited Cape Town to attend the Mining Indaba Conference 2014, the world’s largest gathering of financiers, investors, mining professionals and government officials. In addition, we sponsored the SuperReturn Africa event in Cape Town in December. We have also been engaged in an active programme of visits to connect with financial and professional services firms in the region, as well as working with UK-based advisers specialising in African markets.

Jersey’s Chief Minister Senator Ian Gorst led a delegation in April to meet Chinese government and business representatives in Beijing and Shanghai for discussions that included financial services, the digital economy and trade. The delegates included representatives of the Jersey Government, Jersey Finance and the Jersey Financial Services Commission. The JFSC and the China Securities Regulatory Commission signed a Memorandum of Understanding to help boost investment into and out of China, and to establish a framework for mutual assistance and the exchange of regulatory information. The Chinese Ambassador to the UK, His Excellency Liu Xiaoming, visited Jersey in the summer, holding a roundtable discussion at Jersey Finance with senior industry representatives. This was followed in September by the visit of a delegation of senior Chinese business people, whose meetings included one with representatives of the local financial services community. In October, following the appointment of a Hong Kongbased Business Development Director, Greater China, and a Project Manager for our new launchpad office in Shanghai, Jersey Finance held a media roundtable in Hong Kong, hosted by Jersey Finance’s Chief Executive Geoff Cook, to mark the fifth anniversary of our presence there. Brazil afforded a reduced priority in 2014 due to a more challenging outlook, but we continue to look at the jurisdiction for opportunities.

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Transparency & Taxation Tax transparency and other taxation issues remained a major theme of Jersey Finance’s work in 2014, areas in which we are determined to show leadership internationally. International regulation Continuing progress has been made on the new standards of international financial regulation developed since the financial crisis. Jersey has introduced regulations necessary to implement the measures needed as a consequence of the US Foreign Account Tax Compliance Act (FATCA) and the agreement with similar requirements between Jersey and the UK. Jersey Finance has continued its involvement in discussions and consultations over the legislation, associated guidance and other consequential requirements. There has also been a great deal of work in preparation for the periodic assessment of Jersey’s compliance with international standards to counter money laundering and terrorist financing, as required by the Financial Action Task Force (FATF). Previously conducted by the IMF, the work will be carried out on this third occasion, in January 2015, by MONEYVAL, a body of the Council of Europe. Jersey Finance has facilitated many of the consultations carried out by the Jersey Financial Services Commission surrounding the preparations for this assessment.

Base Erosion & Profit Shifting (BEPS) Accusations that international companies are shifting their profits to low tax jurisdictions have grown amid concerns that the tax bases of other countries are being eroded. A two-year study launched by the Organisation for Economic Cooperation and Development in 2013 is due to produce final proposals to curb such practices by September 2015. Meanwhile, the European Commission is investigating the tax arrangements offered by some Member States to particular companies that appear to reduce their tax liabilities. The preliminary proposals in seven of the 15 parts of the OECD work were presented to the G20 Summit held in Brisbane in November. Until the other eight sets are released, the full impact of the proposals is difficult to determine. However, our initial assessment is that Jersey should be less affected than other jurisdictions because our low tax business model involves few of the Double Taxation Agreements that will need changes to implement the proposals. Any move towards taxing profits where economic value is created is likely to involve greater demonstration of substance and economic activity. We therefore expect that while BEPS will have an impact on Jersey, our long standing position as a jurisdiction of substance means that Jersey operators will be well placed to demonstrate this. We will continue to monitor

COMMON REPORTING STANDARD Jersey committed to being an early adopter of the CRS

BENEFICIAL OWNERSHIP Jersey continues to promote it’s model for collection of beneficial ownership information

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“Jersey Finance believes, while law enforcement agencies and tax agencies should have access to information relevant to how they discharge their domestic responsibilities, individuals have a right to keep their personal financial information private.”

progress on the proposals in 2015, ahead of their planned adoption after publication in September.

Common Reporting Standard Jersey gave early support to introducing a global standard for the automatic exchange of information for tax purposes, agreeing in 2013 to endorse the G5 proposal. The 2013 G20 Leaders’ Summit in St Petersburg agreed proposals to develop a common global standard on the automatic exchange of information, and in November of that year, Jersey joined 35 other countries in committing to the early adoption of such a standard. The Common Reporting Standard will be implemented through procedures to be determined by mutual agreement between individual parties to the Multilateral Convention on Mutual Administrative Assistance, which includes Jersey. The G20 wishes to see this process underway by the end of 2015, so that information on 2016 financial accounts can be exchanged in 2017. The requirements for financial institutions will be essentially the same as those under the intergovernmental agreements recently signed with the US and the UK, so Jersey should be ready to meet the challenges. In October, Jersey joined 50 other members of an ‘Early Adopters Group’ in Berlin to sign a Multilateral Competent Authority Agreement – a further step in implementing the Common Reporting Standard. We believe that a single standard for automatic exchange of information implemented globally on a non-discriminatory basis will enhance the Island’s competitive position. Compliant businesses will be attracted to those jurisdictions that facilitate international reporting in an efficient, practised and proportionate manner.

Public Registries of Beneficial Ownership The UK Government made improvements in the transparency of ownership and control of legal persons and legal arrangements a cornerstone of its G8 Presidency in 2013. Its Department for Business, Innovation and Skills (BIS) published a paper in April confirming that a public register of corporate beneficial ownership would be created for UK-incorporated companies. Companies would have to supply the register with information on individuals with an interest of more than 25% of the voting rights, or who otherwise control the management of a company. The Small Business, Enterprise and Employment Bill, whose provisions include the creation of a register of ‘persons with significant control’, is now reaching the end of the UK Parliamentary process. Meanwhile, the European Parliament is calling for public registers of both companies and trusts in the debate on the Fourth Money Laundering Directive. Whilst this move was initially resisted by the Council of Ministers, a compromise looks to have been reached at the year end. As we move into 2015, we will continue to monitor closely the likely impact of the Directive on Jersey to ensure continued access to European markets. The UK has encouraged all Crown Dependencies and overseas territories to follow its example by creating a public register of beneficial ownership. However, Jersey Finance believes that while law enforcement agencies and tax agencies should have access to information relevant to how they discharge their domestic responsibilities, individuals have a right to keep their personal financial information private. Wealthy individuals in many parts of the world will understandably want the size and location of their wealth to

EUSTD

OECD

Jersey has implemented regulatory changes to allow automatic information exchange under EUSTD

Jersey agreed to extend ratification of the OECD Convention on Mutual Administrative Assistance in Tax Matters

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Transparency & Taxation remain private to avoid exposing them or their families to undue risk of kidnapping and extortion. There are also many valid reasons why an investor or business would wish to keep some types of information confidential, such as business plans, trade secrets and strategic decisions. In addition, we believe that a UK register would provide data of dubious value, since the criminal fraternity and individuals misusing companies to launder money are unlikely to comply with the self-reporting requirements. The data will be unreliable due to the unlikelihood of any meaningful checks being undertaken on the quality of information being captured. And those who do not wish to disclose their information could incorporate non-UK companies, which would not be covered. Worse still, making the information public will likely drive investment away from the UK. Our research indicates that should a public register of beneficial ownership be introduced in Jersey, our Membership base would expect to see a reduction in business of, on average, 27%. This could reduce the amount being invested in the UK through Jersey by as much as £125 billion, based on Capital Economics estimates of the total UK inward investment flows that arrive via Jersey. We have proposed that we retain the existing Jersey model, cited by the World Bank as an exemplar of good practice in recording the beneficial ownership of companies at company registries. Jersey has captured beneficial ownership information on a corporate registry since 1999 and this information is made available to law enforcement agencies and competent authorities. The JFSC regularly undertakes rigorous on-site examinations of businesses to assess compliance. In the same way that we entrust criminal investigations to public bodies, we should trust financial crime agencies to make appropriate use of the increasingly available amount of data provided by existing information exchange agreements.

It was therefore gratifying to note the G20’s rejection at the Brisbane Summit in November of calls for mandatory central registers (whether public or not), and its endorsement of the FATF’s recently reconfirmed approach of ensuring that the true owners of entities are properly and accurately identified, that the information is readily accessible, and that it can be exchanged between governments rapidly and without undue difficulty.

Abusive Tax Schemes The Jersey Government outlined a package of measures in July to reinforce its policy that Jersey does not welcome abusive tax-planning structures to avoid UK tax. It said that the authorities expect financial service providers to check whether any new business is designed to facilitate the use, by their client, of a tax avoidance scheme registered under the UK’s Disclosure of Tax Avoidance Scheme (DOTAS) or if they are involved in any transactions in which a scheme with a DOTAS reference number forms a part. In each case, providers will be expected to follow procedures to document this, which the JFSC will monitor as part of their compliance responsibilities. The new measures came into force on 1 October. This initiative was welcomed by Jersey Finance, and it issued guidance notes to Members who will be expected to comply with it. While we believe in tax competition and view taxplanning as an appropriate response to operating across borders, in the spirit of being a good neighbour we do not support the use of abusive tax schemes designed to frustrate the will of national parliaments.

FATCA: US & UK

ABUSIVE TAX SCHEMES

Jersey worked with US and UK authorities to agree mutually acceptable tax reporting measures

Package of measures introduced reinforcing that Jersey does not welcome abusive tax structures

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Supporting Jersey Jersey’s finance industry is a major contributor to the Island’s economy, providing work for more than 12,500 people, spending almost £1m a day in the local economy, and contributing more than half of all government tax revenues. However, Jersey Finance Members also contribute a great deal more to the community through their own programmes, especially to education activities. Examples of the events staged and the money raised can be found on the new Community Channel on the Jersey Finance website. In 2014, projects included: an upgrade of the macaque house at the Durrell Wildlife Park carried out by 23 UBS staff; Elian’s pledge to the Donna Annand Melanoma Charity of £90,000 over the next two years; a grant by the Lloyds Bank Foundation of £28,000 to provide family support services for Samarès and Le Squez; and over £10,000 raised for CLIC Sargent Jersey by ABN AMRO staff running the New York Half Marathon.

Education Our engagement with young people through their education and beyond is a vital activity from the point of view of both the finance industry and the Island. We naturally hope that young people will consider a career in finance, but we also want to help them make the right choices in whatever career they choose and assist them through to success. Jersey Finance Members contribute some 4,000 hours of staff time each year in preparing young people for the jobs market – helping them with their CVs and interview techniques, and offering them internships and work experience. Members also support government schemes such as Advance to Work and Work Plus, as well as Jersey Finance activities such as our Schools Roadshow programme. The ‘Life in Finance’ programme, which brings A-level students and finance professionals together, was run again in summer 2014, the most successful year to date with 42 students hosted

Positively part of our local community

by 22 Jersey Finance Members firms. The participating firms admired the quality of the students, while the students said that their placements had been valuable and worthwhile experiences, which had enabled them to develop transferable skills and enhance their knowledge of Jersey’s leading sector. Feedback from the students was highly appreciative: ■ ‘The scheme has given me a lot more confidence about professional work.’ ■ ‘Work experience is hard to come by—therefore this scheme has been very beneficial for me.’

42 22 6

STUDENTS

FIRMS

SCHOOLS

2014 saw more than 60 pieces of community news stories, uploaded to jerseyfinance.je/community-news by member firms, which showcased some of the charitable initiatives, sponsorship and environmental programmes, and community projects that have made a positive contribution to Island life.

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Strategic Projects In 2014, Jersey Finance launched two independent reports of great importance to the future of Jersey’s finance industry. The first was a defence of the role of IFCs, written by two leading US professors, Andrew Morris and Richard Gordon. Moving Money: International Financial Flows, Taxes, & Money Laundering, partly funded by Jersey Finance, was launched in partnership with the UK’s Centre for the Study of Financial Innovation (CSFI). The second report, by the respected independent research firm Capital Economics, argued that Jersey can play a valuable role in delivering sustainable growth in Africa. Commissioned by Jersey Finance and launched in partnership with Chatham House in London, Jersey’s Value to Africa identified a US$85 trillion investment gap in Africa that IFCs can help fill.

■ The high standards of compliance with global standards by IFCs. ■ Tax sovereignty, which allows IFCs to have appropriate tax systems for their needs. Positive, independent articles drawing on the content of the paper were featured in City AM and The Huffington Post. We also used the launch of this work to reach out to our extensive global database of contacts, sending mailshots drawing the report to the attention of almost 15,000 individuals. The full report can be found at www.jerseyfinance.je/Moving-Money

Moving Money This report analysed the validity of some of the most prominent arguments surrounding the use of IFCs, which have been accused of helping multinational enterprises and wealthy individuals to avoid paying a ‘fair’ amount of tax. It argued that such allegations fail to recognise the value of international financial flows, which are essential for the free trade that has driven global economic growth, averaging 1.9% since 1946. The research paper evaluated the various allegations and provided a comprehensive explanation in relation to the following: ■ The benefits of free trade, which flow to all parties in financial transactions. ■ How and why money moves, and the role of the international payments system in free trade. ■ The beneficial role of IFCs in facilitating international payments.

MOVING MONEY IN NUMBERS

1.9%

AVERAGE ANNUAL RATE OF GLOBAL GROWTH SINCE 1946

US$1.4 TRILLION

VALUE OF US BENEFITS FROM FREE TRADE IN 2012

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Jersey’s Value to Africa 2014 saw the commissioning of the report, Jersey’s Value to Africa. Researched by respected, independent research organisation, Capital Economics, the report was launched at an event in association with the renowned international think tank Chatham House. The report provided a fascinating insight into the current barriers to investment into Africa and highlighted how IFCs, in particular Jersey, can offer sound business environments to help mitigate some of the challenges and set the continent on track to fulfil its economic potential. Key findings included:

Putting Africa in a world context

15%

OF THE GLOBAL POPULATION

OF GLOBAL ECONOMIC OUTPUT

■ Despite making up 15% of the world’s population, Africa accounts for just 4% of global GDP. ■ Africa requires a cumulative $85trn investment by 2040 to fulfil its potential. ■ Aid fails to scratch the surface of what is required to fund the investment gap.

Nigeria

■ Over the last 10 years, Africa’s economy has grown by 5.2%.

OF AFRICAʼS TOTAL GDP FROM FIVE COUNTRIES

■ In the next 30 years, Africa’s working age is set to double. The report also tackled the accusations often levelled by pressure groups concerning the role that offshore financial centres play in the movement of capital from the developing world, and it found that these estimates do not bear scrutiny.

66%

Egypt

South Africa

Angola

Algeria

JERSEY’S VALUE TO AFRICA IN NUMBERS

US$11.4

TRILLION INVESTMENT GAP BY 2040

ONLY FOREIGN PRIVATE INVESTMENT CAN FUND AFRICA’S INVESTMENT NEEDS

AFRICA’S WORKING POPULATION IS EXPECTED TO

DOUBLE

US$85

TRILLION

CUMULATIVE INVESTMENT NEEDED BETWEEN NOW AND 2040

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KPIs Members’ Feedback taken from our 2014 Member survey

During 2014 Jersey Finance commissioned an independent study to identify what Members value about Jersey Finance and how they would like to see the organisation develop. Conducted by Ipsos MORI, the study found that reputation management is a key role for Members and that the work we do to try and achieve a more positive representation of the Island remains a finance industry core strategic objective.

who would like to hear more on our activities in these areas. While personal contact with key staff from Jersey Finance was highlighted as being appreciated, some of our smaller Members would value greater access. Among the findings, Members also stated they would like to see relationships between Jersey Finance, government, and the regulator continue to be developed to further to improve the Island’s offering.

In addition, communication regarding our market development was highlighted as a very important issue for our Members

We appreciate the time our Members have given to provide us with their opinions, which will inform our output in 2015.

Q “One of the things that Jersey Finance can do because they operate at a higher level than the actual businesses themselves, is to ensure that in some of our key markets reputation is maintained.”

What does success look like for Jersey Finance’s objectives and roles?

“JFL does a really good job of talking to government and lobbying to get financial services legislation up the agenda.”

MARKETING IN NUMBERS

170 £2.26M 660 JERSEY FINANCE MEMBERS

ADVERTISING VALUE EQUIVALENCY

EDITORIAL ITEMS

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To what extent would you speak highly or critically of Jersey Finance?

“It’s hard to imagine the last few years, with often unwarranted attacks that we’ve had to deal with, how we would have coped as a jurisdiction and the fact that we’ve come out the other side of it thus far reasonably unscathed and with the industry in a pretty strong position is due in no small part to what they’re doing.”

What does success look like?

“Probably a pipe dream but a more balanced discussion on matters on cross border investment in the British press. But they work quite hard at trying to minimise the imbalance.”

“They fulfil a very important role in not just marketing the Island in terms of our financial services but also keeping industry informed of what’s going on, assisting in discussions with governments and with regulators.”

“I am a big supporter of Jersey Finance. As well as the orchestrated events, they are also very proactive in terms of identifying media issues and dealing with them.”

To what extent would you speak critically…?

“For our business, success would be Jersey Finance’s role in coordinating a joined-up approach between government, industry and regulator, to constantly improve the funds offering.”

INTERVIEWS

74 101 35,333 150 EVENTS

ATTENDEES

PRESS RELEASES/ STATEMENTS/ ARTICLES ISSUED

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KPIs Q

How would you rate Jersey Finance’s communications on the following attributes?

100%

Quality of content

91%

Pitched at an appropriate level

91%

Relevant subject matter

88%

Frequency

12%

85%

Visually appealing

18%

OF PARTICIPANTS

HAVE ATTENDED A JERSEY FINANCE EVENT

■ NEUTRAL

■ GOOD

67%

WOULD SPEAK HIGHLY ABOUT JERSEY FINANCE

How favourable or unfavourable is your overall opinion or impression of Jersey Finance?

Neither favourable nor unfavourable

VERY FAVOURABLE

39%

55%

Very favourable

Mainly favourable

MAINLY FAVOURABLE NEITHER FAVOURABLE NOR UNFAVOURABLE

TECHNICAL IN NUMBERS

CONSULTATION RESPONSES SUBMITTED

PIECES OF INTERNATIONAL LEGISLATION/REGULATION

30+ WORKING GROUPS

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Know them just a little

How well do you know Jersey Finance as an organisation?

KNOW THEM VERY WELL KNOW THEM FAIRLY WELL KNOW THEM JUST A LITTLE

39%

Know them very well

52%

Know them fairly well

What would you say are Jersey Finance’s main areas of work?

TOP FIVE AREAS Promotion of the sector

82%

Reputation management

39%

Technical support

33%

Market development

27%

Regulator consultation

27%

Legislative consultation

15%

Evidence based advocacy

15%

Be neutral towards them

SPEAK HIGHLY OF THEM WITHOUT BEING ASKED SPEAK HIGHLY OF THEM IF ASKED BE NEUTRAL TOWARDS THEM

30%

Speak highly of them without being asked

To what extent would you speak highly or critically of Jersey Finance?

55%

Speak highly of them if asked

£4.02m 24 PRO-BONO TIME GIVEN BY MEMBERS

TECHNICAL BRIEFINGS & MAILSHOTS

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Digital Services Following the re-launch of Jersey Financeâ&#x20AC;&#x2122;s website in 2013, further improvements were introduced in 2014. These included the integration of Eventbrite, a booking process for all Jersey Finance events, with salesforce and other platforms to make booking simpler. We have also coded our contacts data so that it can be filtered to a greater degree. Our business development directors do a sterling job of meeting with key contacts regularly, but the number of face-to-face meetings that they can hold in each region is, by its very nature, limited. We have therefore stratified the data in our sophisticated client database so that we can prioritise key individuals for such meetings. This also allows us to engage with many thousands of other contacts on the database by targeting online campaigns tailored to their relevant sectors and markets of interest.

INCREASE IN VISITS

18%

INCREASE IN UNIQUE VISITS

A welcome result of all this activity is that our communications capability was seen as strong and clear in the Ipsos MORI survey of Jersey Finance stakeholdersâ&#x20AC;&#x201D; Members, influencers and gatekeepers. Respondents thought good communications were important and valuable to most Members, and saw them as up-to-date and timely. 2014 also saw unique visits to the website increase by 100%. In addition, there was a significant increase in visitors accessing the website on mobile devices and via social media platforms.

31%

INCREASE IN VISITS VIA MOBILE DEVICES

97%

INCREASE IN TRAFFIC FROM THE GCC

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Awards and Accolades 2014 Jersey retains its title as

INTERNATIONAL FINANCIAL CENTRE OF THE YEAR in the Citywealth International Financial Centre Awards 2014 in London

Jersey named

INTERNATIONAL FINANCIAL CENTRE OF THE YEAR at The Wealthbriefing European Awards 2014

Jersey wins

BEST INTERNATIONAL FINANCE CENTRE in the Professional Adviser International Fund and Product Awards 2014

Jersey Finance judged

BEST FUND ADMINISTRATION CENTRE by leading investment management publication, Investment Week

Jersey receives

AA+ CREDIT RATING with stable outlook