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, 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
Qualified members of foundations should have until the end of February 2021 to file abridged regulations for existing foundations. This would be in line with the relevant filing period for the new annual confirmation statement which replaces the annual return in 2021.
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.
Private Client & Trusts, Trust Disputes, Wealth Structuring, Regulatory Advice
Trusts: Comparison between the Crown Dependencies
Our Private Client and Trusts specialists in Guernsey, Isle of Man and Jersey outline some of the ke...
Changes to the Jersey Competition Law Framework
Following the launch of the Government of Jersey's consultation on proposed changes to the competiti...
Jersey Property Unit Trusts and the Trust Regulation Service
Our Appleby team looks at HMRC's recently updated guidance on Jersey Property Unit Trusts (JPUTs) an...
Enforcement of security under the Security Interests (Jersey) Law 2012
Find out more about why the Security Interests (Jersey) Law 2012 (2012 Law) makes Jersey popular as ...
Listing High Yield Bonds on the International Stock Exchange (TISE)
High Yield Bond issuers and their advisers continue to favour listing on The International Stock Exc...
Fund Finance Laws and Regulations 2023 - Jersey
Fund finance is growing in Jersey. As an international financial centre (IFC) of choice for global i...
The Edinburgh Reforms: An Offshore Perspective
On 9 December 2022, the UK Chancellor of the Exchequer announced a package of reforms to the UK fina...
While the basic features of the trust remain, there are some notable differences in how trusts can b...
Register of Overseas Entities: A Jersey perspective
The Register of Overseas Entities at Companies House (ROE), as contemplated by the Economic Crime (T...
Digital Identification in Jersey
There have been considerable changes made to the way we do business in recent times. These changes w...