Head of Funds, Ryan Taylor, took part in a Jersey roundtable to discuss the above topic which is featured in the October 2021 edition of Funds Europe.
The roundtable explores what has kept Jersey in vogue and what must be done to maintain its status as a leading financial hub.
Ryan's comments:
In uncertain times, managers and investors look for security and stability in their fund domicile. Do you think this has made Jersey more attractive?
Absolutely, we’ve certainly seen a few hiccups from some of our competitor jurisdictions, particularly if we look slightly further afield than the European market. In the Caribbean, we’ve seen the grey listings that have taken place for the likes of the Cayman Islands, and this really harps back to the high quality of Jersey’s regulatory regime. We never seem to really find ourselves in much danger in that regard, but for all the right reasons, we come out as the gold standard when we have our wider regulatory visits from the likes of Moneyval, etc.
This has helped in an unstable time globally, to know that we’ve got that level of certainty around Jersey as a fund jurisdiction.
Jersey maintains its favourable reputation in these markets. What we’re also seeing is that many of our competitive jurisdictions are having issues here and there, for example from a resource perspective and struggling to get the right people to do the work when the work comes in.
We have a much more stable infrastructure on the whole here in Jersey, as not only do we have quality administration, but we have expert auditors, lawyers, accountants, and everybody works together. There is a very collegiate feel to Jersey’s funds industry and the wider finance industry.
Funds Europe – Jersey Finance launched its sustainable finance strategy in March. How is Jersey’s financial sector transitioning to a more sustainable future and how is helping fund managers to comply with the EU’s Sustainable Finance Disclosure Regulation (SFDR)?
If you look at some of the recent JPF statistics, DSPs make up 72% of the directors on boards, and 40% of those directors were also class-G regulated. This demonstrates we can add value from a governance perspective using our expertise. We can also ensure that the message from an ESG [environmental, social and governance] perspective, and SFDR, the aims and goals of what the regulation’s all about, are really being executed properly with substance and it’s not just lip service.
However, the industry needs to be careful that it is not allowing the new regulations to become a way of masking greenwashing. There’s always a risk with regulation, when it tries to prevent something, that people do the bare minimum to comply as opposed to what the real aim of the regulation is for. We can really add some value in this space, and I know there are already some providers that are looking at services in relation to areas like SFDR.
Funds Europe – The government last year approved a new amendment to legislation that will make it easier for fund managers to migrate limited partnership fund structures, which are frequently used for alternative fund structuring. What impact do you think that has had so far? And what’s next in terms of new legislation in Jersey?
This is a useful marketing tool for Jersey. Legislation is generally done for two reasons: to make us more robust and, secondly, to create opportunity in the market. The more we can do with our legislation, the better we’ll see Jersey’s funds industry develop.
Funds Europe – How is Brexit impacting Jersey as a fund domicile since the UK left the EU? Do you think that Jersey is in an advantageous position to benefit from Brexit?
It comes back to the fact that there was uncertainty when Brexit was happening. We tried as a jurisdiction to identify what this might be, but we are still watching this play out. It will be some time before we can look back on it and really see what the impact has been. I haven’t heard of Singapore-on-Thames before, but I quite like that! It’s currently too premature to see the true impact Brexit’s had for Jersey from the funds industry’s perspective.
Funds Europe – Competition is growing as other fund domiciles attempt to attract more flows from alternative fund managers, for example. Jersey has already made changes to make its domicile more attractive, but how has the domicile fared in recent months? Looking forward, what else does it need to do to maintain its allure?
The collegiate approach that we need to continue as an industry, as a sub-sector of the finance industry, as administrators, pushing in the right direction as a group, continuing to work with our industry bodies – JFL, JFA – working closely with the fellow advisers. We should also take a step back and look at the last 18 months and realise that Jersey’s done extremely well, all things considered, and its reputation has held true. What we need to do now is to push forward, making sure that we’re developing the future of the industry for the next generation and hopefully many generations to come. A rising tide floats all boats, and if we can push Jersey in the right direction, we all stand to benefit.
Read the full roundtable article here.
Contact:
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Ryan Taylor
HEAD OF FUNDS, JERSEY
