Annual review 2017 by Jersey Finance

Annual Review

www.jerseyfinance.je

Contents

Contents 02

Our Vision and Mission

Private Wealth

Chairman’s Statement

Funds

Chief Executive’s Statement

Banking

by Gunther Thumann

by Geoff Cook

2017 in Brief

Capital Markets

Transparency and Taxation

Education and Employment

Research and Innovation

Members’ and Gatekeepers’ Feedback

Marketing

Publications available to Members

Market Development

Useful Contacts

Jersey Finance Annual Review 2017

Our Vision and Mission Our Vision

Our Mission

To promote Jersey as the clear leader in future-focused international finance.

To work with our Members to champion the competitive position of Jerseyâ&#x20AC;&#x2122;s finance industry - both locally and internationally by advocating the highest regulatory standards and the most attractive products and services to suit the needs of global investors. Our mission underpins the success of Jerseyâ&#x20AC;&#x2122;s financial services industry by providing marketing, technical and business support for the four key financial services sectors:

Private Wealth

Banking

Funds

Capital Markets

Chairman’s Statement

Chairman’s Statement By Dr Gunther Thumann

A warm welcome to Jersey Finance’s review of 2017, our annual report on progress in strengthening the Island’s financial services industry over the last 12 months.

I am delighted to have joined Jersey Finance, and am looking forward to helping give guidance and direction to the great team which we have. It is a great privilege to introduce this review, having been confirmed as Chairman in June in succession to Robert Christensen, who we thank deeply for his many years of dedicated service to Jersey Finance. We wish him all the very best in his new role as a Jurat of Jersey’s Royal Court. It has been another very busy year for Jersey’s finance industry, with new challenges emerging all the time. Although the UK Government launched the two-year process of EU withdrawal as planned in March, clarity about the outcome of the negotiations is in short supply. I hope that in 2018, negotiations can progress and give much longed-for clarity around the future trading arrangements between the UK and the EU. Jersey Finance has continued with its research programme into issues of importance to the positioning of the Island’s finance industry. The latest analysis examined the role of Jersey in institutional investing, highlighting the value which the Island brings to tax-exempt investors such as pension funds, endowment funds and sovereign wealth funds. Given their vast reach, the benefits from servicing such key investors reach a significant number of people around the world.

Another publication, which proved helpful to me during my first six months as Chairman, was an updated version of the positive impact of the finance industry on the Island community. Our Members directly and indirectly create 54% of all Jersey’s economic output through their staff, suppliers and spending. In addition, they provide employment to some 13,000 people on the Island and they contribute more than half of all taxes raised on the Island, a substantial contribution to vital services for everyone. We have worked with the Government of Jersey, the Jersey Financial Services Commission (JFSC), Digital Jersey and industry, guided by McKinsey, to undertake a Strategic Review to see what needs to be done to maintain Jersey’s finance industry at the forefront of global business. The industry has seen significant changes and developments since our last such review in 2013. It is time to update it so that we are well-placed to prosper in this fastevolving world. Finally, I extend my thanks to all those who have contributed to our work in 2017. They include the Government of Jersey, the JFSC, my fellow directors and our Members who give their valuable time and resources so freely. I should also like to thank Geoff Cook, his senior management team and all the team at Jersey Finance for their work on behalf of the industry. I look forward to supporting them throughout 2018.

Jersey Finance Annual Review 2017

Chief Executive’s Statement by Geoff Cook Despite the challenges of a slowmoving Brexit and the fading distractions of the Paradise Papers, 2017 was a year underscored by considerable commercial success.

On Brexit, Jersey is in a fortunate position that our finance industry has established valuable access to European and global markets through third-party agreements which are unaffected by Britain’s departure from the EU. Our constitutional relationship with the UK is unchanged, while the weaker pound makes our financial services more competitive and British assets more attractive to international investors. Jersey’s Government has been ensuring that the Island’s voice is heard as the Brexit negotiations develop. The Island could benefit as an alternative route for global funds to be channelled into the EU should the UK investment industry find itself cut off from EU markets. However, the slow pace of the Brexit negotiations has delayed the move to discussing trade relationships after the UK’s departure, creating uncertainty over the immediate

future. The news in December that talks are to move to Phase II was therefore a very welcome early Christmas present for the UK Government. Nor has the media coverage of the so-called ‘Paradise Papers’ in November done anything to clarify the outlook. Painting all offshore activity as secretive and founded on abusive tax avoidance is both misleading and one-sided. Everyone benefits from the vital role that international finance centres (IFCs) play in encouraging international investment, which has a positive economic impact on countries across the globe. The media coverage appears to ignore the enormous changes in international financial regulation in recent years, such as that designed to clamp down on base erosion and profit shifting (BEPS). And the Common Reporting Standard (CRS), which came into

Chief Executive’s Statement

force in 2017, ensures that tax information of those doing business in IFCs will in future be automatically supplied to their home country’s tax authorities. Jersey Finance has used the publication of the stolen data to highlight the Island’s role in encouraging international investment around the globe. Also in 2017, we demonstrated how Jersey’s tax neutrality enables investors – including tax-exempt institutions such as pension funds – to diversify their portfolios without incurring excessive costs. Some 58 million people around the world benefit from Jersey’s administration of pension fund investment in real estate funds. On a more positive note Jersey continued in 2017 to flourish as a centre that is increasingly attractive to fund managers keen to promote alternative investment funds in the EU. Fund assets serviced in Jersey have risen sharply over the last year, and the decision of SoftBank to select Jersey for structuring its new Vision Fund, the world’s largest-ever investment fund, is particularly welcome. In December, following an intensive year-long screening process, EU Finance Ministers confirmed Jersey’s status as a cooperative jurisdiction, a positive and welcome outcome for the industry. The Government is now committed to addressing items identified by the Code of Conduct Group by the end of 2018. Other developments in 2017 included the launch of the Jersey Private Fund, which consolidates three previous fund regimes and streamlines the legislation and regulatory processes. A recovery and resolution law for Jersey’s banks came into force, in line with international developments. And consultations have continued on a seventh set of amendments to improve the Trusts (Jersey) Law 1984. 2017 saw record numbers of Member firms investing in flyout activity, with the highest levels to date of participation in Jersey Finance roadshow events across the GCC, Asia and Africa. In addition, there continue to be examples of further investment in operations in key markets, most notably in the GCC. Much of what has been achieved in recent years is a result of the 2013 Strategic Review of Jersey’s finance industry, which identified 21 initiatives to strengthen the Island’s financial services industry. After four years of significant changes in the industry, an update of the strategy is needed – especially with

Brexit looming. So, we have again commissioned McKinsey to review our strategy in order to keep Jersey’s finance industry at the forefront of global business in the future. This forward-thinking review has already made much progress, and we look forward to publication of its proposals in 2018. We also had an excellent CEO Connect programme in 2017, with eminent guest speakers including Miles Celic, Chief Executive Officer of TheCityUK; Mark Littlewood, Director General of the Institute of Economic Affairs; Mark Hoban, former Minister of State for Employment and Chair of Flood Re; Henrietta Jowitt, Deputy Director General of CBI; and Sven Hughes, Group CEO of Verbalisation. In 2018, we will have more esteemed speakers exclusive to CEO Connect roundtables, sharing their insights and perspectives on the world at large. Last year, I paid tribute to Robert Christensen MBE, who stood down as our Chairman after being elected as a Jurat of Jersey’s Royal Court. This year, I wish to welcome his successor, Dr Gunther Thumann, a former senior economist for the IMF in Washington DC. In 2007, he became partner, CEO and Chairman of Brevan Howard Capital Management in Jersey, building the offshore business into the hub of the Brevan Howard Group. His leadership and insights will be invaluable as we step up our activities in key markets. I should like to thank all our Members for their support in 2017, which has helped underpin Jersey’s leadership position as an IFC in target markets for the Island’s finance industry. I was delighted that leading members of the Jersey Finance team were recognised by Citywealth - Lisa Springate, our new Head of Technical, was shortlisted for a 2018 Powerwomen Award. Both Lisa and Amy Bryant, Deputy CEO are listed in the IFC Powerwomen Top 200 list. It was good to see the positive feedback from the Ipsos MORI poll of Members again, as well as valuable suggestions about improvements for the future which we will address in 2018. Finally, we ended 2017 on a high note with the OECD Global Forum confirming that Jersey is fully compliant with all global standards of international tax transparency and confirmation of our cooperative status from the EU. With some work to do in 2018, this further reflects how the Island is leading the way in proactively helping countries to tax their citizens properly.

Jersey Finance Annual Review 2017

2017 in Brief JANUARY

FEBRUARY

■ Jersey wins International Financial Centre of the Year at Citywealth IFC Awards 2017 ■ Jersey removed from the Portuguese blacklist with effect from 1 January 2017 ■ Jersey maintains its AA credit rating with Standard & Poor’s, one of the highest possible ratings. This rating is reaffirmed in August ■ Jersey Finance appoints Cormac Sheedy as Business Development Director for the Gulf Cooperation Council states (GCC), to further build profile in the region ■ Jersey Finance launches CEO Connect programme

■ Government launches Jersey’s first Island-wide cyber security strategy consultation, essential for Jersey’s digital aspirations ■ Jersey Finance hosts a private wealth-focused event in Lagos, Nigeria: Jersey: A Valuable Partnership ■ US$100bn Softbank Vision Fund comes to Jersey

JULY

AUGUST

■ Jersey Finance’s Life in Finance scheme provides work placements in 25 Member firms for 36 Year-12 students

■ Jersey Finance formally appoints Amy Bryant as Deputy Chief Executive Officer ■ Tenth anniversary of the Global Financial Crisis ■ Robin Walker MP, Parliamentary Under Secretary of State at the Department for Exiting the European Union, visits Jersey

MARCH ■ JFSC unveils the Jersey Private Fund, which will enable funds with up to 50 investors to take advantage of fast-track authorisation and lighter regulatory requirements ■ Jersey Finance Annual Funds Conference 2017: New Perspectives ■ UK triggers Article 50, giving notice to the EU of its intention to cease to be a member state

SEPTEMBER

■ Finance Industry Strategic Jurisdictional Review working groups convene ■ Jersey Finance hosts evening receptions in Riyadh, Jeddah and Dubai in conjunction with the British Embasssies ■ Jersey Finance hosts first USA Community of Interest group ■ Jersey Finance Board appoints new Non-Executive Director, Mike Gray

2017 in Brief

APRIL

MAY

JUNE

■ Jersey Business Tendency survey shows more than 90% of finance firms see business as level or rising compared with the first quarter ■ UK ‘non-dom’ tax reforms take effect from 6 April ■ UK Criminal Finance Act receives Royal Assent on 27 April ■ Jersey Finance launches Cyber and Data Security Awareness Forum

■ Jersey Finance Annual Private Wealth Conference 2017: A New Harmony ■ Jersey wins Best International Finance Centre at WealthBriefing European Awards 2017 ■ Jersey Finance launches New Perspectives GCC Roadshow in Kuwait and Dubai ■ Jersey Finance white paper launched on driving forces behind GCC high net worth investors ■ Lord Mayor of London, Alderman Andrew Parmley, visits Jersey

■ Jersey Finance launches Asia New Perspectives Roadshow in Shanghai and Hong Kong ■ Jersey signs the Multilateral Convention to Implement Tax Treaty Related Measures to prevent BEPS ■ Report commissioned by Jersey Finance on how to service Chinese wealth as it goes global ■ Dr Gunther Thumann is formally appointed Chairman of Jersey Finance

OCTOBER

NOVEMBER

■ Jersey Finance cascades a summary of the Finance Industry Strategic Jurisdictional Review to Members ■ Jersey Finance hosts London funds roundtables ■ Geoff Cook attends IMF and IFF World Bank annual meetings in Washington DC ■ Jersey Finance hosts an Africa Private Wealth event in Kenya on Jersey: A Valued Partnership ■ Jersey Finance provides finance careers advice to hundreds of students at the Jersey Skills Show

■ Jersey wins IFC 2017 at WealthBriefing GCC Region Awards ■ Jersey Finance hosts two Africa Private Wealth events in South Africa on Jersey: A Valued Partnership ■ Publication of Jersey for Institutional Investors: A Clear Choice ■ Jersey Finance appoints new Head of Technical Lisa Springate ■ OECD’s Global Forum on Transparency and Exchange of Information on Tax Matters Peer Review finds Jersey ‘fully compliant’

DECEMBER

■ EU finance ministers at the meeting of the Economic and Financial Affairs Council in Brussels confirm Jersey’s status was a cooperative jurisdiction ■ Jersey Finance launches local engagement campaign on the Island to enhance and improve understanding of the finance industry

Jersey Finance Annual Review 2017

Transparency and Taxation Tax transparency and other taxation issues continued to be a major theme of Jersey Finance’s work, as several of the international initiatives launched in recent years came to fruition in 2017. Common Reporting Standard One of the biggest steps forward in international financial regulation came in 2017 with the automatic exchange of tax information under the OECD’s Common Reporting Standard (CRS). Jersey was one of 54 ‘early adopters’ which have led the way, collating information on clients from the beginning of the year and exchanging information with the other early adopters. By September 2018, more than 100 countries will be operating under the CRS regime. Jersey, like the other Crown Dependencies and British Overseas Territories, had already had a dress rehearsal before the big day in 2017. The UK indicated ahead of the CRS debut that as from 1 January 2016, it would move from the existing intergovernmental agreement (UK IGA) covering both groups. But not wishing to wait until 2017 for

1st

MONEYVAL ranking Jersey highest for compliance with international standards

1st

2016 information, it required the provision of the information during 2016, which meant that Jersey firms already had the systems and expertise in place for the 2017 CRS launch. Many countries – including Jersey – are also members of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes which provides information on request. In November, the OECD confirmed that Jersey is fully compliant with all global standards of international tax transparency - an unequivocal endorsement of Jersey’s leadership in helping countries to tax their citizens properly by providing them with the information they need to collect the right tax. Jersey is proud of its forward-thinking approach on the automatic exchange of information for tax purposes, and the adoption of a common global standard on implementing it. With the early adoption of CRS, Jersey has shown that it has nothing to hide: effectively, there will be no piece of business in CRS jurisdictions – including Jersey – that is not known to the home tax authority of clients. We believe that a single global standard for automatic exchange of information implemented on a non-discriminatory basis will enhance the Island’s competitive position, as businesses will be attracted to jurisdictions with the highest standards.

BEPS Associate

committing Jersey to adopting international standards

Transparency and Taxation

Our leadership role in CRS has been recognised by Pierre Moscovici, the EU Commissioner for Economic and Financial Affairs, and Angel Gurria, the OECD Secretary General.

This leadership allows Jersey to contribute to the overall development of the project and further enhances Jersey’s reputation as a responsible international finance centre.

Base Erosion and Profit Shifting (BEPS)

Blacklisting of non-cooperative tax jurisdictions

The objective of the BEPS project is to prevent tax planning strategies that artificially shift profits and minimise tax liabilities. Jersey has been fully supportive the BEPS project since its inception and is active in implementing the actions required. We recognise the importance of ensuring profits are taxed where the economic activity that generates them is carried out where value is created.

The Council of the European Union has been seeking to harmonise approaches by member states to blacklisting non-cooperative tax jurisdictions. In November 2016, its General Secretariat agreed three criteria that have to be met for jurisdictions to be regarded as cooperative: transparency and exchange of information; fair tax competition; and meeting the G20/OECD standards on BEPS.

Jersey became a BEPS Associate in 2016 and is a member of the BEPS Inclusive Framework. The framework brings together over 100 jurisdictions – including G20 economies and EU member states – to develop standards on BEPS related issues as well as to review and monitor the implementation of the whole BEPS package. The implementation of the various BEPS measures in individual jurisdictions will be subject to monitoring by the OECD and peer reviews undertaken by members of the BEPS Inclusive Framework. In June 2017, Jersey signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI). In total, 76 jurisdictions either signed or formally expressed their intention to sign the MLI, which will amend bilateral tax agreements to ensure that they become BEPS-compliant and allow Jersey to strengthen its tax treaty network more effectively. The signing of the MLI demonstrated the Island’s commitment to ensuring that it maintains its leading position as a jurisdiction which complies with international standards on financial regulation.

Jersey was among more than 90 jurisdictions invited by the EU in January 2017 to participate in a screening process. The Island confirmed it was willing to engage with this process, and was confident of being able to satisfy an objective evaluation against the EU’s good governance criteria. We fully satisfy the tax transparency requirement as an early adopter of CRS with a compliant rating on the Exchange of Information on Request – one of only six jurisdictions in the world to achieve this. Likewise, Jersey was an early signatory of the BEPS Multilateral Convention. On fair taxation, the absence of a corporate tax system or a nominal corporate tax rate of zero or close to zero is cited as a possible indicator of non-compliance. However, Jersey has already been assessed as ‘satisfying’ on the absence of harmful tax measures under the EU’s Code of Conduct. In December, the EU Code of Conduct Group on Business Taxation (‘the Code Group’) determined that Jersey is a cooperative tax jurisdiction, and will work with the Island throughout 2018 to ensure that this position is maintained.

24-hour

1-hour

to requests for exchange of beneficial ownership information

to requests for exchange of beneficial ownership information if urgent

deadline response

Jersey Finance Annual Review 2017

Public registries of beneficial ownership For more than 20 years, Jersey has had a central register of beneficial ownership, available to the people who need that vital information. We constantly work with law enforcement agencies and other relevant authorities to ensure that they have everything they need. What sets us apart from many other financial centres is that we have a rigorous checking process carried out by regulated professionals to ensure that the information is correct. In April 2016, Jersey signed an Exchange of Notes with the UK which committed the Island to provide beneficial ownership information on request within 24 hours (one hour if urgent, for example, related to terrorist financing). The Jersey Financial Services Commission (JFSC) is responsible for implementing the required technology and enforcing the deadlines. The new arrangements came into effect on 1 July 2017, but pressure on the Crown Dependencies and British Overseas Territories to establish publicly accessible registers of corporate beneficial ownership continues. During the passage of the UK’s Criminal Finances Bill 2017 through Parliament, there were moves to force Overseas Territories to make their registers public and require the Crown Dependencies to report on progress towards that goal. Jersey Finance submitted a report to the House of Lords, ahead of a debate on the Criminal Finances Bill, on the arguments against public registers, particularly when data is not robustly verified by corporate service providers. It also pointed out the increasing move away from such registers internationally, and the proven success of Jersey’s model for providing beneficial ownership information to appropriate authorities in other jurisdictions.

‘Jersey model’ for a central registry endorsed by a leading academic

Both amendments were withdrawn after the Government opposed forcing through the adoption of public registers unless they become a global standard. However, the Criminal Finances Act 2017 still pursued the subject by requiring the Government to conduct an 18-month review of the arrangements with both groups and report in 2019. Jersey Finance believes that this provides an opportunity to demonstrate the Island’s high standards by continuing to engage with the UK Government in the debate about whether public registers are the most effective way to combat financial crime. Only a handful of jurisdictions around the world have signed up to the public register model, with the US, Hong Kong and Singapore showing little interest. Speaking at the Jersey Finance London Private Wealth Conference, Jason Sharman, Professor of International Relations at Cambridge University, said that policymakers should stop introducing new measures and find out whether the current ones are working. Given the weaknesses of the UK public register in not having any verification of entries – unlike the Jersey register – Jersey Finance believes this is an argument that needs to be heard.

Abusive tax schemes In 2014, Jersey introduced measures to crack down on abusive tax schemes, with financial service providers required to check whether any new business will finance such practices and document this accordingly. The new measures are monitored by the JFSC, and Jersey Finance issued guidance notes urging its Members to comply with them. In 2017, we reinforced the requirement for Members to read and commit to complying with the Government of Jersey’s guidance on the subject as a condition of membership. While we believe in tax competition, we do not support the use of abusive tax regimes designed to frustrate the will of national parliaments.

Automatic exchange of information with UK’s tax authorities starts

Transparency and Taxation

National Risk Assessment (NRA) The Financial Action Task Force, which sets the global standards for dealing with financial crime, now requires all countries to identify, assess and understand the risks posed by money laundering and terrorist financing.

The Jersey Financial Crime Strategy Group (JFCSG) will conduct an NRA of the threats posed to the Island by money laundering and terrorist financing by May/June 2019, when a report and action plan will be published.

MONEYVAL

OECD

Assessment by the Council of Europe - Jersey rated compliant or largely compliant in 48 out of 49 assessment areas

Jersey scores top marks from the OECD on tax transparency receiving a fully complaint rating November 2017

TIEAs – tax information exchange agreements

EU Code of Conduct Group on Business Taxation Confirms Jersey’s status as a cooperative jurisdiction December 2017

DTAs – double taxation agreements

Jersey Finance Annual Review 2017

Research and Innovation Jersey Finance continued its programme of research in 2017, to develop new products and update strategies for the fastchanging world of international finance centres (IFCs). The biggest and most significant for the Island was our Strategic Review 2017 focusing on the challenges facing Jersey’s finance industry now and in the future. We also published an independent report on Jersey’s role in managing pension funds and other institutional assets – a growing market globally. We reviewed the work priorities for developing Jersey’s role in FinTech which is becoming increasingly important to the finance industry. We also refreshed our research on the finance industry’s contribution to Jersey’s prosperity. In addition, we published two other research papers on target markets for Jersey: what Chinese investors look for as they go global; and the ‘Driving Forces Behind GCC HNW Investors’.

Strategic Review 2017 In 2013, Jersey Finance commissioned a strategic review of Jersey’s finance industry, which set out a blueprint for the future of the industry. The 21

€188bn foreign investment into the EU through Jersey (excluding the UK) Source: Jersey’s Value to Europe, 2016

initiatives identified are still very much at the heart of the current strategy and significant progress has been made in delivering them – many are now business as usual. After four years of significant changes and developments in the finance industry, we felt that a review and update of the strategy was much needed – especially with Brexit looming and the anticipated impact of digital innovations on the finance industry. We once again commissioned McKinsey to work with us to review our strategy, to ensure that Jersey’s finance industry continues to lead the way in providing services that make a positive impact around the world. This latest review set out proposals which will require Jersey Finance, the Government of Jersey, the Jersey Financial Services Commission (JFSC), Digital Jersey and our Members to work together again on its recommendations on behalf of all our stakeholders and their businesses. It focuses on potential opportunities and threats arising from Brexit, and the implications for the Island’s finance industry strategy; possible responses to the wider developments affecting the finance industry such as the impact of changes in digital technology; identifying means for the industry to secure new growth through accelerating our growth markets strategy and further geographic diversification; and engagement with the non-financial community at home and abroad to raise the level of

88,000 jobs supported in the EU’s economy

Source: Jersey’s Value to Europe, 2016

Research and Innovation

understanding and advocacy for the finance industry. This thinking was developed as a result of meeting with more than 60 senior industry leaders, government officials, organisation representatives, off-island stakeholders and McKinsey global experts. Six workshops and three steering committee meetings were held across two workstreams to synthesise sentiment on the Island and push forward with initiatives. Pleasingly, the review shows that Jersey is performing well, and continues to be a major force in the world of international finance due to its forward-focused outlook, first-class expertise, and high-quality standards. When we successfully implement the recommendations, Jersey will be well-placed for a long and prosperous future as one of the world’s leading IFCs.

Jersey’s attractions for institutional investors In Spring 2017, we commissioned Europe Economics to examine the role of Jersey in facilitating the effective and efficient management of pension and other institutional assets. The report, ‘Jersey for Institutional Investing: A Clear Choice’, describes the types of tax-exempt institutions – including pension funds – investing through Jersey vehicles and the volume of their assets under administration. It explores the reasons why investors and fund promoters choose Jersey, and analyses the added value of investing in Jersey for tax-exempt institutions. The report estimates that £39 billion of the £246 billion of funds under administration in Jersey comes from pension funds, and another £14 billion from other tax-exempt institutional investors such as sovereign wealth funds (SWFs). Most of those funds are invested in private equity and venture capital, followed by property/real estate.

£14bn net benefit of Jersey to the UK economy

Source: Jersey’s Value to Britain, 2016

Among other characteristics that draw investors to Jersey, our tax neutrality is the critical factor for tax-exempt institutional investors, because it makes it easier to invest in diversified portfolios which help maximise returns for their beneficiaries. The other big attraction is Jersey’s proportionate regulatory environment and the time the regulator invests in understanding the needs of professional investors, which often differ from those of retail investors. Institutional investors are a valuable section of the Island’s clientele, and we must make sure that they understand the benefits of investing through Jersey. The report also found that around 58 million people globally benefit from Jersey’s administration of pension funds in real estate alone.

Financial technology (fintech) Jersey’s strengths in finance, its pro-business environment, our robust regulatory regime, and our expanding digital sector position the Island as the ideal jurisdiction for investors, start-ups and established businesses working in fintech. With proven world-class telecommunications and IT infrastructure, finance and technology firms are well-placed to work together on mutually beneficial projects. Jersey Finance has an important role in collaborating with key parties such as our Members, the Government of Jersey, JFSC, and Digital Jersey. We are proud to be working with such stakeholders to deliver changes which enable future opportunities for the Island. The 2017 Strategic Review proved a highlight with a series of digitisation initiatives identified which will enhance the way business can be conducted in a modern digital world while recognising both opportunities and threats that arise from new technologies.

250,000 jobs supported in the UK

Source: Jersey’s Value to Britain, 2016

Jersey Finance Annual Review 2017

Key to growing fintech in the Island is our close working relationships with Digital Jersey. We have jointly delivered a series of proposition development groups in the fintech sub-sectors of wealth management, regulatory technology, and distributed ledger technology (blockchain) which have seen finance industry representatives and technology specialists collaborating and sharing sector-specific insight. Together, Jersey Finance and Digital Jersey have engaged several finance, technology and fintech companies from our respective communities to ensure we understand the needs of our Members and how we can provide support.

Chinese wealth management The last few years have seen explosive growth in understanding among wealthy Chinese investors of the potential for structuring wealth and succession planning. Jersey Finance joined forces with Hubbis, a Hong Kong wealth management consultancy, to analyse the regulatory and cultural landscape of China for advisors. The analysis is based on an online survey of more than 60 advisors and firms in Hong Kong, Singapore and Mainland China conducted by Hubbis in May 2017. Their findings, summarised in ‘How to Service Chinese Wealth as it Goes Global’ are that while helping Chinese clients to diversify, protect and pass on their wealth was no different in concept than for clients in other countries, there are some important differences. One is that many wealthy people in China are younger than in other countries, so might not have the same urgency to plan for a generational shift. This requires assisting them to understand their needs and familiarising them with the risks of not taking active steps. Secondly, they cannot invest easily in their own country due to the lack of products, so they must select investment opportunities overseas. Any

£0.5tr* of foreign investment in the UK via Jersey

*of the UK’s total stock of foreign owned assets in 2014 Source: Jersey’s Value to Britain, 2016

structuring will be offshore, where Chinese clients can use structures such as trusts and offshore companies. The advisors in the survey said that: ■ Legacy planning is the key consideration for families in China ■ Misconceptions about the issues and solutions in wealth planning are the biggest obstacle to wealth planning ■ Loss of control is the biggest misconception on wealth structuring ■ Trusts are the most popular structuring ■ Estate/succession planning is most likely to be derailed by family disputes ■ When choosing fiduciary advisors, the clients’ main concern is that they will be in safe hands In a jurisdiction that has become increasingly ‘clean’, advisors need to be aware of and comply with global standards on regulation such as the Common Reporting Standard (CRS). The increased scrutiny of overseas transfers has also made it more of a struggle for clients to move money from the mainland. While tax planning is relatively straightforward at the moment, advisors need to be aware of changes in income tax and a possible estate duty in China.

Wealthy GCC investors Family businesses play a vital role across the Middle East, generating roughly 60% of GDP and employing over 80% of the workforce. It is estimated that $1 trillion of assets will be transferred from second generation business families to the third generation over the coming decade. Jersey Finance again joined forces with Hubbis, to find out more about the needs of HNW investors in the six countries of the Gulf Cooperation Council. This involved an online survey, one-to-one interviews and a roundtable discussion to gather the

£1

of every £20 investment in the UK is via Jersey Source: Jersey’s Value to Britain, 2016

Research and Innovation

views of more than 90 practitioners working in the market. The resulting white paper, ‘Driving Forces Behind GCC HNW Investors’ highlighted key trends and client needs linked to the demand for services and relevant solutions for the region. The survey found that 55% of practitioners rated business succession planning as the main demand from GCC business families, while 23% said legacy planning and 15% insurance/protection. But when it comes to wealth planning, 34% of practitioners blamed misconceptions about the issues and solutions and 21% said that clients didn’t know where to even start the process. An important issue lies in the fact that GCC countries are relatively new to the tradition of inheritance. While many wealthy Europeans are used to the concept of inheriting, a significant part of GCC wealth still remains in the hands of the first generation. This raises questions about how ready the next generation is to take over and how the first generation can ensure their success.

The finance industry’s contribution to Jersey’s prosperity Jersey Finance’s study on the finance industry’s value to Jersey found that for every ten jobs in finance, another nine jobs are created and supported in other Island industries through employing people, spending money with Jersey suppliers and spending by employees on goods and services. This resulted in a contribution of £2.2 billion to Jersey’s GDP in 2015 and £420 million in tax receipts, equal to 57% of all taxes received that year. Every £1 million generated by the finance industry produces another £300,000 elsewhere in our community. This is money that creates and keeps jobs, helping the Island thrive and look ahead to a positive future. These results show the positive impact of our finance industry in the growth of our economy – something that the industry is proud to achieve.

Other findings from the practitioners’ survey included: ■ More than half (56%) said that loss of control is the biggest misconception that GCC families have about wealth structuring. ■ Half said that the fear of family disputes was the biggest concern among clients ■ Just 17% said that trusts are the most popular structure among clients, while 54% saw family office structures as the most popular ■ The biggest concern when advising families about transparency measures such as the Common Reporting Standard (CRS) and the Automatic Exchange of Information (AEOI) is that clients do not reveal sufficient information ■ Almost half the practitioners said that what GCC clients want most from their fiduciary advisors is confidence that they are in safe hands

43%

of all jobs in Jersey are dependent on the finance industry

Source: The Value of the Finance Industry to Jersey, 2017

£2.2bn contribution by Jersey’s finance industry to the Island’s GDP in 2015

13,270 professionals directly employed in the finance industry

Source: States of Jersey, Labour Market Report, June 2017

Jersey Finance Annual Review 2017

Marketing Events and Communications Building on our data-driven approach to marketing we continued to extend our reach across target audiences, with integrated and future focussed campaigns. Events Through our structured programme of activity, we hosted more events in 2017 than 2016. We sponsored fewer third party events to allow us to deliver more opportunities for Member firms to engage with our Jersey Finance hosted programme in key market regions. We held 44 events in total, attracting over 1,500 delegates from Member firms. A few highlights from our 2017 events programme: ■ Our Private Wealth flagship conference led the way this year attracting the largest numbers yet for a Jersey Finance event. 433 delegates checked in on the day, compared with 342 in 2016 ■ New for 2017, our CEO Connect programme attracted 30 CEOs, offering exclusive access to a range of events, dedicated mailshots and advance briefings ahead of report launches. We held six roundtables and two strategic consultations with representatives from the Government of Jersey, the regulator and PR experts ■ With increased focus on the Gulf Cooperation Council (GCC) this year, our Saudi event was a real success, attracting 30 delegates from Member firms, a +200% increase on the event held in the previous year. For many of our Members, this was their first time travelling to Saudi Arabia. ■ We held our first ever event in Lagos, Nigeria in 2017: the Private Wealth in Africa Conference

■ Our ‘New Perspectives Asia Roadshow’ in Shanghai and Hong Kong attracted representatives from 28 Member firms, of which seven were Jersey-based ■ We sponsored the Super Return US event held in Boston, Massachusetts – North America’s largest private equity and venture capital gathering which saw +2,000 decision makers through its doors ■ Record attendance at our GCC (40 attendees) and Africa (28 attendees) Community of Interest Group (CofI) meetings in July, highlighted the value of these events for our Members and gave insight into the importance of these regions as key markets for our Jersey firms ■ Another new addition to our events programme in 2017 was our USA CofI, which attracted 21 attendees from Member firms

7,900 attendees at

Jersey Finance and sponsored events

44 Jersey

Finance events

sponsored third-party events

Marketing Events and Communications

Communications Media coverage, which would have cost nearly ÂŁ1.6m to buy through advertising, was generated by providing comment, interviews and articles for local, national, international and trade media. During the year, 99% of Jersey-related media coverage was rated as having positive or neutral editorial sentiment. This was due in part to our ability to provide the media and Member firms with balanced and timely responses which counteracted negative reports from sources such as the International Consortium of Investigative Journalists (ICIJ). We continued to provide expert opinion through interviews, articles and letters and also through the production of factsheets and online reports. During 2017, we worked closely with various partners to create more effective communications and interactions with both local and international audiences. The objectives were to raise awareness of our jurisdiction, to influence and to change perception, and to increase engagement. Our local campaign for example, demonstrated how the finance industry and its staff are proud to be part of Island life, and how it supports the economy and Islanders in building a prosperous future. This valuable work will continue in 2018.

67 interviews

undertaken

72 media releases or statements

Opportunities to see Jersey Finance messages in traditional media

13,856,719 Opportunities to see Jersey Finance messages on social media

1,196,809

Jersey Finance Annual Review 2017

Marketing Digital Channels We set ambitious targets for 2017 to create more engaging content for Members which resulted in a year-on-year increase of 12% in overall visits to the Jersey Finance website. Our social media and website activity focused on Jersey Finance events, with a secondary focus on promoting our research and publications. This resulted in greater engagement with stakeholders and increased traffic to our site, particularly in March and May 2017 when traffic to our website grew by 30%.

Social media Once again in 2017, Jersey Finance’s social media audience was larger that of Guernsey our competitor; 256% larger. By publishing more quality content across LinkedIn and Twitter, our follower base on LinkedIn grew by some 20% through organic and paid-for activity. LinkedIn now accounts for over two-thirds (73%) of our social traffic.

can do to improve our ‘shop window’. In 2018, Jersey Finance will be looking at refreshing the website to encourage more social sharing, improve navigation and the overall experience for web visitors. The Jersey Finance research web pages attracted 841 interactions in 2017, and the number of downloads increased by 199% compared to last year. Our most popular research report to date is ‘Jersey’s Value to Britain 2016’ which was viewed more than 1,000 times.

Spreading the word – our publications Throughout the year, we created a suite of publications to help our Member firms with their business development activities. These included the International Business Files publication which covers private wealth, philanthropy, funds and capital markets, and includes examples of business in these areas related to our target international markets, notably the GCC, China and Africa. The brochure also covers some banks and financial services companies linked to our international markets.

Number of page views in 2017

www.jerseyfinance.je Overall in 2017, we saw a 12% increase in visits to the Jersey Finance website compared to 2016.

Overall

Member Directory

Traffic from the Jersey Finance website to Member sites increased by 25% in 2017. This means we directed just under 27,000 email or website interactions to Member firms. We also saw more Members log into the website this year, up 6% compared to last year.

+15%

+46%

Publications

Technical Updates

+5%

+12%

These statistics tells us that our website content is relevant and useful, but there is still more that we

Marketing Digital Channels

5,000+

We also published a range of factsheets on various products and services as well as introducing a ‘Careers in Finance’ brochure to share with Members, local students and education stakeholders.

page views of the Jersey Finance publication web page, an increase of 5%

During the Paradise Papers period, we provided Members with an impactful ‘Transparency Timeline’ and ‘Jersey The Essentials’ brochure to use in interactions with clients and to reaffirm Jersey’s premium position as a quality international finance centre.

40%

13,000

increase in downloads of Jersey Finance publications

net impressions through ISSUU – our online publications reader

Total number of visitors to Jersey Finance’s website:

13% total increase

+12% USA

Jersey

+49%

+24% Guernsey

+37%

India

+7%

South Africa

+121%

Jersey Finance Annual Review 2017

Market Development The second year of the Jersey Finance four-year business plan launched in 2016 continued to follow the restructured international development programme which focuses on four market areas. Our key frontier markets are the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia. Secondary markets are Nigeria, Kenya and South Africa. Traditional markets are the UK and European Union. Future options are India and Greater China.

Flexibility Many of the most challenging markets to operate in reflect those that are offering the most opportunity for Jersey: Nigeria, Kenya, Saudi Arabia, Kuwait and Greater China. We are tailoring our activity and investment to find these opportunities, and our Members too are increasingly looking outside these established business hubs. USA is a market we are focusing on much more. It is a region that has shown growing interest in Jerseyâ&#x20AC;&#x2122;s evolving funds regime as the EU implements the provisions of the AIFMD.

1,134 gatekeeper meetings across the Jersey Finance team

In September, we hosted our first USA Community of Interest Group, reflecting strong demand from Jersey Finance Members to explore opportunities in the market. We also attended three significant US events focused on funds during 2017.

Strategic approach We took a blended approach of both marketing and business development activity, incorporating a range of both large and bespoke events. This was in addition to 96 days of travel into the most opportune cities across the GCC, Africa and Greater China. We continue to implement the â&#x20AC;&#x2DC;Top 100â&#x20AC;&#x2122; strategy which encourages business development teams to focus on face-to-face meetings with their 100 contacts likely to generate the most value for Jersey. In 2017, there were more than 1,000 meetings with key influencers and gatekeepers undertaken by the Jersey Finance team. This is increasingly complemented by a welcome increase in Member engagement with our regional activities, attracting record numbers of Jersey Members to events in Africa and the GCC. We are also seeing the highest levels of regional support for Jersey Finance activities, which reflects a step-change in how Jersey firms are investing in key markets.

inward investment meetings

Market Development

We continued to develop the Jersey Finance roadshow series in the GCC and Greater China, and also meetings in Africa help to meet this objective. The wider community in each region is targeted by other means such as email, events, web content, social media and print campaigns to familiarise them with Jersey Financeâ&#x20AC;&#x2122;s messages.

UK Representation in London

Europe

Greater China

Representation via Jersey

Hong Kong office and Shanghai representation

India Mumbai representation

GCC Dubai office

USA Fly-in model

Nigeria Representation via Jersey

South Africa

Kenya

Representation via Jersey

Jersey Finance target regions Africa | Greater China | Europe GCC States | USA

364

Member firm meetings

Total meetings by region UK/Europe: 320 GCC States: 283 Africa: 87 Asia: 60

Jersey Finance Annual Review 2017

Market Development in UK and Western Europe

A goal of Jersey Finance’s 201619 Business Plan has been to increase the Island’s share of flat or declining mature markets in the UK and Western Europe, which still account for the largest share of assets and deposits in Jersey. As uncertainty seems to be increasing around the world, international advisors based in London continue to promote Jersey’s expertise and stability to both corporate and family clients wishing to safeguard and grow their assets. This trend has been most clearly illustrated by the increase in large, entrepreneurial family offices selecting Jersey as a centre to not only preserve and protect their wealth but also provide a platform for global investment projects. The UK vote in June 2016 to leave the European Union caused considerable uncertainty about future developments. But as Jersey is neither part of the UK nor Europe, we believe it is well-placed to take advantage of emerging opportunities. As a leading IFC, we are a safe harbour in an uncertain world, with deep pools of world-class expertise and a record of political and fiscal stability.

270

gatekeeper meetings across the region

Meanwhile, Jersey’s position in the EU market for alternative investment funds is proving increasingly attractive to fund managers outside Europe. The date for implementation of the passport access to the EU under the AIFMD recommended by ESMA in 2016 is still unclear. However, Jersey fund managers are continuing to increase sales of alternative investment funds inside the EU through national private placement regimes (NPPRs). The latest Monterey Insight report (November 2017) shows that Jersey has seen a rise of more than 10% over the last year, owing to our flexibility in the fund market. Our two flagship London conferences which promote the funds and private wealth sectors again attracted large audiences in 2017. A new series of targeted roundtables in London complemented the largerscale conferences for both funds and private wealth. We continue to sponsor high profile European conferences, including the BVCA Summit 2017 in London, the Legal Week International Private Client Forum in Lake Como, the Hedge Fund Intelligence European Summit 2017 in Paris, AIMA Global Policy and Regulatory Forum also in Paris, the IBC’s 32nd annual Transcontinental Trusts conference in Geneva and SuperReturn International conference in Berlin.

inward investment meetings across the region

Market Development

Market Development in Kenya, Nigeria and South Africa The secondary frontier category of Jersey Finance’s international market activity targets a group of economies that look likely to provide the next phase of global economic growth. South Africa has been on our priority list for some years, but since 2013-14 promising candidates from Africa now include Kenya and Nigeria. Since the publication of Jersey’s Value to Africa in 2014, there has been a wave of activity in Africa for both Jersey Finance and the Government of Jersey. This continued in 2017, when Rwanda’s Minister of Finance, Claver Gatete, and his delegation visited Jersey in January. In March, Jersey’s Chief Minister, Senator Ian Gorst, carried out the first official visit to Africa by a Chief Minister, visiting South Africa, Kenya and Rwanda for meetings with financial services providers, ministers and political leaders – including the President of Rwanda. Jersey Finance teams have spent 48 days of travel in Kenya, Cape Town, Johannesburg and Lagos. Now in its third year, our Africa Community of Interest group aims to provide market updates to industry whilst gaining a deeper understanding of Members’ priorities, which in turn has helped to tailor our own activities.

gatekeeper meetings across the region

Private wealth Private wealth is a focus for all three of the secondary frontier priority countries with the addition of funds and capital markets for South Africa. In February, Jersey Finance held a private wealth conference in Lagos, Nigeria, entitled ‘Jersey: A Valuable Partnership’. It brought together 75 private wealth lawyers, advisors and other Nigeriabased finance professionals with a delegation of Jersey practitioners who also participated in a series of key stakeholder meetings. Another private wealth event hosted in October in Nairobi provided an opportunity to review common issues facing many Kenyan businesses and families, such as the transition of wealth from one generation to another, current tax issues and the need for good corporate governance. It was attended by members of the local advisory community, including wealth practitioners, lawyers, investment managers and other finance professionals, as well as five Jersey Finance Member firms. In November, a similar event was held in Cape Town, followed by another in Johannesburg. They were attended by 71 participants in Cape Town and 66 in Johannesburg. Nine Jersey delegates travelled to South Africa for these events, along with four of our global partners.

More than

350

intermediaries at Jersey Finance private wealth events across the region

Jersey Finance Annual Review 2017

Market Development in Greater China and India

For Greater China and India, the key sectors are banking, funds and private wealth, plus capital markets for China.

more than 60 advisors and firms in Hong Kong, Singapore and Mainland China. Its report, ‘How to Service Chinese Wealth as it Goes Global’ (see Research and Innovation), provided valuable insights into the priorities of wealthy families in Mainland China and of the issues they face in wealth planning.

Jersey Finance market development professionals spent 16 days on the ground in Greater China during 2017, and another seven in India.

The Jersey Finance Asia Roadshow held two events in June to discuss some of the key issues shaping global financial markets and the growth of the Asian market. Entitled ‘New Perspectives’, and led by Geoff Cook, the first was in Shanghai and the second in Hong Kong and brought together a range of world-class industry professionals. Both were attended by record numbers – 66 in Shanghai and 145 in Hong Kong.

Greater China After three decades of sustained high growth, China has emerged as a key opportunity for Jersey. This opportunity will only continue and broaden despite the anticipated economic slow-down and current strengthening of capital controls. The One Belt, One Road initiative from the Chinese Government will offer investment opportunities for infrastructure and we have highlighted Jersey’s role as a conduit for such investments. The last few years have seen explosive growth in understanding among wealthy Chinese investors of the potential for structuring wealth and succession planning where we face competition from established IFCs in Asia and the Caribbean. However, Jersey has benefited from a flight to quality as a result of the withdrawal of some banking services from Caribbean-based IFCs. To learn more about the changing landscape, Jersey Finance again joined forces with Hubbis to survey

gatekeeper meetings across the region

We also sponsored two events in the region in November: the Hubbis China Wealth Management Forum in Shanghai and the STEP Asia Conference in Singapore.

India Jersey Finance hosted an India Community of Interest Group at the start of 2017, where one of the topics was what Indian high net worth individuals look for while structuring overseas and perspectives on private client practice in India. According to Member feedback, the launch of the Jersey Private Fund (JPF) structure has opened up opportunities with clients based in India. Jersey continues to be used for structuring inward investment into India.

200+

at the 2017 Jersey Finance Asia Roadshow, a record number of attendees

Market Development

Market Development in Gulf Cooperation Council States (GCC) The key region in the Middle East for Jersey Finance is the GCC market, with particular focus on the United Arab Emirates (UAE), the Kingdom of Saudi Arabia and Kuwait.

Kong wealth management consultancy, to find out more about the needs of wealthy families in the GCC. Their research, involving more than 90 practitioners working in the market, is summarised in ‘Driving Forces Behind GCC HNW Investors’ (see Research and Innovation).

According to recent independent research, Jersey is custodian to some £100 billion of assets from the region, which has a growing appetite for the Island’s alternative fund and real estate expertise. According to leading commentators, Jersey is among the top jurisdictions of choice for GCC investors. An encouraging emerging trend in the region is the return of private wealth work, most typically from Caribbean jurisdictions, with the fall in the pound making Jersey look like a better value choice.

The 2017 Jersey Finance annual GCC Roadshow was launched in May in Dubai and Kuwait. Entitled ‘New Perspectives’, it explored topics such as Islamic finance, family offices and real estate. Targeting local advisors and practitioners, it also unveiled the findings of the Jersey Finance/Hubbis white paper on the evolving needs of wealthy GCC clients. The attendance by 18 representatives from Jersey was the highest so far in the roadshow series.

The GCC Roadshow

Cormac Sheedy’s appointment as a Business Development Director for the GCC, based in Dubai, has strengthened the Jersey Finance profile in the market, and deepened our regional coverage. In 2017, Jersey Finance business development professionals spent 56 days of travel in the GCC markets outside our Dubai base. There are now more than 40 Jersey firms active in the region.

This was followed by three evening receptions in September to build business relationships and update participants on progress. The first was in Dubai, and the other two in Riyadh and Jeddah in Saudi Arabia. The Riyadh event was arranged and hosted with the British Embassy, and Jeddah’s with the British Consulate General. The Saudi events attracted 30 Member firm representatives from Jersey.

With family businesses playing a vital role across the Middle East, Jersey Finance asked Hubbis, a Hong

Jersey Finance also sponsored the STEP Arabia Conference in November, held in Dubai.

283

gatekeeper meetings across the region

2017 GCC Roadshow attracts record number of Jersey attendees

Jersey Finance Annual Review 2017

Private Wealth Private wealth conference Record numbers were in attendance for the 2017 Jersey Finance Private Wealth Conference in London on 16 May. Almost 450 industry professionals signed up for our flagship conference which was entitled ‘A New Harmony’, on how the international wealth management industry has been responding to unprecedented market disruption, regulatory change and the rise of post-truth politics. Richard Hay, partner at Stikeman Elliot, delivered an engaging keynote speech suggesting that Brexit could turn into a sizeable opportunity for Jersey. He argued growth in global wealth combined with London’s continued dominance as a financial centre and Jersey’s successful experience in implementing anti-money laundering and financial crime initiatives could provide access to highly valuable global capital as the UK’s negotiations progressed. Jason Sharman, Cambridge University Professor of International Relations, denounced the everincreasing amount of regulation which he said was largely ‘window dressing’. He gave as an example public beneficial ownership registers that rely on self-reporting, and added that the ‘industry of numbers’ often resulted in misleading estimates of illicit activity.

357

Jersey Foundations

The BBC broadcaster Nick Robinson moderated the conference and gave a briefing about what was happening on Brexit, while the renowned behavioural economist and journalist Tim Harford explained how leaders and innovators can turn failure into success. We also sponsored seven private wealth events organised by other organisations in 2017, including the Legal Week International Private Client Forum and Investing in Africa.

Government consultation on trusts laws Discussions continue on proposals for a seventh set of amendments to the Trusts (Jersey) Law 1984. The Government has been working with Jersey Finance’s Trusts Law Working Group, which brings together leading practitioners on the Island. After consultations in 2016, the Government published the responses and a policy document in January 2017 setting out the changes it proposes to bring forward. We expect the ‘Trust 7’ amendments to Jersey’s Trust Law to be lodged in early 2018.

1,252

Members of the Society of Trust and Estate Practitioners (STEP)

Private Wealth

UK Register of Trusts The UK Government enacted new regulations in June to create a UK Register of Beneficial Owners of Trusts. The EU’s Fourth Anti-Money Laundering Directive, which became law in 2015, required member states to keep a register of trusts in order to increase the transparency of companies, trusts and other structures. Non-UK resident trusts may be required to register for any tax year when the trust receives UK income or the trustees are liable to pay income or capital taxes on UK assets. Trustees will be required to provide information when registering of the settlor(s), trustees, beneficiaries, others exercising effective control and all other potential beneficiaries. General information on the nature of the trust will also be required, including its assets, the country where it is tax resident and the place where it is administered. At one stage, the EU was considering a requirement for member states to keep central beneficial ownership registers of corporate and other legal entities such as trusts which should be open to a wider range of people with a ‘legitimate interest’ such as journalists. At present, access to the UK register is restricted to law enforcement officers who need to combat the misuse of trusts. Amendments to the Fourth Anti-Money Laundering Directive were agreed by the European Parliament and Council in December 2017. These amendments provided, amongst other things, that those with a ‘legitimate interest’ be permitted to request beneficial ownership details of “commercial trusts” i.e. trusts that are beneficial owners of companies.

UK legislation on facilitating tax evasion The UK’s Criminal Finance Act 2017 has created a Corporate Criminal Offence of the Failure to Prevent the Facilitation of Tax Evasion (CCO), which became effective from 30 September. It will affect any associated person such as an employee, agent, contractor or subsidiary who facilitates tax evasion by a third party. Any group which has a business in the UK, people acting on its behalf there, or business transactions with UK-based persons can be at risk of falling foul of the new requirements. The tax evasion can be of any tax, anywhere in the world, and the facilitation can be carried out anywhere in the world. Unless the business can show it has reasonable procedures to prevent the facilitation of tax evasion by people acting on its behalf, prosecution could result in a corporate criminal conviction and unlimited fines.

Foundations The number of foundations formed in Jersey had reached 357 as at December 2017, a 9% increase over the year. Our Jersey Finance Foundations Law Working Group reconvened in 2017 to discuss proposed enhancements to the Foundations (Jersey) Law 2009. The Working Group has identified a number of proposals which would, if consulted on and subsequently adopted, help to maintain Jersey’s leading position in this area.

Jersey will continue to work with the UK Government on the issue of beneficial ownership. It is interesting, also, that a French Supreme Court ruling challenged its government’s public register of trusts under the European Convention on Human Rights.

836

regulated trust company businesses

£400bn of assets established by private individuals

Jersey Finance Annual Review 2017

Funds The Monterey Jersey Fund Report reported in November that the total net asset value of Jersey funds had risen by 14.7% to US$346.5 billion in the year to 30 June. In the same report, the total number of regulated Jersey serviced funds increased from 1,162 to 1,201 over the year. There were 227 disclosed fund promoters in Jersey at the end of June, with the most popular asset classes remaining private equity (24%), hedge (18%) and real estate (14%). There has been significant growth in the establishment of managers of substance on the Island, as managers look for a strong and stable regime that is open to fund businesses. High profile arrivals, in addition to the SoftBank fund, included Permira Partners, Brookbay and Yield Solutions.

and the increased allocation to alternative investments which will strengthen the attraction of Jersey’s market access arrangements with Europe. Radio 4’s Today programme presenter, Nick Robinson, moderated the conference and gave a briefing on Brexit, while the renowned behavioural economist and journalist Tim Harford explained how leaders and innovators can turn failure into success. We also sponsored five funds events organised by other organisations in 2017, including the AIMA Canada summit, the BVCA Summit and SuperReturn International.

Annual funds conference

The Jersey Private Fund

The Jersey Finance Annual Funds Conference 2017 was held in London on 21 March, and entitled ‘New Perspectives’. It examined the significant geopolitical shifts under way, and the political, market and regulatory implications for the global funds industry.

Following significant discussions between industry, the regulator and the government, a new regulatory regime for private funds was announced by the Jersey Financial Services Commission on 15 March. The Jersey Private Fund consolidates and streamlines the Island’s funds legislation and regulatory processes, introducing a more flexible and versatile framework which will improve the speed and ease with which funds are marketed to professional investors.

Almost 400 professionals attended, with speakers including Jonathan Bullock, Director of SoftBank Vision Fund which has selected a Jersey fund structure for what is believed to be the largest fund in the world. Other subjects on the agenda were the new Jersey Private Fund launched in early March,

$346.5bn net asset

value of regulated funds under administration in Quarter 3 2017 Source: Monterey Jersey Fund Report, 2017

131

authorised alternative investment fund managers Source: JFSC, Q3 2017

Funds

It enables funds with up to 50 investors to take advantage of a fast-track authorisation process and proportionate regulatory requirements. A 48-hour turnaround for authorisation is promised if all the criteria are met, which recognises that speed to market will give the new Jersey Private Fund a strong competitive advantage. The framework ensures continued compliance with international standards by requiring the appointment of a Jersey-based administrator. The Jersey Private Fund, which can be open-ended or closed-ended and any type of investment vehicle, will be available to managers seeking to market funds to European Union investors through national private placement regimes (NPPRs). This has been a route which has seen strong growth for Jersey’s alternative funds through Alternative Investment Fund Managers Directive (AIFMD) (see below). The Jersey Private Fund is more flexible, faster to establish and has more beneficial features than the three private fund regimes it has replaced. Those regimes can continue to operate under their current regimes until the end of their natural lives, or can apply to be converted into a Jersey Private Fund or any other type of Jersey fund. This gives Jersey fund promoters a wide range of options, with a new manager-led Jersey Alternative Investment Fund already in the pipeline.

AIFMD In July 2016, the European Securities and Markets Authority (ESMA) recommended that Jersey be among the first group of ‘third countries’ granted a passport to market the Island’s alternative investment funds throughout the EU under the AIFMD. Since that time, the EU and Britain have allocated policy resources to focus on the pursuit of Brexit, which in turn has seen ESMA pause the process. Jersey continues to pursue equivalence and awaits progress. While there is no formal timeline

now in place, Jersey alternative investment funds continue to market through NPPRs to EU investors in member states where there is a bilateral agreement with Jersey. There are more than 276 alternative investment funds and 131 authorised alternative investment fund managers marketing into the EU through Jersey as of 30 June. As a percentage of the whole, the majority of those funds are marketing into the UK. As Brexit negotiations continue, Jersey has taken the approach of ‘wait and see’ while assuming to pursue equivalence at the appropriate time.

Largest-ever investment fund comes to Jersey Japan’s SoftBank Group, a multinational telecommunications and internet business, has selected Jersey for the structuring of its new Vision Fund which will invest in future-focused global technology. Announced in October 2016, it has raised over US$93 billion in committed capital from some of the world’s largest sovereign wealth funds and technology giants, making it the world’s largestever investment fund. Carey Olsen Jersey advised on the legal and regulatory aspects of the fund’s establishment and regulatory authorisation. Aztec Group, the fund and corporate services provider, managed the establishment of its operational, governance and accounting framework and will provide administrative services to support its activities and investors. SoftBank’s choice of Jersey is expected to lead to more funds domiciling on the Island, attracted by its fast-track authorisation process and availability of high quality service providers.

276

379

marketed into Europe

attended Jersey Finance’s flagship London conference

alternative investment funds

Source: JFSC, Q3 2017

senior professionals

Jersey Finance Annual Review 2017

Banking In the nine years since the global financial crisis, Jersey’s banking sector has gone through a period of rationalisation, in preparation for growth. Banks around the world have been consolidating the number of licences they hold in individual jurisdictions, driven mainly by factors such as costcutting and changes in banking regulation. This trend has been reflected in Jersey with a fall in UK and other EU licences over the last five years, including two over the 12-month period to the end of September, but pleasingly the Island has retained its strong representation of major banking groups. Parent groups of the Island’s banks continue to find it attractive to raise deposits through Jersey to improve their bank-wide liquidity. For example, the ring fencing of the core activities of UK banks, recommended by the Vickers Report in 2011, will affect five banks in Jersey from January 2019 – and they may need to raise liquidity for their non-ring fenced activities. A modest rise in interest rates may generate further demand with Jersey customer deposits a more cost-effective source of funding. There has already been significant new investment by the parent groups of Jersey banks, as they have seen opportunities for new business. Many banks have benefited from providing support to their organisations’ global client services. Growth is also emerging from Africa and Asia, for example, where wealthy domestic clients are looking to invest outside their home countries, and are attracted to Jersey as a reputable IFC with high regulatory standards. Other banks, meanwhile, find they can earn strong revenues from offering international banking services from Jersey and make a strong contribution to their bank’s overall performance.

banking licences - a reduction of two through natural consolidation and retrenchment

Banking Agenda 2025 Jersey Finance’s Banking Agenda 2025 is now underway. The three forward-thinking strategic priorities are: to ensure that Jersey emerges as an IFC of choice; to extend and increase the value from the products and services provided by Jersey’s banks; and to maintain customer service and competitiveness through digitisation, innovation and new business models. The strategy was developed from the Future of Banking Review, which used interviews and workshops to involve a wide range of stakeholders, including banks, professional firms, government and the regulator. We have now engaged two dedicated consultants with senior banking experience to firm up the strategic options and implement the delivery plan. Public and private sector investment in technology and digital infrastructure is already helping to keep costs down and enhance customer experience, but there is more to be done. We will renew our marketing efforts in pursuit of diversity of geographical spread and sectors, recognising that a dynamic, global banking sector is essential to the success of other pillars of Jersey’s finance industry such as trusts, funds and corporate services. There are also new opportunities for Jersey’s banks to support the continuing growth of those other sectors.

Diverse international representation* UK: 7 Other EU: 5 North America: 6 Middle East: 2 Switzerland: 3 Africa: 3 Asia: 1

* Geographical analysis of licensed banks as at 30 September 2017

Banking

Examples of other developments Although not a full list, there were some changes to banking regulations and legislation in 2017 which affected Jersey’s banks.

Bank recovery and resolution An important step for Jersey’s banks was taken in May when the Bank (Recovery and Resolution) (Jersey) Law 2017 came into force. This set out a new bank resolution regime in line with developments internationally, in particular, those of the EU. The aim is to ensure the continuity of critical banking functions, to avoid financial instability, to minimise public funding for failing banks, and to protect clients’ assets. Its passage is a signal that Jersey’s finance industry operates in a substantial IFC capable of weathering financial crises in the future.

Dormant bank accounts The Dormant Bank Accounts (Jersey) Law 2017 came into force in July. Guidance notes were published by the Chief Minister’s Department on 22 September, setting out the requirements for a bank in relation to notification of dormant accounts, making a transfer to the Jersey Reclaim Fund and thereafter seeking any reimbursement from the fund. The guidance notes also address transitional provisions.

The Single European Payments Area Jersey passed legislation in 2015 to become a member of the Single European Payments Area (SEPA), allowing Jersey banks to make euro payments to other banks in SEPA more easily, efficiently and cheaply. Amendments to the legislation were lodged in October to extend the reach of SEPA and provide new consumer protection from January 2018, ensuring that our banks can continue to handle efficient cross-border payments and support trade in SEPA.

£111.5 bn in deposits

in September 2016 - a 2% decrease over the previous year (£113.9bn)

More than

13,000 highlyskilled and experienced finance professionals

Jersey Finance Annual Review 2017

Capital Markets In 2017, Jersey remained the jurisdiction of choice for corporate entities seeking to list, with the greatest number of FTSE 100 companies and AIM companies registered outside the UK. The Island is home to companies listed on stock exchanges in London, Amsterdam, Hong Kong, Toronto and New York. The 89 companies had a total market capitalisation £323 billion at the end of December 2017. Notable names of Jersey Holding Companies include Glencore Xstrata, one of the world’s largest global diversified natural resource companies, which is listed in London and Hong Kong; Lydian International Limited, an emerging gold developer, is listed in Toronto; and Randgold Resources, listed in London and New York, is a gold mining business operating in West Africa and DRC.

Jersey Holding Companies listed in 2017 included: ■ Caledonia Mining Corporation Plc (CMCL) – a mining, exploration and development company already listed on the AIM and on NYSE American on 27 July 2017; ■ EJF Investments Ltd (EJFI) – a closed-end investment company investing in assets benefiting from regulatory and structural change in the financial services sector, listed on the London Stock Exchange main market on 7 April; and ■ Quiz Plc (QUIZ) – a women’s clothing brand, listed on AIM on 28 July. Since 2009, Jersey has been recognised as an approved jurisdiction for listing on the Hong Kong Stock Exchange. In 2016, the Johannesburg, Luxembourg and Cyprus stock exchanges were added to the list of approved jurisdictions under the Companies (Transfer of Securities) (Exemptions) (Jersey) Order 2014. Two more were added in 2017: Mauritius and NYSE American. More generally, Jersey remains an attractive place for companies to incorporate. During the first half of 2017, almost 1,300 new companies were incorporated on the Island, bringing the total on the register to 32,949 at the end of September.

Jersey companies listed on global exchanges

£323bn market capitalisation

Capital Markets

35 38 1 14 quoted on AIM

listed on the main London Stock Exchange

listed on the Specialist Fund Market

listed on other leading international exchanges

companies listed worldwide

quoted in London valued at almost £196 billion

stock exchanges

notable Jersey holding companies

Davictus Plc western food and beverage franchises in SE Asia and the Far East

Lydian International Limited

Work continues on prospectus requirements and on further amendments to the Companies Law.

total number of Jersey companies on the registry

gold mining operations in West Africa and DRC

an emerging gold developer

Work is still under way on the demerger regulations, as anticipated by the ‘Companies 11’ amendments in 2014. A consultation paper on draft regulations is now open and closed on 19 January 2018. A debate will follow in the States of Jersey Assembly in 2018. Once enacted, the new regulations will further increase the flexibility and international appeal of Jersey companies.

32,949

Randgold Resources

The International Stock Exchange The Channel Islands Securities Exchange (CISE) completed a rebranding in March as The International Stock Exchange (TISE), ahead of making its debut on the Isle of Man. There were 705 new listings on TISE during 2017, which was an increase of 40% year-on-year and took the total of number of listed securities to 2,511 at 31 December 2017.

No.1

for non-UK companies on FTSE 100 for four years

Jersey Finance Annual Review 2017

Education and Employment Jersey’s finance industry is a major contributor to the Island’s economy, providing work for more than 13,000 people, spending around £370 million annually on goods and services in Jersey and contributing £420 million a year in taxes. The Government’s Survey of Financial Institutions, published in June 2017, showed that despite a slight annual fall in its overall contribution, the finance industry continues to be the driving force in Jersey’s economy, with strong employment growth and increased expenditure on local goods and services. Employment figures have reached pre-crisis levels, with more than 300 local students being recruited each year for the past four years. Recruitment of local staff from school or university in 2016 was 39% higher than in 2007, and 45% more than in 2012. Jersey’s Labour Market Statistics in June 2017 showed that employment in the finance sector was up by 250 people to June 2016 on an annualised basis. Total employment in the sector at 13,270 was the highest since December 2008. Trust and

For every

10 jobs in Finance nearly as many more are created elsewhere in the community

company administration staff numbers rose in 2017 to the highest level in this sub-sector to date. Jersey Finance ran an Employment and Growth survey with Member firms. Responses to the survey were voluntary and 60 firms responded. 70% of respondents to the Employment and Growth survey indicated that their headcount would grow in the next 12 months. Over the next five years, the survey projected growth of over 800 new jobs in the finance sector. The majority of these new jobs are expected to be in trust and company services, private equity funds and real estate funds, with the greatest demand for entry-level admin/officer roles. The majority (82%) of new jobs were expected to be filled by people who were already Island residents.

Education initiatives in 2017 Research in 2017 into islanders’ perception of the finance sector and careers in the industry helped shape some of our key initiatives this year to raise awareness among young people about the benefits of working in the industry. We are committed to empowering young people through our education initiatives to attract them to our industry.

30% increase in traffic

to the careers section on our website

Education and Employment

■ Our ‘Life in Finance’ scheme enables Year-12 students to experience work in the finance industry and is entering it’s sixth year. In 2017, 36 Year-12 students participated in work placement programmes with 26 Member firms. ■ We attended the Highlands Employers Fair and Fresher’s Fayre. Plans have been confirmed for attendance at all school sixth-form fairs in 2018 to raise further awareness among young islanders of career options in finance. In addition, we are participating again in Jersey’s Project Trident work experience scheme to help 15-year-olds learn more about jobs in our industry. ■ At the 2017 Jersey Skills Show, we spoke to many students and career switchers, advising them of the steps they could take to find out more about the industry. Four Member firms joined us to promote their own education/careers programmes directly to young people.

3% 22%

Employment by sector in Jersey

13%

10% 13%

■ A new Careers in Finance brochure was created and shared, with key stakeholders including Member firms, secondary schools and Careers Jersey. ■ A new student newsletter ‘A Taste of Finance’ was also produced and distributed to key careers contacts in schools. 2017 was a year for Jersey Finance to reflect and build on the successes of our education programme. For 2018, our aim is to deliver a more dynamic and extensive outreach programme by broadening and deepening our relationships with stakeholders. Working with these key stakeholders and young people will help generate more interest in the opportunities available and set our industry up for future success.

22% Financial and legal activities

9% Construction and quarrying

13% Public sector overall (excluding former and current trading committees)

8% Miscellaneous business activities

13% Education, health and other services (private sector)

800

new jobs in the finance sector over the next five years

1,155

3% Agriculture and fishing 2% Manufacturing

13% Wholesale and retail trades

1% Computer and related activities

10% Hotels, bars and restaurants

1% Electricity, gas and water

13%

More than

5% Transport, storage and communication

82%

of new roles anticipated as being filled by Island residents

Jersey Finance Annual Review 2017

Membersâ&#x20AC;&#x2122;and Gatekeepersâ&#x20AC;&#x2122; Feedback About the surveys Jersey Finance has again commissioned Ipsos MORI to conduct a survey among Members to measure opinions and awareness of our organisation, and gather feedback on our activities in 2017. A second Ipsos MORI survey sought the answers to similar questions from our gatekeepers, a wider group of stakeholders identified as potentially able to bring in new business for our Members. Both surveys sought to benchmark Jersey Finance against key competitors, and assess our business development activities and communication in Europe, Asia, the Gulf Cooperation Council (GCC) countries, India and Africa. In both cases, we were able to compare the findings with those of the equivalent 2016 surveys.

Findings Jersey Finance receives high levels of familiarity and favourability from both Members and gatekeepers in comparison with promotional bodies of other international finance centres. And both groups are prepared to speak highly of Jersey Finance â&#x20AC;&#x201C; in many cases, even if not asked about Jersey Finance.

98%

of Members are favourable towards Jersey Finance

Members are motivated to do so for our efforts to promote Jersey as an IFC and active support for the finance industry. Gatekeepers reported that they were making greater use of Jersey as an IFC than in 2016, rating the Island highly on a variety of issues such as its positive reputation, adherence to international standards and mature legal framework. And it is gratifying to learn that they appear to be more engaged with Jersey Finance than with the promotional bodies of other IFCs. While the selection of the gatekeepers surveyed was limited to those who had interacted with us in the previous 12 months, their feedback is useful to assess our engagement strategy. The next few pages provide more detail on the findings from both surveys. Overall, Members appear to feel that Jersey Finance is performing well on promoting the Island and the finance sector, and are very happy with the work we undertake on their behalf. Among gatekeepers, strong ratings of Jersey Finance across all areas enhanced our leading reputation in 2017. Both surveys also provide valuable feedback which we will use in planning our work for 2018.

96%

of Members would speak highly of Jersey Finance

Members’ and Gatekeepers’ Feedback

How favourable or unfavourable is your overall opinion of Jersey Finance? Very favourable Mainly favourable Neither favourable nor unfavourable Members Very favourable Don’t Know Mainly favourable Very unfavourable Neither favourable nor Mainly unfavourable unfavourable Very favourable Don’t Know Mainly favourable Very unfavourable Neither favourable nor Mainly unfavourable unfavourable Know To what extent wouldDon’t you speak highly Speak highly without Very unfavourable or critically of Jerseybeing Finance? asked Mainly unfavourable Speak highly if asked Be neutral Speak highly without Don’t know being asked if asked Speak critically highly if asked Speak critically without Be neutral Members Speak highly without being know asked Don’t being asked critically if asked Speak highly if asked Speak critically without Be neutral being know asked Don’t Speak critically if asked Very well Speak critically without Fairly well being asked How well do you know JustJersey a little Heardwell about it Finance as an organisation? Very Never well heard about it Fairly Don’t know Just a little Heardwell about it Very Never well heard about it Fairly Don’t know Just a little Members Heard about it Never heard about it Don’t know

87%

of gatekeepers are favourable towards Jersey Finance

Gatekeepers

Gatekeepers are more favourable towards Jersey Finance than competitors’ promotional bodies, and almost all Members have a positive view of us.

Gatekeepers

Gatekeepers speak more highly of Jersey Finance than of competitors’ promotional bodies, and no Members would speak critically, even if asked.

Gatekeepers

Gatekeepers are more familiar with Jersey Finance than with competitors’ promotional bodies, and three-quarters of Members feel they know us very well.

81%

of gatekeepers would speak highly of Jersey Finance

Jersey Finance Annual Review 2017 Mature and sophisticated legal framework

Members’ Feedback

Tax neutrality Good quality of professional services providers available

Positive reputation of the centre

To carry out the Members’ survey, Ipsos MORI first contacted Members by email and then conducted 20-minute quantitative telephone interviews. A total of 100 Members participated in the study, representing 62% of the membership. The fieldwork was carried out between 4 October and 8 November.

Findings The survey showed that Jersey Finance remains well-known and well-liked by Members, with 98% favourable towards us. Promoting the industry remains our top success in their eyes, followed by supporting the Island’s economy and working to develop its financial legislation and regulation. The majority of Members are neutral on our success at creating platforms for market access and bringing in new entrants. The relatively high proportion of people responding with ‘don’t know’ in these areas suggests that a lack of information is the cause, rather than poor performance. Members’ top three priorities for strengthening their interactions with us are: ■ More information on international markets and growth opportunities; ■ Technical developments that affect businesses in Jersey; and ■ Greater understanding of Members’ individual business strategies. On communications from Jersey Finance, Members identify reports or briefings, newsletters, our website and our advertising as their most common forms of interaction. Their interaction with Jersey Finance’s digital media is rising – a little in the case of the website and almost 30% for social media channels such as blogs, social networking sites, Twitter and others.

79%*

of Members interviewed consider Jersey Finance to be effective at presenting a positive view of Jersey’s finance industry * rated between 8 - 10 on a 10 point scale

Members wereAdherence asked to rate our 2017 to international standards communications on several criteria. Quality of Highwith quality of services content scored very highly 75% rating it 8-10 on a 10-point scale – up from 63% in 2016. Whether Comprehensive and robust business it was pitched atand ancommunication appropriateinfrastructure level was given the same rating by Being 73%atoftheMembers, and 68% said the forefront of digitisation and technological innovationmatter. same on whether it was relevant subject Most Members attended Jersey Finance events in 2017, in some cases more than six in the last year – and 89% of those attending thought positively of the organisation afterwards. The most popular events among Members in 2017 were the Members’ Strategic Update in May, the Annual Review and Member Update, and the Brexit update. Just over a third of those surveyed attended the Annual Private Wealth conference, and slightly less than a third the Annual Funds Conference – our flagship events in London.

Members rated Jersey Finance’s performance between 0 (very poor) and 10 (very good): Presenting a positive view of Jersey’s finance industry Supporting the growth of Jersey’s economy Working together to develop Jersey financial legislation and regulation Encouraging local talent Facilitating new clients and business opportunities Bringing new entrants

Don’t Know

97%

read a report or briefing commissioned by Jersey Finance

Members’ Feedback

You said you would speak highly of Jersey Finance, why is that?

“

Their outward-facing strategy. They bring the industry with them. They are very open to companies in Jersey joining them on any ventures they are involved in. This is crucial as an Island. They are very good at making the industry aware of positive and negative things that happen within the industry, whether it’s good or poor publicity.

“

I think it’s a proactive organisation that is engaging with the broader financial services industry well. Adds value to our ability to market our own operations on the Island overall. It’s very good at providing strong evidence and backing for the strength of Jersey as a location.

”

” “

I think they have a good reputation and are doing a good job of promoting the Island and the financial services that we offer. They do defend the Island’s industry promptly when the Island/ jurisdiction comes under criticisms.

What would you say are the main opportunities for Jersey in relation to its competitor jurisdictions?

“

Highly regulated. Politically stable. Sophisticated legal system. Reasonable court access. Good legal system in terms of product laws. Good financial system – i.e. banks. Quality staff. Benevolent Government. Inclement environment.

”

What would you say are the main challenges for Jersey in relation to its competitor jurisdictions?

“

I think there’s a constant pressure from on-shore jurisdictions which don’t understand exactly what a tax neutral jurisdiction is. Increasing regulation and compliance burden. Technology – admin that goes on here. Technology means that a lot of this stuff can be based somewhere else.

”

“

”

Jersey stands to be a major success and continues to be one in private client services. There is a significant opportunity to attract more organisations to Jersey’s shore for international family offices where relevant for their structures.

”

“

A strong reputation for maintaining and upholding standards, particularly in tax, transparency and crime.

“

”

To ensure that Jersey doesn’t fall on any blacklists internationally.

“

”

Regulation. Pricing as a result and the cost of doing business. Access to talent.

”

Jersey Finance Annual Review 2017

Gatekeepers’ Feedback Gatekeepers who had interacted with Jersey Finance in the last 12 months were sent an email inviting them to take part in a ten-minute online study. A total of 96 gatekeepers participated in the study, from the following regions: Europe (27), Asia (24), GCC (32), India (1) and Africa (12). There were no participants from North America. The fieldwork was carried out between 23 October and 20 November.

Findings Jersey Finance is held in increasingly high regard by gatekeepers in the 2017 survey. Results show a significant increase in scores for familiarity and being willing to speak highly of us. The majority of gatekeepers across all markets are familiar with Jersey Finance, with scores ranging from 89% in Europe who say they know us at least fairly well, to 58% in Asia. By virtue of our strong performance, we continue to maintain a solid lead over the promotional bodies of

The main reasons that gatekeepers and their clients give for using international finance centres: Mature and sophisticated legal framework Tax neutrality Good quality of professional services providers available Positive reputation of the centre Adherence to international standards

The attributes that an international finance centre should possess, as ranked by gatekeepers and their clients: Private wealth Private wealth structuring and planning structuring and planning Fund formation holding andEstablishing management companies Establishing holding companies Fund formation and management Banking Banking Establishing Establishing listing vehicles listing vehicles

High quality of services

Philanthropy Philanthropy

Comprehensive and robust business and communication infrastructure

Other Finace Islamic

Being at the front of digitisation and technological innovation

Don’t know Other

Don’t know / prefer not to say

Private wealth structuring and planning is the main reason why gatekeepers use an IFC, except in Asia where establishing holding companies comes top.

Adher

Com an

Don’t know

A mature legal framework is most important to gatekeepers in Europe and Asia, while those in the GCC prioritise a positive reputation of the IFC and the smaller group of African gatekeepers say tax Mature and sophisticated neutrality. legal framework

98%

Increased a lot (34%) Increased a little (45%) Stayed the same (10%) Decreased a little (6%) Decreased a lot (5%) Don’t know (0%)

of Members are satisfied with their interactions with Jersey Finance

Tax neutrality Good quality of professional services providers available

89%

Positive reputation of the centre

Adherence to international standards

of gatekeepers interviewed had met, spoken to, or had contact with a Jersey Finance representative in the previous 12 months High quality of services

Comprehensive and robust business and communication infrastructure Being at the forefront of digitisation and technological innovation

Gatekeepers’ Feedback

rivate wealth and planning

competitors across all markets. Considerably more

hing holding companies gatekeepers are using Jersey as an IFC compared to

last year: Jersey emerged from the survey as top IFC

nd formation in Europe, the GCC and Africa. Compared with 2016, management

gatekeepers report increased use of Jersey as an IFC, Banking particularly in Africa and Europe. Private wealth

structuring and planning Establishing Private wealth structuring and planning is rated ting vehicles Establishing holding Private wealth

by 50% of the gatekeepers as the main reason

companies structuring and planning

they holding or their clients consider using an IFC, Philanthropy why Establishing Fund formation

though opinions andcompanies management vary across markets. The most

slamic Finace important Fund formation attributes sought when selecting an Banking and management

IFC are a Banking mature legal framework, tax neutrality Establishing and good quality listing vehicles professional services providers. Establishing listing vehicles highly on most of the attributes, with Jersey is rated Philanthropy Don’t know improvements Philanthropy seen in professional services and Islamic Finace business Islamicand Finace communication infrastructure. Jersey recieved comparatively low scores for digitisation Other Other Other

Don’t Don’t knowknow

Mature and sophisticated legal framework

and technical innovations, so there is room for improvement in this regard.Tax neutrality

Good proportion quality of professional Since 2016, a higher of the gatekeepers providers available have met, spokenservices with or had contact with Jersey Finance. More had also attended an event organised Positive reputation of the centre by Jersey Finance orMature sponsored by us, and they and sophisticated legal framework were generally rated highly. Westandards far outperform Adherence to international wealt Mature and sophisticated competitors’ promotional bodies on regular contact, structuringPrivate Tax neutrality and plannin legal framework and the vast majority of gatekeepers speak highly of Fund formatio High quality of services quality of professional Tax Good neutrality and managemen services available the effectiveness of our providers representatives. Good quality of professional Comprehensive and services providers available

robust business

Positive reputation of the centre Our marketing and communications are viewed and communication infrastructure Positive reputation of the centre positively byAdherence gatekeepers, withstandards the majority agreeing to international Being at the front of digitisation that communications contain relevant, Adherence to international standards and technological innovationuser-friendly, High quality of services high quality and visually appealing content.

Establishing holdin companie

Bankin

Establishin listing vehicle

High quality of services

Don’t knowand / prefer not to say Comprehensive robust business

Comprehensive and and robust business communication infrastructure and communication infrastructure

Being at the front of digitisation

Being at the front of digitisation and technological innovation and technological innovation

Don’t know Don’t know / prefer not to say / prefer not to say

The proportion of gatekeepers who rate Jersey as ‘good’ or ‘very good’ for possessing key attributes:

Use of Jersey as an international finance centre in the last 12 months:

Mature and sophisticated Mature and sophisticated legal framework legal framework

Mature and sophisticated legal framework

Tax neutralityTax neutrality

Good quality of professional Tax neutrality services providers available

Good quality of professional Good quality of professional services providers available Positive reputation of the centre services providers available

Adherence to international standards Positive reputation of the centre Positive reputation of the centre

Increased a lot (34%) Increased a lot (34%) Increased a little (45%) Increased a lot (34%) Stayed the same (10%) Increased a little (45%) a little (45%) Decreased a littleIncreased (6%) Stayed the same Stayed the same (10%) (10%) GatekeepersDecreased a lot (5%) Decreased little (6%) Don’t know (0%) Decreased a littlea(6%)

Decreased a lot (5%) Decreased a lot Don’t know (0%)

(5%) Don’t know (0%)

High quality of services

Adherence to international standards

Adherence to international standards Comprehensive and robust business and communication infrastructure

High quality of services

High

Being at the forefront of digitisation quality of andservices technological innovation

Comprehensive and robust business and communication infrastructure

Comprehensive and robust business Being at the forefront of digitisation and communication infrastructure and technological innovation

Being at the forefront of digitisation Jersey is rated highly on most attributes, with and technological innovation

improvements in professional services and in business and communications infrastructure, but has room to improve on digitisation and technological innovation.

56%

of gatekeepers received a newsletter from Jersey Finance Presenting a positive view of Jersey’s finance industry Supporting the growth of Jersey’s economy

Working together to develop Jersey financial legislation and regulation

Encouraging local talent

Presenting a positive view new clients ofFacilitating Jersey’s finance industry

and business opportunities

Almost 40% of gatekeepers report increased use of Jersey as an IFC in 2017, up from a quarter in 2016; 45% say it has remained the same, about the same as last year.

64%

of gatekeepers attended an event Very effective Fairly effective organised by Not very effective Not at all effective Jersey Finance Don’t know

Supporting the growth

Bringing new entrants of Jersey’s economy

Working together to develop Jersey Don’t Know financial legislation and regulation

Very effective Fairly effective Not very effective

Philanthrop

Othe

Don’t kno

Jersey Finance Annual Review 2017

Publications

Available to Members Jersey Finance’s stable of marketing material continues to grow. Along with past publications, new literature is available to Members in print or to download from www.jerseyfinance.je/publications

Our library of evidence-based research can be found at www.jerseyfinance.je/research and includes: ■ Jersey for Institutional Investing: A Clear Choice ■ ■ Hubbis Thought Leadership – How to Service Chinese Wealth as it Goes Global ■ Driving Forces Behind GCC HNW Investors ■ Jersey’s Value to Britain ■ Jersey’s Value to Europe ■ The Value of the Finance Industry to Jersey

tials The Essen

Jersey:

centre nal finance class ng internatio is its firstd to be a leadi jurisdictions its Jersey is prou it apart from other force, and expert work t sets ework, its (IFC). Wha and legal fram lity. regulatory stabi economic political and

yfinance.je www.jerse

Examples from Jersey Finance library of publications:

2017-2018 Ninth Edition

Careers In Finance

yfinance.je www.jerse

Publications

view 2016 Annual Re

e yfinance.j www.jerse

ment ate Invest UK Real Est IT) RE Trust (UK

Factshe

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Identifiers Legal Entity

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of a JPF

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Private family trusts

in Jersey and to our firm MiFIDII have don’t need to comply ance does and What relev in Europe who aren’t customers with MiFIDII?

trusts Commercial

Special purpose vehicles (SPVs)

s How it work

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Foundation

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Private trust

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Family trust Family trust

Delivering

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al n o i t a n r e t n I iles F s s e n i s u B

Jersey Finance Annual Review 2017

Useful Contacts The Government of Jersey www.gov.je

Jersey Finance Members www.jerseyfinance.je/member-directory

Jersey Financial Services Commission www.jerseyfsc.org

Law Society of Jersey www.jerseylawsociety.je

Jersey Association of Trust Companies www.jatco.org

Jersey Bankersâ&#x20AC;&#x2122; Association www.jerseybankersassociation.com

Jersey Chamber of Commerce www.jerseychamber.com

Jersey Funds Association www.jerseyfunds.org

Jersey Pensions Association www.jerseypensions.org

Chartered Institute of Marketing Jersey Branch www.cimjersey.co.uk

Locate Jersey www.locatejersey.com

Digital Jersey www.digital.je

Jersey Society of Chartered and Certified Accountants www.jscca.org

Jersey International Insurance Association www.jerseyiia.org

Head Office Jersey Finance Limited 4th Floor, Sir Walter Raleigh House 48-50 Esplanade Jersey JE2 3QB Channel Islands T: +44 (0) 1534 836000 E: jersey@jerseyfinance.je www.jerseyfinance.je

@jerseyfinance

linkedin.com/company/jersey-finance

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