The Impact on Jersey Foundations – Abridged Regulations

Currently only the charter of a foundation’s constitution is made public whilst its regulations remain a private document not available for public inspection. The Disclosure Law amends the Foundations Law to require the filing of “abridged regulations” which will be publicly available. This obligation applies to existing foundations and to newly incorporated foundations.

Most importantly, the abridged regulations are not required to contain any information from which a person can or may be identified.

Information within and the format of the Abridged Regulations

The “abridged regulations” must comprise of the information contained in articles 12 and 14 of the Foundations Law.  Article 12 of the Foundations Law relates to a foundation’s council and specifies that regulations must:

  • establish a council to administer the foundation’s assets and to carry out its objects;
  • provide for the appointment, removal and remuneration of council members;
  • set out how decisions are to be made by the council and specify any decisions requiring the approval of another person and the identity of that person;
  • set out the functions of the council, and, if they must or may be delegated or exercised in conjunction with any other person, the extent to which this must or may be done;
  • set out a procedure that ensures that a qualified person (i.e. a person regulated by the Jersey Financial Services Commission) is appointed to be the qualified member of the council (a council must include a qualified person at all times) as soon as reasonably practicable if the qualified member dies, retires or otherwise ceases to act or to be able to act.

Article 14 of the Foundations Law relates to a foundation’s guardian (who must “take such steps as are reasonable in all the circumstances to ensure that the council of the foundation carries out its functions“) and specifies that regulations must provide for the appointment of the foundation’s guardian and provide for the retirement, appointment and remuneration of guardians.

The Jersey Financial Services Commission may publish guidance as to what information should be included or excluded from the abridged regulations.  It is hoped that such guidance will be available at the time the Disclosure Law comes into force.

The format of the abridged regulations is yet to be determined and may consist of a registry form or a redacted version of the regulations.  The Isle of Man already requires the filing of a redrafted version of a foundation’s regulations and so we suspect the same will be true for Jersey.  To avoid the preparation of both regulations and abridged regulations, for new foundations, it may be worth considering that regulations are drafted to avoid private information being disclosed and, for existing foundations, if necessary or desired, it may be possible to amend the regulations so private information is not contained in the regulations.

Why the impact on Foundations?

The change comes about because the Financial Action Task Force (FATF)’s Recommendations require a consistent regime for corporate entities.  It is clear foundations should be treated similarly to companies and that governing documents of such entities are publically available.  However, that does not mean the private information (i.e. names of beneficiaries, council members, guardians) contained in foundations’ regulations is required to be made public; just like the names of company officers and shareholders are not publically available pursuant to articles of association.  Hence the “abridged regulations” seeks to resolve the issue of private information for foundations.

Filing Times and Next Steps for Qualified Members

In line with the relevant filing period for the new annual confirmation statement, which replaces the annual return in 2021, qualified members of foundations should have until the end of February 2021 to file abridged regulations for existing foundations.

However, on 10th November 2020 the Jersey Financial Services Commission announced that the due date for filing the annual confirmation statement in 2021 has been extended to 30 April 2021 to give companies more time to adapt to the new process. Therefore, it would be reasonable to assume the same filing deadline of 30 April 2021 applies to the filing of abridged regulations for existing foundations; albeit this has not been confirmed and best practice would be to file abridged regulations as soon as reasonably possible in 2021.

Therefore, qualified members should consider possible amendments to existing regulations and/or otherwise notify their clients of the requirement to file abridged regulations in due course.

Type

Insight

Locations

Jersey

Share
Twitter LinkedIn Email Save as PDF
More Publications
2 Sep 2021 |

Duties of Trustees

The relationship of trustees to beneficiaries is viewed as fiduciary, meaning there are certain equi...

18 Aug 2021 |

Beneficial Owners and Controllers (BOC)

The aim of BOC is to drill-down to the identification of persons who are the beneficial owners and c...

30 Jul 2021 |

Fighting international fraud

First published in New Law Journal, July 2021. Appleby partners Anthony William and Jared Dann an...

Contributors: Jared Dann, Claire Corkish
27 Jul 2021 |

Fund Finance Update – Will Jersey’s new sustainable investment disclosure requirements aid ESG financing?

This article provides an overview of ESG, the hot topic of 2020 that is carrying on full steam throu...

Contributors: Daniel Healy
22 Jul 2021 |

Listing Variable Funding Notes (VFNs) on The International Stock Exchange

This article provides a summary of Appleby listing agent services in the Channel Islands, and also o...

1 Jul 2021 |

Saunders v Vautier where the beneficial class is not closed - the debate goes on...

The rule in Saunders v Vautier is familiar territory for trust lawyers.  In the modern world it is ...

17 Jun 2021 |

Solvency Statements under Companies (Jersey) Law 1991 - Is it time to go paperless?

In April of this year, the Royal Court of Jersey considered the practicalities around the making of ...

Contributors: Kevin McQuillan
11 Jun 2021 |

“Offshore intelligence – Funds in demand” Appleby Podcast

We have recently produced a podcast focused on the Funds industry entitled “Offshore Intelligence ...

2 Jun 2021 |

Why use Jersey entities in restructurings?

As the extension of various forbearance measures and fiscal support packages continues in response t...

Contributors: Gemma Whale, Andrew Weaver
28 May 2021 |

Further updates to the JFSC’s AML Handbook

On 31 May 2021, the handbook for the prevention and detection of money laundering and the financing ...

Contributors: Gemma Whale