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Jersey widens AML/CFT scope

by Silvia Saccardi 3 May 2023

Jersey has widened the scope of its AML/CFT regime to include private funds.

There is no material change for Jersey public funds (entities offered to more than 50 LPs), or any Jersey managers/GPs of those funds that were previously obligated to comply with the regime.

Private fund entities, which now find themselves in scope, will need to register with the Jersey Financial Services Commission through an online portal via their designated service provider (DSP).

Robert Milner, partner at Carey Olsen, commented on what this means in practice: “The DSP will now in most cases have to wear an extra hat – the AML service provider. While there is an extra requirement to register, most of the AML work needed will already have been done as it is an existing administrative obligation.”

The change in scope also affects Jersey entities acting as a trustee. Milner added: “This change is particularly relevant to family offices that hold their structures through trusts and do not currently have a local administrator appointed. This will be a tiny fraction as the vast majority of Jersey entities have an administrator appointed.”

Entities now in scope of the regime include:

  • Jersey private fund structures and their functionaries (such as trustee, general partner manager or investment adviser)
  • SPV trustees
  • SPV general partners to structures with third-party investors
  • Managers and investment advisers to structures with third-party investors
  • Certain securities issuance vehicles
  • Vehicles lending to third parties.

Potential in-scope activities that could affect GPs include lending, portfolio management, funds and fund services, investing, administering or managing funds or money, among others.

The regime requires the adoption of AML/CFT policies and procedures, the appointment of a money laundering reporting officer and money laundering compliance officer, and the performance of customer due diligence measures.

The purpose of the update is to align more closely with Financial Taskforce Recommendations.

Firms that are no longer exempt from the regime have until 30 June 2023 to comply with the new requirements. New entities will be obliged to comply from the offset.

The AML/CFT handbook was previously updated in June 2022, creating a new offence of failure to prevent money laundering.

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