Jersey Financial Services Commission Annual Report 2023

Contents

Highlights at a glance  1

Highlights at a glance Harnessing technology

Facilitating business integrity

7 core processes External security

operations centre built and deployed  introduced

130 examinations  40 whistleblowing  conducted calls received

Industry survey conducted on the adoption and use of digital identity solutions

10 public  sanctions issued

More than 1,000

intelligence reports  

disseminated Developing our people, systems and capabilities

9% of our colleagues  3,159 Schedule 2  74 drop-in sessions  Employee turnover  are returners, rising to

business registrations  held for those affected  rate reduced to 14%,  15% in our Supervision processed by changing regulation half that of mid-2022  and Enforcement teams

50 JFSC team members  £218,596 spent supported the MONEYVAL on learning and onsite visit development

Forewords

Chair s  

statement  LsGtoornovgen-rgtnewmrmoernkrtei,ngignu drlaeutlsaottrriyoy n easffnhedicpotibtvheeetnwrekeseesynr aetgqheeuniJrcFeiSse Csa.,

The global environment in 2023 remained  Vision and top

ctghhreoa wlcleoinnsggt- iionmfg-pl, iawvciintt gho fhccrigilsihmisi,anttfliegahctithoamnn oagnneedat iannrdtyeirpneocsrltiecrayas, tetehdse ,  strategic priority geopolitical tensions.  We're a values-led organisation, committed

to being a force for good for Jersey, including The global direction of travel continued toward  protecting people from financial crime.

greater regulation and transparency, increasing

the size of our regulatory perimeter, and bringing  Our sustained focus on combatting financial

a range of individuals and organisations into scope  crime continued throughout 2023 and

for the first time. The importance of meeting  was central to our MONEYVAL evaluation

international standards is clear, and Jersey's recent  preparation. Long-term regulatory effectiveness

MONEYVAL evaluation was a good example of  requires a strong working relationship between

our approach to regulatory transparency and  the JFSC, Government, industry and other

effectiveness.  key agencies. The MONEYVAL evaluation Monique O Keefe demonstrated the value of this joint effort. It

Environmental, social and governance (ESG)  was excellent to see the levels of collaboration Deputy Chair (Interim Chair,  considerations only grew in importance and are  throughout the process.

31 October 2023 to 18 April 2024) increasingly driving stakeholder expectations. This

is an area of focus for the JFSC, both as a regulator  Our focus on preventing financial crime

and in terms of how we operate as an organisation.  preceded the MONEYVAL evaluation and

will extend beyond it. We have long had a programme of work focussed on combatting financial crime, firmly embedded in both our strategy and operational delivery.

Delivering our strategy

2023 saw progress under our three strategic anchors:

• facilitating business integrity

• harnessing technology and influencing the digitalisation of financial services

• developing our people, systems and capability to be a high performing organisation

MONEYVAL was a clear priority and we allocated significant resources towards it, but we also

made progress in other strategic areas, including improvements to our internal and external digital systems, continued industry engagement on RegTech, and development of our risk model.

Our people strategy is fundamental to regulatory effectiveness. 2023 saw us continue our work

to provide a leading employment experience

in Jersey. This focus on people and culture saw a reduction in our employee turnover rate, an area industry had expressed concern about

in our previous industry survey.

The year ahead We continue our focus on We have an ambitious plan for 2024, as we look to  stakeholder engagement continue to execute our current strategy, including: to ensure strong alignment

• rtehseproengduilnagtotroy tchheaMngOeNs E inYt Vro Ad Lu rc ee pd o i rn t  a2 n0 d2 3 e  mto b c eo dm dib nagt  with Government,  

financial crime industry and our team.

• completing an independent fee review with industry, so

we can understand where the pain points are and ensure

our competitiveness as an international finance centre

• balancing our focus on financial crime with our focus on conduct and prudential matters, including expanding our responsibilities to consumer lending and aligning our regulatory framework and banking supervision with the appropriate components of Basel III

• continuing our focus on stakeholder engagement to ensure strong alignment between Government, industry and our team

• international horizon scanning to meet the changing demands of global regulation

• continuing to focus on our own digital transformation and supporting industry in their adoption of regulatory technology solutions

• advancing our ESG agenda

Leadership changes at the JFSC

Mark Hoban retired as Chair of the Board in October 2023. We thank Mark for his leadership. His influence and impact were extremely valuable to the organisation and built upon his previous role as a Commissioner. Particularly notable was Mark's setting of the strategy to future-proof the JFSC, his stewardship through the MONEYVAL evaluation and commitment to the highest corporate governance standards.

We are delighted to announce that Jane Platt CBE has accepted the appointment as the new Chair. Jane brings extensive experience operating in large and complex businesses with a successful track record across financial services, including retail and institutional investment management, stockbroking, and banking. We are all looking forward to welcoming her to the JFSC and to Jersey. We are also pleased to welcome experienced Chief Financial Officer Helene Narcy as a new Commissioner.

Our work at the JFSC continued to contribute to Jersey s reputation as

a well-regulated international finance centre, meeting international standards.

2023 regulatory  Facilitating  Director  developments to  business integrity

combat financial crime Alongside our work as part of the multi-agency General s  2fr0a2m3eswaowrk a. Tsihgen irfiactea notf ecvhoalnugtieo nh aosf oaturt i rmeegsu latory  gwInreo2uc0op2n 3"tciwnoumeesbdeattt otuinpegvaofislvneeap noacuraira trle ics, rkdi-mebdeai scteaodtge eadtp hRpeirsro"k,a ch.

statement  bnbewveeuaowesslinvntl ieoecng shgesiansrellselaseugtnariuoegnln aidJnteagiinronsdgndei.i vyvthie disenumrtaehlesseeotctouionramcgbepissnlo etrrexebriqt nnyuaeiotrwiefo dtnohafrerlom  tGpoWeuueaertdmtmSrinyulagcepihndoe t -nrbavayitinshdoeiioeusdn mriamneonexpnewaosxmrtCttreaianhnntaiietsotfiainvoRrenoei fseap knt. rh WgoOegaefgrffi aoae cmclmesumores Cneewt hv eori'lrsve ed

in response to national risk assessments.

The primary motive driving these developments

standards in the fight against financial crime.  programme with industry, with targeted

The global political and economic environment  Alongside being extremely damaging in  campaigns to reach individuals and

itself, financial crime also facilitates other  organisations in regulatory scope for the

made its impact felt here in Jersey in 2023, with  serious crimes, including terrorism and human  first time, including non-profit organisations, Jersey's cost-of-living crisis outpacing the UK's.  trafficking. It's our responsibility as members  individual sole trader directors, virtual asset

The JFSC, like our stakeholders, is impacted by  of the international community to play our part  service providers and other designated

tbhuessinee issssuine so ua rn dcu t rhree nintcernevaisroe nd m coemntp.lexity of doing  in preventing it. Effectiveness in combatting  non-financial businesses and professions.

financial crime is also essential to maintaining

From a transaction perspective we saw a dip in  our reputation as a well-regulated international  Harnessing

finance centre.

nbuumt tbheerssi tbuoatthioonnwthaes Rveergyi smtruycahnsdercetgoru-ldaetopreyn sdiednet, ,  technology and

wcoitmhpbaarnekd dweiptho sthites panredvoiovuesr aylel afur.nd values up in 2023,  Itnh eth Neastaiomnea lvReiisnk, 2A0s2s3e saslmsoesnat wfotrhLeedgealli vPeerrys oofn s  influencing the

aFnindanAcrrinagn gaenmd eMnotsn, e ayn Ld a uupnddaet reins g t o N t ah te io Tne ar lr Ro ir sis kt   digitalisation of

TsJFehSrevCcichceaosln lietninndguueesstdr wyto er ecremonsatiigrninbeiudfit creeatsnoitl ,iJebenurtst.e OJyeu'rsrs reweypo'sru ktfi aanttai otnnhceiaasl  AAsllsoecsastimngenstisg,n aifill c oafn wt hreicsho uorucret etoa mth he eMlpOeNd E s Yh Va ApeL.  financial services

a well-regulated international finance centre, meeting

evaluation was our top strategic priority while

international standards. Digital transformation is a core anchor of our also keeping both operational tasks and change  strategy. In 2023 we continued our focus on

projects moving forward. This was not without its  regulatory technology (RegTech) and digital

challenges, but a great deal was achieved in 2023  identification, working closely with other agencies Jill Britton and I'd like to personally thank my colleagues,  including Government, Jersey Finance, Digital

Director General  Government and everyone who contributed to  Jersey and industry to understand how Jersey can the MONEYVAL evaluation process, our strategic  best use this technology. We also made a range

delivery, and our core operational activities.  of improvements to the myJFSC portal.

The year ahead

The MONEYVAL evaluation outcome is clearly a significant consideration for the JFSC in 2024. Operationally we are prepared, and our team will respond with flexibility and purpose to the outcome.

The regulatory landscape is always developing. We will continue to track emerging developments and standards, including in artificial intelligence and digital assets, and will respond in a manner relevant to Jersey. We will also continue our work in combatting financial crime and embedding the significant regulatory changes we've seen over the past two years.

We will continue to support Government in their work to regulate consumer lending, alongside bringing our regulatory framework and the supervision

of banks in line with the appropriate components of the Basel III standards. Sustainable finance is firmly on the agenda, and we will respond to the future Government roadmap appropriately with a multi-year plan.

Enhancement to our own technology and digital interface with industry and other stakeholders remains a key priority. We will continue to provide guidance to industry on the adoption of technology solutions which support ongoing compliance with regulatory requirements. The security of our own systems is of course a key priority and, following the Registry vulnerability issue identified in January 2024, we will be working to ensure we understand how the vulnerability came about, and taking forward any recommendations arising from a third party review.

The foundations are now firmly

in place to further develop  Wfeee dwbiallc akl saon bd e r eccoonmclmude inndga at nio in ns d aes p  ew ne d beanl ta fnecee r t ehve ie nwe e wd it f ho ir n c do un st ti rn yu , o wu es l  coming organisational capability in 2024. itimto's pbereoscvseoemmntepianeltt wittoiev eshu ainpv peo ousrrut fftefihecesi ensnettre urdecsst uooruferin.cTdeosu seatnnrsdyuacrneadpreatgbhieuli ltJaiFetSosrCtyo, ew dfieftehlicv ttehirve ebnnoeetehs d so, ur

strategy and our core, business-as-usual functions.

Develop our people, systems and capability  Thank you

to be a high performing organisation I'm incredibly proud of the JFSC team and how we've worked together during the

MONEYVAL evaluation, while also keeping the JFSC moving forwards so we can We recognise that regulatory effectiveness begins with our people. Developments to our people  support Jersey beyond it. I also appreciate the collaborative approach we saw strategy continued at pace in 2023.  between the JFSC, industry, Government and all other stakeholders across 2023.

Thanks to the significant investment we've made in cultural change, including a modernised  We know this has been a significant year of regulatory change for organisations approach to recognition, values, performance management and professional development, we have  that are also grappling with challenges around resourcing and the cost of doing improved our recruitment and retention rates. The foundations are now firmly in place to further  business. We welcome constructive challenge, and I know that we are all aligned develop organisational capability in 2024. on the ultimate goal, which is the long-term success of Jersey.

This enhancement of our employee value proposition has been substantial and will have a direct  I'd also like to thank the outgoing Chair Mark Hoban for his excellent

impact on our industry stakeholders, improving your experience of working with us.  stewardship and guidance, especially in the build-up to the MONEYVAL onsite

evaluation, and for all he has contributed to the JFSC, both as Chair and as Commissioner. We look forward to welcoming our new Chair in 2024.

Performance report

Introduction Our vision is to be a high-

performing regulator, building for the long-term success of Jersey. This includes setting ambitious objectives and measuring our performance against them. Strategic delivery is critical.

Our performance report rounds up our significant activity for the year, and the actions we re taking to realise our vision.

Our performance report contains:

• a summary of the purpose and activities  • our human rights, anti-corruption of the JFSC and anti-bribery statement

• a recap of our strategy • information about our approach

• an overview of our key performance metrics  to environmental, social and governance (ESG) matters

• an overview of our activity by division

• a summary of finance and resources

• a description of the risks faced by the JFSC and

of the people and organisations we supervise

Annual report 2023 17 www.jerseyfsc.org Annual report 2023 18 www.jerseyfsc.org

Purpose and activities of the JFSC

We are the regulator for financial services in Jersey, responsible for regulating, developing and  supervising the island's financial services industry. We aim to deliver balanced, progressive, risk-based  financial regulation, built on insight, integrity and expertise. We also operate the Companies Registry,  which registers Jersey companies, partnerships, foundations and business names.

Our mission is to maintain Jersey's position  We aim to fulfil these responsibilities by:

as a leading international finance centre,  

with high regulatory standards, and to adhere  • ensuring that all authorised financial  

to our guiding principles which are set out in law: services businesses and individuals meet  

the appropriate criteria and that we, as the  

• reducing risk to the public of financial loss  regulator, meet appropriate international  due to dishonesty, incompetence, malpractice,  standards relevant to the sectors we supervise or the financial unsoundness of financial  

• playing our role in combatting financial crime  

service providers

as part of the wider international effort

• protecting and enhancing the reputation  

• working closely with fellow regulators and  

and integrity of Jersey in commercial  

lawmakers to ensure access to efficient and  and financial matters

effective markets for financial services

• safeguarding the best economic interests  

• reacting to and, where appropriate, anticipating  

of Jersey

changes in markets and the financial services  

• countering financial crime both in Jersey  industry by developing policy and the way  and elsewhere we supervise

• acting as an agile, thoughtful, proportionate  regulator that gives fair consideration to both  

Our statutory responsibilities are set out  

the costs and benefits of regulation

in the Financial Services Commission  

(Jersey) Law 1998 and include:

• authorising, supervising, overseeing,  

and developing financial services in  

or from within Jersey We aim to deliver  

• dthisecChaormgminigs soiuonr fLuanwctions under  balanced, progressive,  

• raenpdoirntfinogrm, aindgv itshinegG, aosvseirsntminegn, t  risk-based financial  

of Jersey and other public bodies regulation, built on insight,  ••psoeprerevpriaactreiinnsggletaghniesdlCaretoicomonpmamnieens dRinegg ifistnrayncial  integrity and expertise.

Areas we regulate  

We regulate and supervise the following for both anti-money laundering,  We regulate and supervise the following for AML/CFT/CPF purposes: countering the financing of terrorism and countering proliferation financing

(AML/CFT/CPF) purposes, and for conduct and prudential purposes:

Banking Collective  Fund services  Insurance  Financial  Non-profit  Virtual asset  Designated investment funds business business institutions  organisations* service providers* non-financial

businesses and professions

General insurance  Investment  Money service  Trust and company  

mediation business business businesses service providers

*New for 2023

Annual report 2023 21 www.jerseyfsc.org Annual report 2023 22 www.jerseyfsc.org

Vision

To be a high-performing regulator, building for the long-term success of Jersey.

Top strategic priority

Achieving sustainable, long-term excellence in regulatory effectiveness, and increased capability for the island in combatting financial crime.

Strategic anchors

Three strategic anchors provide the lens through which we make our decisions:

Facilitate business integrity

Our strategy

Harness technology and influence the digitalisation of financial services Develop our people, systems, and capability to be a high performing organisation

Our current strategic framework  was launched in 2021.  

The framework ensures we are:

• delivering our vision

• performing well against our guiding principles within a changing international landscape

• supporting Jersey as a competitive, successful and well-regulated international finance centre

In 2023 we undertook significant activity to drive our strategy forwards. Our top strategic priority  

is regulatory effectiveness and combatting financial crime. Three strategic anchors provide the lens  through which we make our decisions.  

Core workstream activity

Strategic anchors:

Facilitate business integrity

Core workstream Combatting financial crime together

Key 2023 activity

• MONEYVAL onsite preparation and mutual evaluation

• supervision of new regimes

Harness technology and influence the digitalisation of financial services

Core workstream Digital transformation

Key 2023 activity

• digitising/enhancing the following forms:

- material change application

- limited liability company

- Supervisory Bodies Law application

- fund service business application

• introducing entity self-management of roles on the myJFSC portal

• increased engagement with industry

Develop our people, systems, and capability to be a high performing organisation

Core workstream People and culture

Key 2024 actions

• phased iteration of new features in our HR system

• updates to reward and recognition

• enhancement to our approach to performance management

In 2023 we undertook significant activity to drive  our strategy forwards.

Preparation for Jersey's MONEYVAL evaluation  While we applied substantial focus and remained a core focus area, with substantial  resources to the MONEYVAL evaluation and work throughout 2023 both in the build-up to  to building Jersey's financial crime prevention the onsite review in September and beyond it,  capability across 2023, we also made progress as we received written key findings, and the first  in other key strategic areas.

draft of MONEYVAL's report for review.

Through our digital transformation core

To enable Jersey to continue to meet  workstream we delivered a range of international standards in combatting financial  improvements to the myJFSC portal,

crime, our Policy team led on the revision and  simplifying and enhancing key

creation of a substantial amount of policy and  customer-facing digital solutions.

guidance to remove the scope exemptions for

anti-money laundering, countering the financing  Our people strategy also continued to develop of terrorism and countering proliferation  at pace, with modernised approaches to financing (AML/CFT/CPF). Following these  recruitment, performance management, changes, our Central Authorisations Unit  reward and recognition, and culture. We have experienced a significant uplift in applications  successfully grown our headcount, reduced in 2023 compared with 2022.  time to hire and reduced our turnover rate.

2023 also saw the delivery of the National  Further information on strategic delivery can be Risk Assessment for Legal Persons and  found in the following sections of this report: Arrangements, and updates to the Terrorist

Financing and Money Laundering National Risk  • Combatting financial crime together – page 25 Assessments. The JFSC provided significant  • Digital transformation – page 63

support in the completion of these assessments.

• People and culture – page 67

While we applied significant focus and resources to the MONEYVAL evaluation and to building Jersey s financial crime prevention capability across 2023, we also made progress in other key strategic areas.

November 2022 March 2023 July 2023 October 2023 January 2024

Country training  MONEYVAL confirmed  First draft of technical  August 2023 Jersey received written  Second draft   May 2024 delivered by  onsite dates and  compliance annex  Final version   key findings in terms  of mutual evaluation  Mutual evaluation report

MONEYVAL Secretariat assessors delivered to Jersey of scoping note of effectiveness report sent to Jersey discussion at plenary

March 2023 April 2023 July 2023 September -  December 2023 March 2024 July 2024 Technical  Effectiveness  Draft scoping note  October 2023 First draft of mutual  Face to face  Mutual evaluation

questionnaire  questionnaire  provided, highlighting  Onsite visit evaluation report sent  meetings to discuss  report published

submission submission the areas of focus to Jersey second draft

Combatting financial  crime together  

MONEYVAL is the official denomination of the   Committee of Experts on the Evaluation of Anti-Money  Laundering Measures and the Financing of Terrorism.  It is a permanent body of the Council of Europe.  

MONEYVAL evaluates how well member countries  Jersey's MONEYVAL evaluation was therefore a core focus  comply with the Financial Action Task Force (FATF)  in 2023, with substantial work both in the build-up to the  Recommendations on combatting money laundering,  onsite visit in September and beyond it, as we moved into the  the financing of terrorism and proliferation. MONEYVAL  receipt of the draft report and review stages of the process.  assesses the effectiveness of countries' implementation  

of the standards, making recommendations for  Our preparations for the mutual evaluation involved all  improvement in a country's systems.  divisions of the JFSC and saw developments at a strategic  

and operational level. Not only was the JFSC a significant  Assessors from MONEYVAL conducted an onsite mutual  contributor to Immediate Outcome 3 (Supervision) but  evaluation visit of Jersey in September 2023. Mutual  we were also a key contributor to Immediate Outcomes  evaluations are in-depth country reports analysing the  1 (Risk, Policy and Coordination), 2 (International  implementation and effectiveness of measures to combat  cooperation), 4 (Preventive measures), 5 (Legal persons  money laundering, terrorist and proliferation financing. The  and arrangements), 9 (Terrorist financing investigation  reports are peer reviews, where members from different  and prosecution), 10 (Terrorist financing preventive  countries assess another country. Ahead of the onsite visit, a  measures and financial sanctions) and 11 (Proliferation  significant amount of data was collated and submitted to the  financial sanctions). We continued to deliver a substantial  assessors, which all formed part of the mutual evaluation. industry engagement programme, including outreach to  

individuals and organisations affected by new or evolving  The outcome of a MONEYVAL evaluation has significant  regulatory regimes, alongside ongoing development  implications for a jurisdiction's international reputation and  of our policies and guidance to ensure alignment with  market access. The importance of the evaluation is reflected  international standards.

in our strategic framework, with our top strategic priority  

defined as "achieving sustainable, long-term excellence in  

regulatory effectiveness and increased capability for the  

island in combatting financial crime."

Financial Crime   National risk assessments Coordination division Identifying and effectively responding to risks relating

to money laundering, terrorist financing and proliferation While there is a clear link to the MONEYVAL evaluation, our  financing are ongoing priorities in Jersey's work to prevent

commitment to combatting financial crime predates and extends  financial crime. At a national level these risks are managed beyond the mutual evaluation process. We've embedded the  through the completion of national risk assessments. prevention and detection of financial crime into our processes for

the long-term, with a view to continually improving those processes  The JFSC played a crucial role in producing these national for ongoing effectiveness in meeting international standards.  risk assessments by providing data analytics and insights, The establishment of a dedicated Financial Crime Coordination  sectoral and subject matter expertise, outreach and

(FCC) division underscores our commitment to this.  education. We did this not only to deepen understanding of

financial crime risks nationally, but also to set expectations During 2023 the FCC division was tasked with ensuring that  and provide support for industry in responding to them.

we were prepared for MONEYVAL's mutual evaluation of Jersey.

This included: In 2023, we contributed to the delivery of one new and two

• support and guidance to JFSC team members  updated national risk assessments. This work included:

in the preparation of critical documents, including

reviewing the technical compliance and effectiveness  • the updated Terrorist Financing National Risk Assessment questionnaire submissions (May 2023)

• providing regular updates and training to JFSC colleagues  • the new Legal Persons and Arrangements National Risk Assessment (July 2023)

• delivering mock interviews to colleagues who were meeting

with the assessment team • the updated Money Laundering National Risk Assessment

(September 2023)

• participating in regular meetings with partner agencies

and competent authorities

We also continued work on the Virtual Asset Service

• coordinating all actions throughout the process to ensure  Providers National Risk Assessment, due to conclude they became embedded in the JFSC's processes in early 2024.

The FCC division also provided extensive input during the onsite itself, including:

• coordinating with partner agencies

• serving as the main point of contact for partner agencies  While there is a clear link to

icnr ismuep ptoogrte othfetrh"e national framework "combatting financial  the MONEYVAL evaluation, our

• pinrvoovlivdeindgin s uthpep oorntsaitnedegxaumidiannacteiotno JFSC colleagues  commitment to combatting

• cinotoerrdviienwatsinwgi tJhF SthCe c aoslsleeasgs umeesn' ta  nteda imndustry participants'  financial crime predates and

• providing regular updates to JFSC colleagues extends beyond the mutual

• creoqourdeisntas t binyg t hane da sres se pssomnde innt g t te oa am dditional information  evaluation process.

50 members of the JFSC team participated in the MONEYVAL

evaluation. The FCC team's work meant that we successfully

delivered on all deadlines relating to the mutual evaluation.

Performance analysis

In our 2023 business plan we published a new set

of external key performance indicators. These key performance indicators support our strategic delivery and also help us to demonstrate the changes we're making in response to stakeholder feedback, following our inaugural industry survey.

As the chart on the next page shows there has been a good level of progress across our key performance indicators, but there is clearly more to do.

Notable is the increase in external engagement activity, both locally and internationally. The MONEYVAL evaluation has afforded opportunities to strengthen relationships with

key international stakeholders, which has been useful in building Jersey's reputation in regulatory effectiveness.

Internally, the operational performance initiatives have progressed through process improvement driven by automation, simplification and digitisation. During 2023 we established a new Operational Excellence team who are supporting a continuous improvement cycle, with particular emphasis on external user experience through our portals.

Both our external and internal survey results remain broadly unchanged, with some indicators marginally down year-on-year. There are areas to celebrate across both surveys, but also areas to focus on where less progress has been made. These point in time assessments help

us ensure that the voices of our critical stakeholders - colleagues and industry - are well represented when it comes to shaping the business plan for the year ahead.

Finally, the average tenure of colleagues is now 4.5 years. Importantly, turnover has reduced significantly and is now in line with market norms. More information can be found in the people and culture section of this report.

These key initiatives will remain areas of focus as we implement our strategy, and our measures will evolve in 2024 to ensure that we are assessing the indicators that matter most to us and our stakeholders.

Table key

Harness technology and influence  Develop our people, systems and capability Strategic key performance indicators Facilitate business integrity

the digitalisation of financial services to be a high performing organisation

KPI Description Measure Target 2022 results (if applicable) 2023 results

iii. JFSC acting in the best interest of Jersey

264 MyProfile applications processed

in 2023 - 88% within SLA.

Service level agreements 1,056 MyProfile applications  As at 31 December 2023, 97.08%

processed in 2022 – 86% within SLA

(SLAs) Monitor, measure and reduce  % adherence to published SLAs  of annual confirmations returned. Adherence and improvement  current industry SLAs.  with year-on-year improvement  90% As at 31 December 2022, 88.5% of

of user experience SLA  and reduction in processing times. annual confirmations returned Baseline has now been set. In 2024 with industry we will focus on measuring key

external processes and adherence to published SLAs.

Digital processes

Online streamlined interactions

Increase in end-to-end digital  Exceeded target. Seven core One new-end- to-end  One new end-to-end process  Six core processes built and

interaction processes with end  processes built and deployed process per quarter.  per quarter deployed by end of 2022

users. by end of 2023.

Annual staff happiness  Year-on-year improvement

Staff engagement Year-on-year improvement  Average score 7.5 Average score 7.3

index survey. in annual happiness index.

52%

Increase in proportion of internal  Average tenure was impacted by Increase in staff  % year-on-year increase in

Staff retention staff with a greater than 2-year  55% a 15% increase in our permanent

retention. average tenure of JFSC staff.

tenure period from 50% to 75% headcount across 2023. Our attrition rate has halved since mid-2022 and

was 14% at the end of 2023.

Supervision

The Supervision division s primary function is overseeing financial businesses and assessing how effectively they are meeting relevant legal obligations and regulatory requirements.

We operate a risk-based approach to our supervisory activities, focussing our resources and activities on businesses that we calculate as posing higher regulatory risk to Jersey's reputation as an international finance centre. We test the compliance status of all businesses in line with our risk model.

Challenging economic and market conditions continued into 2023, which had an impact on Jersey businesses. These challenges included ongoing cost pressures as inflation persisted, rising interest rates, liquidity pressures in the banking market and, internationally, some banking failures. Despite this backdrop, Jersey continued to attract business. Application levels for collective investment funds increased in 2023 compared with 2022, and banking deposits and the overall value of funds increased in line with trends.

Despite challenging economic and market conditions, Jersey continued to attract business.

In 2023 we completed 3,159  

TinhFeenberwuaEryx.eDcauvtiivde l eDdirtehcetodri voifs iSounp'se or nvigs oioinn g, DparveipdaEraatciootnts, tfooor kthuepMhiOsNpEoYstV  AL  Schedule 2 business registrations evaluation and its delivery of other business objectives.  compared with 27 in 2022, following KEenyh a2n0c2i3n ga cotuivri tayp ipnrcoluadcehd t: o assessing business integrity by including   the removal of AML/CFT exemptions.

sector and firm-specific onsite examinations in line with our risk model.

These onsite examinations complemented our financial crime and

cross-sector examinations.

Completing 3,159 Schedule 2 business registrations compared with 27

in 2022, following the removal of AML/CFT exemptions. Excluding Schedule

2 business registrations, the number of applications across the regulatory perimeter in 2023 remained level with 2022, at 486 and 483 respectively.

It was a year of two halves however, with H1 activity materially below trend but H2 activity very much back on trend.

Issuing 865 letters of no objection to individuals seeking to act as key and principal persons in 2023, compared with 1,049 in 2022. On average these letters of no objection took 29 working days to complete, within our service level agreement of 30 working days.

Processing a significantly higher volume of outsourcing notifications, with our team receiving 221 notifications in 2023, compared with 120 in 2022.

Digitising key supervisory processes and forms to increase efficiency and convenience for the user – for more information, see the technology and data section of this report.

Publishing five feedback statements from our 2022 examinations covering:

- financial crime

- the role of the money laundering compliance officer

- sanctions and screening systems

- beneficial ownership and control

- non-profit organisation significant donors

We intend to publish four feedback documents in H1 2024 relating to our 2023 examinations, which will cover:

- natural persons undertaking Class G trust company business

- reliance on obliged persons

- countering the financing of terrorism and proliferation financing

- independent financial advisers' investment advice to vulnerable persons

Continued activity in our Heightened Risk Response team, which was established in 2021 to deliver effective risk-based supervision of firms where serious deficiencies and/or regulatory concerns have been identified. During 2023, we engaged with 16 firms across various industry sectors. Our activity remained focused on intensified oversight of firms' remediation measures following examinations or third-party reviews.

Industry engagement

Our team undertook a significant amount of in-person  

engagement across the year, both with industry and other  

regulators. We played an active role in the cross-agency  

initiative "combatting financial crime together", including  2023 examination activity attending various conferences and meetings.

An important area of focus was supporting those  During 2023, we conducted a range

individuals and organisations brought into the regulatory  of supervisory examinations based on pdeersiimgneateter dfo nrotnh-efifinarsntctiiaml eb.uOsiunre ds esedsic aantedd p treoafems ssiuopnpso, nrtoinng-  conclusions in the national risk assessments

profit organisations and virtual asset service providers,  and sectoral risks as determined by the

spoke at several industry events across the year, held  JFSC's risk model (see the risk, legal and dJerrospe-yinFsineasnsicoen smfeomr bnoenrs- parfofefict toerdg abnyi scahtaion ng sin, gmreetg wu il taht ory  data protection section of this report for

regimes and attended regular meetings with the following  more information). In addition to our financial industry bodies: crime and firm-specific examinations, we

• Jersey Society of Chartered and Certified Accountants also reviewed:

• Jersey Law Society • the fund sector's controls over Jersey private funds. This was a follow-up review to establish whether businesses

• Jersey Estate Agents Association

were improving their control procedures to support the

• Jersey Gambling Commissioner  growth of the product, in line with feedback from the 2021 review

• Jersey Charities Commissioner

• the adequacy of training provided to key staff in the trust

Our other teams continued their engagement with the  and corporate services business sector to mitigate risks financial services industry, attending key conferences  associated with their business profile

including the Group of International Finance Centre

• the extent to which banks have appropriate procedures

Supervisors (GIFCS), the Group of International Insurance

for onboarding customers

Centre Supervisors (GIICS) conference and AGM, and

regular meetings with the following industry bodies and  • the compliance monitoring plans of investment organisations: businesses, including their scope and adequacy given the

risk profile of the sector

• Jersey Bankers Association

• the extent to which Jersey businesses identify vulnerable

• Jersey Resolution Authority customers in line with their obligations and appropriately manage their relationships with them

• Jersey Association of Trust Companies

• application of controls over significant donors

• Jersey Funds Association

by non-profit organisations

• Channel Islands Financial Ombudsman

• the extent to which designated non-financial businesses and professions and virtual asset service providers

We engaged with the Channel Islands Wealth Management

complied with their obligations to report suspicious Forum and will attend regular meetings with them

activity in a timely and accurate manner

throughout 2024.

• the awareness of regulatory requirements among

Our outreach also included working with overseas regulators  individual directors with large portfolios regarding cross-jurisdictional entities or matters, including

the Guernsey Financial Services Commission and the Isle of

Man Financial Services Authority.

2023 examination activity Wstre sucutuprpeo. Trtehd these ce dhaenligvees ary ore pf thaer st oe bf aun osinensgs ooinbjg pecrotivgraes wmmith se to eomne csuhr ae wnge hes tao ove tuer ia nmts thernaal t

are accountable for delivery, improve our operational resilience and offer appropriate career opportunities to our team. Changes made in 2023 included:

During 2023 we conducted 130 examinations, including 100 thematic examinations,

25 periodic assessment visits and five financial crime examinations.  • eanstd pabrloisfheisnsgioan sS, nupoenr-vpirsoofirt oy trgeaamn fis oa ct uio sn ss a ed ond v n dir et su ia gl a nas tese d nt s oe nr -v fiic ne p ancro iav l bide ur ss  inesses

Thematic assessments are focussed reviews of specific risks in a sector and involve several entities. Following  • establishing a Risk, Data and Governance team to formalise the ownership of key processes these assessments, we provide individual feedback to participating firms/individuals and publish feedback  including the management of data and reporting, the risk data collection exercise and oversight papers on our website. In 2023, all thematic assessments included an element of financial crime risk in the  of Supervision policies and procedures

scope of the reviews.

Periodic assessment visits are focussed on individual entities which we have identified as high, medium-high, or medium risk. These assessments are conducted every two, three or four years depending on the entity's risk rating.

Financial Crime Examination Unit assessments assess compliance with statutory and regulatory obligations relating to anti-money laundering, countering the financing of terrorism and countering proliferation financing.

Authorisations statistics

Periodic assessment  Financial Crime

Examination type Thematic Total

visits (new for 2023) Examination Unit The table below shows the level of applications supported by the Central Authorisations Unit in 2023,

compared with previous years.

Accountant 12 – – 12

Banking 8 4 1 13 Licence type 2021 2022 2023 Casino 1 – – 1 Alternative investment fund services business 8 6 11 Fund service business 6 1 – 7 Auditors 3 7 4 Investment business 15 8 1 24 Banks 1 1 0 Lawyer 8 – 1 9 Collective investment funds 16 26 35 Money service business – 1 – 1 Control of Borrowing Order (CoBO) 111 157 126 Non-profit organisation 8 – – 8 Fund services business 26 28 17 Real estate agent 7 – – 7 General insurance mediation business 2 3 7 Trust company and service provider  30 11 2 43 Investment business 4 2 3 Virtual asset service provider 5 – – 5 Insurance 2 7 5 Total 100 25 5 130 Jersey private funds 163 195 136

Money services business 3 1 0 Non-profit organisations 63 29 117 Schedule 2 business 34 27 3,159[1] Trust company business 11 21 25 TOTAL 447 510 3,645

Cessations and revocations 238 159 445

This movement was driven by the island's reputation as a well-regulated international finance centre. Our team balanced this workflow across the year with the delivery of the JFSC's top strategic priority of regulatory effectiveness and combatting financial crime. To ensure effective resourcing and succession planning, Beverley Kent was appointed as Director of Registry in Q3 and Executive Director of Registry from 1 January 2024. Julian Lamb, who will have been with the JFSC for 25 years in 2024, moved into the role of Executive Director, Registry Projects from 1 January 2024.

Registry s structure and approach

The Registry holds and updates 15 registers, including the central register of beneficial ownership, companies, business names, foundations, partnerships and security interests. Jersey is one of a small number of jurisdictions to benefit from its regulatory and entity registries operating under a single commission.

We continue to operate a four cornerstones approach to prevent misuse of our Registry for money laundering and terrorist financing purposes:

1. Awfo icrt henneatwrriaglleo Rgreaoglupisse itnrrsycoognrapst  oaernkadeteiaoprner/arr nefuggneiscmttrei aontnito s n
2. JfAOoFMrrSdaLCed/rCrmaeFnginTdui oslJatbFtr lSeaigCdtia ogAtnaiMo tone Lf sk /o Ceuve nFep dr T e e/7 Cr r0s  Pt%, h  Fr e e o H s Mf ap c nooondnme bs yp oib a oLl n ke ai  ue ns d, weri it nhg
3. Aoatnc tlohemeg aprela gpnieysr tasepor pne rsd o toaof c fikhec, eewp ah adicnd hdr e pms lasa cinetsa oinb liingfaotrimonast ion

Registry  4 Aw iRthe ginisftorrym Sautipoenr vriesqiounir feumnecntitosn, developed

to carry out the proactive monitoring of compliance

While adverse market conditions resulted

in a reduction in the number of applications  WInfeoormpeartaioten )u (nJedresre tyh) eL  aF win a2n0c 2ia0l ,  Swe hr icvi hc ehs a  s(D tiwscol oaspuprreo  aa cn hd e Psr toov iesniosnu roef

of certain entities, our Registry division  t• hreeq inufiroermmeantitotno h perlodvbidyeuuspis t oa ddeaqteu aatned, aaccccuurraattee ainnfdo rumpa ttoio dna –te a: ll companies continued to see an influx of work in 2023,  manuds tc opnrotrvoidllee rRse, ganisdtr syi gwniitfihcdaenttapileerds ionnfos rmation in relation to beneficial owners

including structures looking to relocate to  • Registry Supervision – Registry has its own Supervision team which carries out Jersey from other international finance centres.  otaonn sdui stae. uInitnh 2sep0ne2tci3ct aiootune rsd R at ehngedi sdate rst yya sSiltuse pomefa  r1tv4i ics,2ir o5e n6v i t ea ews as m aon c udi na tidne etder  tproraoorgkt ia2et ,si 6o. 3n 0o fe  nd taittay sinu sbpmecit tt ieodn  s

Engagement Registry vulnerability

We continued our engagement programme in 2023 both  On 23 January 2024 a vulnerability was detected in our locally and internationally including: Registry system. An initial forensic review identified that

the vulnerability was due to a misconfiguration in our

• speaking at STEP Jersey's annual regulatory update

third party-supplied Registry system, which had been

on the requirements of the Disclosure Law and risk

implemented in January 2021. The vulnerability allowed assessment of entity setups and incorporations

access to non-public names and addresses. It did not

• speaking at the Corporate Registers Forum on Jersey's  link any individuals to registered entities or roles held. four cornerstones approach  We immediately took action to resolve the issue and have separately written to certain individuals whose name and

• working with the Government of Jersey and other JFSC  address was accessed and to whom we owe an obligation teams on the updated National Risk Assessments for  to communicate individually.

Money Laundering, Legal Persons and Arrangements,

and Terrorist Financing  We deeply regret this has occurred and are currently undertaking further investigations to determine how

• working with industry representatives to improve  this happened.

people's Registry experiences, including delivering

enhanced support for high-priority/time-sensitive  We have been working throughout with the Jersey transactions, and streamlining and improving the  Office of the Information Commissioner.

continuance process

Customer service

In 2023 we continued our focus on enhancing customer service. This included building the Registry team's resilience, with growth in our headcount of 15% to successfully deliver a rising number of incorporations, registrations and data updates.

We also continued to work with industry stakeholders

to provide certainty that high-priority and/or complex submissions would be registered on the agreed target dates. Despite this focus on improving customer

service, we recognise that our delivery in 2023 was not at the level we and industry expect. We experienced several challenges throughout 2023 - resourcing

and denormalisation being two of the largest - which impacted our ability to meet our published timeframes for registrations. Only 55% of the registration timeframes were met in 2023. This is well below our expectations and improving this performance is a key focus for us in 2024.

In 2023 our dedicated client response team responded to 76% of emails within 72hrs and 69% of phone calls within 3 rings, which is below our target level of 90%. We decreased the response time for Registry service desk tickets being resolved from 8 days to 5 days in 2023.

We continued to use digital solutions to provide straight through processing. We delivered a faster annual confirmation process through the myRegistry platform, with 35,445 annual confirmations submitted by the extended deadline of 31 March 2023. Of these 94% were processed straight through. By the end of 2023 37,029 annual confirmations had been submitted, representing 97% of all active registered entities.

Enhancing our customer service and delivering in line with our published timelines will be a key focus in 2024.

Digitalisation  

of Registry services

In 2023 we tested new API services to our myRegistry portal which we are looking to launch in 2024. We also enhanced the multi factor authentication tool on the portal, improving security and usability.

Statistics

2023  2022 Live entities  38,544  38,449 Total registrations  2,759  3,438 Company incorporations 2,464  3,050 Company dissolutions 2,452  2,244 Dissolutions cancellations 236  2,365 Entities migrated in  184  218

30.2% 37.7% Speed statistics

2023  2022

2 - hour fast track  1,040  1,130

1 day  469  538

2 day  263  235

3 day  154  209 5.6% 5 day  833  938

9.5% 17%

During 2023, we issued 10 public sanctions in the form of public statements and/or restricting individuals employment in the finance industry.

Enforcement  Investigations Cooperation

We have seen a change in the nature of the matters  In line with our international cooperation commitments, we being considered by Enforcement, with cases becoming  responded to several requests for assistance from overseas

Our Enforcement team conducts investigations  causing us to revisit ways of working and the skillset  jurisdictions. We saw an increase in these types of requests increasingly complex. This pattern continued in 2023,  regulators to support enquiries/investigations in their

into concerns of serious non-compliance with  required of team members. in 2023 in comparison with 2022. The requests were also

more complex in nature than those previously seen. Jersey s financial services regulatory framework  During 2023, we issued 10 public sanctions in the form

by relevant businesses and/or individuals.  oesafmnppcultobiyolimcn ses tnwatetienremtahelens tofis n iasansnudce/ eod ri nirnde tsuht sreti r cfyto.i rnFmgo uion rfd   npiv orii ndv -au ptaeuls b'  lic  Lcaonomdcaaplgleytr,e ewne etd a  wnueotwrh ko ewr diat iypesas  r ootfincausgle aevrnelcyry a c lclomo slaleat ltbye owrrs ia  tot hifo  Jjneo  ritn sht ea yitn 'stwe irlle st

reprimands. At year end, we had 30 active cases, split  be embedded in 2024.

relatively equally between businesses and individuals.

Enforcement policy The case outcomes included actions taken to protect

the public from financial loss and to protect Jersey's

Following consultation, in early 2023 we issued our formal notice designating which senior  reputation. In 2023, we issued three warnings related

managers fell within the scope of our civil financial penalties regime. The extension of the regime  to suspected scams and three sanctions relating to the

to designated senior managers was effective from 13 March 2023.  conduct of unauthorised business.

To further enhance Enforcement's performance, a significant workstream in 2023 was the  Of the cases investigated by Enforcement, there was production of additional internal guidance for the Enforcement team and decision-makers on key  a noticeable theme arising in a lack of risk understanding, aspects of the processes for investigating and determining how cases should be concluded. and poor corporate governance and board or senior

management oversight.

Stakeholder engagement

To support the new strategy, the Intelligence division has put

a particular focus on developing and maintaining relationships

with key stakeholders internally, locally, and internationally.

The team regularly meets third party agencies and regulators in other jurisdictions to identify trends and share intelligence. In 2023, we shared intelligence with 36 agencies in 25 jurisdictions.

Dissemination of intelligence

The Intelligence division receives, collates, investigates, and evaluates information from a wide range of sources to identify, among other things, potential non-compliance within the various sectors regulated and supervised by the JFSC.

Intelligence

The team processed over 1,400 pieces of information which resulted in more than 1,000 intelligence reports being disseminated both internally and externally. 2024 will see the team developing an in-house intelligence system to improve the efficiency and quality

Over the course of 2022 and 2023, we saw an  increase in the volume of intelligence we received.

of the intelligence it disseminates.

Supporting the implementation of sanctions related to Russia s invasion of Ukraine

The Intelligence division continues to play a key role in supporting

the Minister of External Relations in the implementation of financial sanctions following Russia's invasion of Ukraine. 43 pieces of intelligence were shared with the Minister and 150 pieces of intelligence were shared with the JFSC's supervisory teams to ensure regulated entities were aware of their exposure to sanctions issues.

The Intelligence division works closely with Enforcement, Supervision and Registry, developing intelligence to enhance our activities as a risk-based regulator. The Intelligence division is

Protecting whistleblowers

also responsible for maintaining the JFSC's whistleblowing line and works closely with law enforcement agencies and the Financial Intelligence Unit, Jersey.

The Intelligence division is responsible for working with whistleblowers, ensuring any communication is kept confidential and anonymity is protected. All details are held in a secure system where access is restricted to the division.

In June 2023 we set our three-year strategy for the Intelligence division. This includes clear objectives and key initiatives, building on the foundations already put in place by the team.

Over the years whistleblowing has provided vital intelligence for ongoing investigations and for the supervision of regulated entities. Our team received 40 whistleblowing calls during 2023, a third more than in 2022.

Suspicious activity reports

The JFSC's money laundering reporting officer function is carried out by senior staff in the Intelligence division. The suspicious activity reports we receive are based on supervisory visits, information received from other agencies, Enforcement investigations and

the Intelligence division's own horizon scanning. This resulted

in 81 suspicious activity reports being externalised in 2023.

Annual report 2023 49 www.jerseyfsc.org Annual repor t 2 0220323 50 www.jerseyfsc.org

Policy  

Facilitate business  integrity

Fighting financial crime  

Legal and policy changes to Schedule 2, which removed  scope exemptions within Jersey's AML/CFT framework  

to align with international standards, concluded in 2023.  To implement this regulatory change, we issued two  

joint consultations and feedback papers, published  guidelines and issued a range of FAQs. We also undertook  an extensive outreach and engagement programme to  support newly in-scope businesses and impacted industry  sectors to understand their obligations under the changed  regime. This outreach included 74 drop-in sessions, over 50  workshops and presentations, alongside social media and  radio awareness campaigns. We thank all those in industry  who have contributed to this substantial piece of work.  

The preparations for the MONEYVAL evaluation, of which  Schedule 2 changes formed part, were a significant driver  of activity during 2023. This activity included work on the  technical and effectiveness assessment documentation  and support for the Government of Jersey's ongoing  programme to develop and maintain up-to-date national  risk assessments (NRAs). During 2023, we contributed to  the work on the Virtual Asset Service Providers and Legal  Persons and Terrorist Financing NRAs, and the updating of  the Money Laundering NRA.  

In addition to this work, we also updated the AML/CFT/CPF  Handbook. In August 2023 we consulted on changes to  the Handbook and hosted drop-in sessions for industry to  discuss the proposed amendments during the consultation  period. The changes aligned terminology with FATF's to  make the Handbook clearer, and enhanced the content  

to provide additional clarity and guidance to more clearly  demonstrate compliance with the FATF Recommendations  and Immediate Outcomes. The revised Handbook became  effective 1 September 2023.

Supporting business  Basel III Consumer lending Tokenisation development and  Throughout 2023, we progressed plans to  We continued to work with the Government  Work commenced on potential revisions facilitating business  mcoomvep loiaunrcbeawnkitihn gthpeoplicreyv farialimnge wBoarske lt oIIwI ards  ooff Jaenrseewy raengdu linatdoursyt rreygtoimseh afopre c tohnes duemveerlopment  tfoo roiusrs ugeurids aonf cinei tniaolt ec ooinn tohfefe arpinpglisc,a wti iothn   ap rvoiec wes s resilience sAtsa na draersduslt wohf eoruer awpoprrko ipnr 2ia 0te2  3a ,n wd  ep wro ep ro er ati bo ln ea te.  l2e0n2d4inign.lWinee wexitphe tchte t oim wpolrekmfeunrtthateiro nont itmheist ainb le  tiso daucec otombmeocdoanticnlgud teodkeinn iHsa1t 2io0n2. 4T.his work

to publish the first consultation, including a  set by the Government.

We continued to undertake other policy  roadmap to implementation, in Q1 2024. Further  Sustainable finance development work during the year in support  consultations will take place throughout 2024/ Compliance function

of our guiding principle to safeguard the best  early 2025.

economic interests of Jersey and to protect  We continued our direct involvement and

and enhance the reputation and integrity of  Jersey private fund  Recognising the compliance resourcing  engagement with the Jersey for Good group. Jersey in commercial and financial matters.  challenges firms are facing, in the second half  We will develop our multi-year plan in response The main piece of work which we concluded  (JPF) guide of 2023, we began exploring ways in which we  to the Government of Jersey's future roadmap. in 2023 was a revision to the outsourcing policy.  could adjust our policy framework to support

In February 2023, we issued our feedback paper  industry. We plan to publish an initial discussion

on the follow-on consultation to the revised  A full review of the JPF guide commenced  paper on this area in 2024.

outsourcing policy, which became effective  in the second half of 2023. The review has

1 January 2024 following a six-month transitional  incorporated feedback received from industry

period. This update was designed to help  throughout the year on suggested areas of

businesses identify where outsourcing is taking  improvement. A working group was established

place, their obligations under the Codes and  in Q4 2023 to explore wider changes to the JPF

the situations in which they need to notify  guide. This work is due to be concluded in the

us of outsourcing arrangements.  first half of 2024.

We also worked on a number of policy areas, both in support of Government initiatives and to lay the foundations for further improvements in the policy framework.

Following feedback from industry, in May 2023  we paused our work to consolidate and simplify  the sectoral conduct and prudential codes into  one mega code'. As agreed at the time, we will  revisit industry appetite for a mega code in the  second half of 2024.  

Engagement  and outreach

International and local engagement are critical  in a fast-moving geopolitical environment. In  2023 our interactions with international bodies  including FATF, the International Organization of  Securities Commissions (IOSCO) and the Group  of International Finance Centre Supervisors  (GIFCS) directly contributed to our vision,  supporting regulatory effectiveness and  protecting Jersey's long-term reputation as a  well-regulated international finance centre.  

This engagement enabled us to present Jersey  effectively, upskill and update our collective  knowledge, and shape the regulatory agenda.  We also maintained our contact with overseas  regulators and the Channel Islands Brussels  Office to ensure that the JFSC is aware of  

policy development within the other Crown  Dependencies, the UK, and the EU.  

We engaged regularly with a number of local  trade associations including (but not limited  to) the Jersey Bankers Association, the Jersey  Funds Association, the Jersey Law Society, the  Jersey Association of Trust Companies and  Jersey Gambling Association.  

We held regular meetings with each of the  Channel Islands Financial Ombudsman and  Jersey Finance Limited, attended several  roundtable events and were involved in panel  discussions arranged by various members  

of industry.

Alongside that, our other policy engagement  across 2023 included hosting or speaking at more  than 30 industry events and meetings, working  with overseas regulators on cross-jurisdictional  matters and engaging with the Jersey Compliance  Officers Association, IoD Jersey, and the local  regulatory consultant community.

We will develop a multi-year  plan for sustainable finance

in response to the Government of Jersey s future roadmap.

Annual report 2023 55 www.jerseyfsc.org Annual report 2023 56 www.jerseyfsc.org

Marketing and communications

How we communicate with stakeholders has a direct impact on regulatory effectiveness. In 2023 we invested in our Marketing and Communications team to improve our engagement with industry and build external understanding of our strategy and delivery.

Through strategic hiring, the team strengthened and broadened their skill base, especially in digital marketing and public relations, to enable us to engage with stakeholders more effectively. We adopted a data-driven approach to marketing and communications, including using feedback from the industry survey to drive our strategy.

Digital marketing channels have been a clear area of focus to further develop perceptions of our employer brand and increase stakeholder exposure to our digital transformation programme.

Our team has worked closely with other agencies such

as the Government of Jersey on national communications, including the "combatting financial crime together" campaign, delivering events, social media and video content to increase the reach of our communications.

Marketing and communications have also been used effectively to help prepare our employees, industry, and Jersey more widely for the MONEYVAL evaluation through multichannel engagement, including events, industry updates, mailers, social media and public relations.

Across 2023 we hosted, or spoke at, more than 30 industry events to inform and engage our stakeholder community.

Responding to these challenges has strengthened our resilience and highlighted the continued importance of effective risk management and a robust governance framework for regulatory effectiveness. We also recognise that our approach needs to continuously evolve.

In response to this challenging environment, the expanding remit

of the JFSC and the growing importance of risk in how we operate as a regulator, in 2023 we reorganised our risk function to bring

all relevant areas under its remit including legal, data protection, information management and oversight of regulatory risk. With this change, the Director of Risk's role was also expanded and elevated to executive level, with Chris Gedrych promoted to Chief Risk Officer.

Responding to challenges in the geopolitical Risk, legal and  environment has strengthened our resilience

and highlighted the continued importance of data protection  effective risk management.

Throughout 2023 we managed and  The JFSC s risk model responded to many challenges including: In early 2023 we deployed enhancements to our risk model to:

• provide a more granular view of risk

• the ongoing war in Ukraine • enable us to deploy real-time amendments based

• war and escalating tensions in the Middle East on our horizon scanning activities

• difficult macroeconomic conditions Oatu ar rniaskti omnoa dl, e sle isc t ko er ya l t aon od u  re nut nit dy e l resvtae nl adnindg i so fin rfisokrmed by:

• high-profile business failures abroad

• the information we collect annually through our supervisory

• the rise of artificial intelligence data collection exercises

• the adoption of distributed ledger technology • tshuec hreassu tlthseomf atthice avanrdio fiunsarnecviiaelwcsrimaned e exxaammininaattioionnss we perform,

• the pressures of an expanding regulatory remit • data from breaches

• the intensity of a MONEYVAL evaluation • annual review meetings

• intelligence gathering

We use our risk model to determine our approach to the supervision of regulated entities, applying higher amounts of regulatory resources to supervising higher risk entities and sectors.

Annual report 2023 59 www.jerseyfsc.org Annual report 2023 60 www.jerseyfsc.org

Our focus in 2023 has been on the following principal risk exposures:

Enterprise risk  Risk Mitigation

management

Cyber security We align with industry best practice, and are advanced Principal risk exposures Human or technical weaknesses are exploited,  in the process of attaining our ISO27001 certification and

Through our enterprise risk management  allowing cyber criminals access to critical systems  Cyber Essentials Plus, to ensure our information security framework, we actively identify, measure  and highly sensitive data. management system is robust and fit-for-purpose.

and manage principal risk exposures facing

the JFSC as an organisation.

Critical system disruption

Through our system and infrastructure design, business We work collaboratively within our governance

Disruption to business-critical systems impacting  continuity management and regular testing we ensure structures to assess these risks and implement

operational efficiency and regulatory effectiveness  disruption to critical systems is kept to a minimum. appropriate and measured responses that protect  for both the JFSC team and industry.

the JFSC, evolve our risk culture and ultimately

support us in delivering on our purpose.

MONEYVAL

Strategy execution is closely overseen by the JFSC Operational and strategic activities are heavily  Executive Directors, underpinned by robust governance

impacted by our focus on MONEYVAL preparation  and oversight from the Board of Commissioners.

and response.

People

We have a robust defined people strategy Potential lack of capacity and capability across  underpinned by best practice approaches

the business resulting in the JFSC not being able  to recognition, performance management to meet current demands for business as usual  and learning and development.

as well as strategic delivery.

Business resilience Our response is underpinned by our approach

to business continuity management, deployment Inadequate response in the event of a crisis  of playbooks, regular testing and ongoing

or significant incident faced by the JFSC. continuous improvement.

Third party

Our approach is supported by risk-based policies Management and oversight of new and existing  and procedures and overseen by a dedicated

relationships does not work as designed, resulting  procurement function.

in disruption and reputational risk.

Data strategy We have a defined data strategy with Executive

ownership, supported by a programme to ensure Lack of a clear data strategy impeding our ability  appropriate data governance, training and upskilling,

to realise the benefits of use of that data as planned. and tooling.

Insider threat Access to confidential and sensitive information is

appropriately restricted and based on individual roles. Confidential and / or sensitive information  Our approach to protection of information undergoes

is compromised by our people. regular independent testing.

Prudential We closely monitor the evolution of this risk through data Challenging macroeconomic conditions expose  that we collect and horizon scanning activity. A revised both the banking and non-banking sectors  and refreshed approach to prudential supervision has

to the risk of financial failure.  been agreed and implementation is underway.

Annual report 2023 61 www.jerseyfsc.org Annual report 2023 62 www.jerseyfsc.org

Data protection

Compliance with the Data Protection (Jersey) Law 2018  

is overseen by the JFSC's appointed Data Protection  Officer. During 2023, there were no data protection  breaches that required reporting to the Jersey Office  

of the Information Commissioner (JOIC). In January 2024,  a matter was identified that required reporting to JOIC,  

and this was undertaken in accordance with our obligations  as a data controller.

Human rights

We are committed to respecting and upholding recognised  human rights, and the JFSC is fully compliant with Human  Rights (Jersey) Law 2000.

Anti-bribery and corruption

Under the Financial Services Commissions (Jersey) Law  1998 we seek to secure a proper balance between the  interests of persons carrying on the business of financial  services, the users of such services and the interests  

of the public at large.

In addition, we require relevant persons' systems and  controls to prevent, detect and report financial crime,  including measures to mitigate risk associated with money  laundering, terrorist financing, financial sanctions, bribery  and corruption, proliferation financing and carrying on  sensitive business activities.

Internally, conflicts of interest are strictly managed, and  clear policies exist for our people, including in relation to:

• share dealing

• gifts

• hospitality

We continued to make

progress with our digital

transformation strategy Technology   through our three well-

established projects: and data

Protect and sustain - consolidating, rationalising and simplifying our systems and infrastructure landscape

to increase efficiency, enhance productivity, develop

increased agility and realise greater organisational

efficiency, while continually strengthening our defences Harness technology  against cyber-attacks.

and influence the digitalisation

of financial services Tenhvei roopnemraetniot nisocfrait ircoablutsot b, eoftfih coiuern to,r agnadn irseastiiloiennat ntdecthonJoelrosgeyy .

In 2023 we:

Harnessing technology and influencing the digitalisation of financial  • further improved our cyber security standards, including services in Jersey is one of the JFSC's strategic anchors. Our goal is  strengthening our policies and procedures, deploying new to become an increasingly digitally enabled regulator. We want to  threat protection technology, and initiating organisational deliver highly efficient business outcomes and regulatory services  change to align with various recognised security standards through secure, reliable access to our systems, both for our team

• introduced an external security operations centre,

and our industry stakeholders.

complementing our existing in-house security monitoring We're determined to enhance Jersey's reputation as a leading  capabilities

international finance centre and the JFSC's reputation as an  • completed the tender process for a managed service employer of choice by: provider to manage certain aspects of our technology

estate on our behalf, realising greater internal capacity

• maximising the value we get from our existing investments  that can be focussed on increased delivery of digital

in technology  change more quickly

• harnessing the power of new and emerging technologies  • initiated a strategic and commercially focused to deliver and transform our services review of all technology investments, identifying

opportunities for consolidation, simplification Recognising the value that technology and data-led innovation  and improved cost efficiencies

bring to the JFSC's overarching strategy, during 2023 the Board of

Commissioners agreed to increase the seniority and remit of the

existing Director of Technology role and create a new role: Executive

Director of Technology and Data. Liam Ronan was appointed to this

new post, effective 1 January 2024. Liam originally joined the JFSC  

in April 2023 as Interim Director of Technology.

In 2023 we continued to source and

Isny s2t0e2m3s w nee cceosnstainr uy e t do   ts ot r se on ug rt ch ee an n b do dth e  vo eu lr o i pn t tehr en sa kll iyll  sa ,n cd a epxat ce itr yn a al nly d   develop the skills, capacity and systems facing technology and data capabilities.

necessary to strengthen both our

internally and externally facing technology and data capabilities.

Annual report 2023 65 www.jerseyfsc.org Annual repor t 2 0220323 66 www.jerseyfsc.org

Evolve and innovate - working with our Registry and regulated users, and wider industry, to identify new service and efficiency improvement opportunities through new technologies.

We remain committed to the continual improvement of our systems and services so that we can deliver increased usability and efficiency for all stakeholders. Throughout 2023, we delivered a range of improvements including:

• enhancing the Limited Liability Company online form within the myJFSC portal in response to industry demand, supporting the introduction of this new product type

to enable the island to secure new opportunities in

US markets

• migrating the data collection process for investment businesses to the myJFSC portal, significantly simplifying and increasing the speed with which submissions now take place

• introducing the ability for entities to administer their own users and roles online, empowering users with greater management of, and flexibility over, their experiences with us

• continuing the development of a new online chat functionality to improve user accessibility with the JFSC and increasing the speed of communications

• introducing the new Supervisory Bodies' and Material Change' online application forms to enable a more efficient end-user process and reducing the need for email-based correspondence

• deploying new, highly secure and more universally recognised electronic file sharing software, Egress, improving the ease with which we interact with external agencies and information sharing bodies

• replacing our legacy interview recording equipment with a modern digital equivalent that is more efficient to use

We continued to deliver progressive, technological change to benefit industry and its interactions with us.

External influence - continuing to engage industry stakeholders about our shared ambition to identify new and effective ways to digitally transform financial services in Jersey.

We continued to deliver progressive, technological change to benefit industry and its interactions with us. This included maintaining outreach to ensure ongoing and effective collaboration on our digital ambitions, and to champion regulatory technology (RegTech) solutions.

Our Innovation Hub worked with Government, Digital Jersey and Jersey Finance to develop a strategic approach to this.

 In 2023 we:

• carried out an industry survey on the use of digital identity solutions to understand barriers to adoption

• led digital identity training sessions, raising industry awareness of this useful technology and the value and efficiencies it can bring to businesses, particularly to the new customer onboarding process

• participated in an industry RegTech event with Government

• developed financial crime RegTech guidance responding to feedback in the 2021 RegTech report where barriers to use were highlighted

• supported industry in better managing risk through the increased adoption of RegTech and the additional capacity this can help businesses create

• contributed to the work undertaken by Digital Jersey

to create a digital sandbox for industry, allowing them to develop and evaluate changes to their customer onboarding processes against the regulatory framework

People  and culture

Develop our people, systems, and capability to be a high performing organisation

Our vision is to create a leading employment experience where our people are high performing, role model our values and enjoy professional and personal development, building confidence and competence for now and the future.

2023 workforce developments

With an increased regulatory perimeter and the resourcing demands of a MONEYVAL evaluation, we continued to grow our team. Our focus across 2023 was to bed in a high number of new starters, while also maintaining the pace of organisational change needed to achieve our aim to create

a leading employment experience, the bedrock for regulatory effectiveness.

On a practical level, we continued to improve both our recruitment processes and retention activity to provide stability, which was identified as a key area for improvement in our 2022-23 industry survey.

We increased our permanent headcount by 15% across 2023 and finished the year at 86% of our resourcing plan. Our attrition rate has halved since mid-2022 and was 14% at the end of 2023, more in line with local market norms.

Our efforts to promote our unique employment proposition via social media, employee referral and external engagement, have led to a significant improvement in our attractiveness as an employer and a change in how candidates are sourced. Approximately 50% of candidates now come via direct applications, employee referral and internal moves, with the remainder via agency. This reduces agency fees and, more importantly, is helping to build resilience into our resourcing model.

In 2023 we welcomed leaders with international experience in other finance centres alongside continuing to welcome a high proportion of returners to our workforce.

We also further stabilised resourcing levels by reducing the average time it takes us to fill roles. The average time from opening to filling a role was seven weeks in 2023, down from 11 in 2022. This, combined with the newly introduced three-month notice period, reduces the gap between leavers and starters, which in turn smooths out resourcing levels and improves continuity as handovers are easier to manage.

In 2023 we welcomed leaders with international experience in other finance centres alongside continuing to welcome a high proportion of returners to our workforce.

As of 31 December 2023, 9% of our colleagues had worked with us before, rising to 15% in our Supervision and Enforcement teams, further strengthening the depth and breadth of experience in our team.

With these improvements, we hope to improve service continuity and quality for industry stakeholders. We also hope to improve employee engagement and performance from a more stable environment, with workloads that enable time for development and career enrichment.

Making our workplace future ready

Training and development

Creating a leading employment experience is central to vision delivery and  it's critical we respond effectively to Jersey's competitive employment market.  As Jersey's only financial services regulator, we offer unique personal and  professional development opportunities.  

We continued to build our people's skills and expertise across the year  to improve stakeholders' experience of working with us. Actions we took  to achieve this included:  

• launching a new online learning portal for our team

• improving new starters' organisational and industry knowledge through  a revamped induction process

• deploying technical training across the organisation in key areas which affect  industry, including interviewing skills and professional report writing

• developing people's self-understanding, leadership and communication skills  through the roll-out of DiSC assessments, and training in effective questioning  and difficult conversations

Our support for our people's professional development saw 17% of our  workforce gain a professional qualification in 2023, despite the time and  focus required for the MONEYVAL evaluation.  

Culture

We launched our culture book (a principles-based guide replacing our employee  handbook) in April 2023 to provide a more progressive employment experience.  

A new peer-led, democratic recognition scheme was launched in January 2023  linked to our values and responding to one of our employee survey focus areas  of acknowledgment'. It supports cultural change and provides a mechanism  

for an instant reward and reinforcement of the desired behavioural habits across  the organisation.  

We've continued our work on values embedding, with enabling habits reflecting  our values of professionalism, respect, integrity, trust and excellence now  heightened in our performance management process.  

Our employee-led inclusion and mental health groups continued to drive  

cultural change in 2023 through a busy calendar of events, talks and internal  

communications including wellbeing month in June. The results of our dedicated  

all employee inclusion survey have enabled focus on the topics of most  

importance to our people. They have also laid the groundwork for further change  Our goal is for our people to be

in 2024 including through training, workplace policy development where relevant,

and skills building for people managers.

outcome-focussed, furthering our PWeer flaourmncahnecdet mhea  n2 a0 g2 e3 m p eernf tormance management enhancements in Q1. The  vision of being a high performing

cohf adneglieves reyn fsourr ien  do uu sr  tprey oisp l iem a pr re o  vt ear dg ae nte dd r  ea it n t fh oe rc r eig sh tt h d ate l div ee mra ob nl se ts ra, t th ine g c ea nd ae bn lc ine g   regulator building for the long-term hobauubtilcditoisnmigse fi-moforpctouhrsets aleondnt ,ga f-nutdert rwhmeil rsl iubncegc  moeusersa vsoiusf riJoeendr s.oeOfyub. re ginogaal i sh ifgohr- opuerr fpoerompinleg t roe bgeu lator  success of Jersey.

Industry survey

We are committed to listening to stakeholders, using feedback to improve our effectiveness as a regulator.

We continue to measure our performance using research insights to ensure we are responding effectively to industry feedback. The results of our industry surveys will be used to measure our progress, acting as a strategic key performance indicator.

In 2022, we launched our inaugural annual industry survey which completed in 2023. This was followed by a second survey launched in 2023, which completed in 2024.

Approach

Our survey was carried out by an independent market research agency. We used a two-stage approach, starting with a quantitative online survey supplemented by

18 qualitative in-depth interviews. The qualitative stage enabled our independent research agency to explore

the questionnaire result themes, validate the findings, and understand key drivers in more detail.

Overview of results

Areas of strength included our responsiveness on international matters, with most respondents agreeing that we act in the best interests of Jersey. We continue

to have a reputation for operating fairly. Respondents also praised the professionalism of our team, found value in our in-person events, presentations and meetings, and acknowledged that recent portal improvements are going in the right direction. We saw an increase in the number

of times people reported engaging with us, with the quality of engagement remaining broadly the same year-on-year.

It was clear however that the scale and pace of essential regulatory change in 2023 had an impact on our stakeholders. While our team showed real commitment under challenging circumstances and important progress was made in relation to our myJFSC portal, employee retention and stakeholder engagement, there is clearly still work to be done. Our website, portals, in-person support and phone experiences remained key areas for improvement.

We must target better results, mindful of the context of the MONEYVAL evaluation and the significant efforts our colleagues put towards this in 2023.

Quantitative study

The online quantitative survey closed in November 2023. It included closed and open-ended questions, enabling respondents to provide more detailed responses in

open comment boxes. The survey was completed by

416 respondents, representing trust company businesses, fund services businesses, investment businesses, accountancy services, banking, and insurance.

We saw a dip of around 5% in respondents' rankings of our portals, website, videos/podcasts, industry updates and email updates compared with our previous industry survey results.

The figures on the right show average respondent scoring of each area out of 10, where 10 is excellent.

myRegistry

2023 5.7 2024 5.5

myJFSC

2023 5.9 2024 5.6

JFSC website

2023 7.0 2024 6.4

Videos/podcasts

2023 6.9 2024 6.4

Industry updates

2023 7.1 2024 6.7

Email update

2023 7.1 2024 6.7

The majority of respondents continued to believe we act well or very well in the best interest of Jersey.  Qualitative study

How do you think the JFSC as a regulator acts  18 individuals took part in in-depth interviews, which were completed in early 2024. These interviews provided an

opportunity to test the findings from phase one, adding context and detail to the initial results. Respondents were chosen in the best interest of Jersey? by the independent third-party facilitator of the survey and represented a cross-section of companies.

49%

42%

24% 26% 27% 23%

7% 2%

Very well Well Somewhat Not at all

We saw a slight reduction in how well we are perceived compared with other international regulators, but the majority of respondents continued to believe we are better' or much better'.

How do you think the JFSC compares with other international regulators?

48%

42%

28%

21% 23%

16%

7% 8% 6%

1%

2023

Engagement 2024

• respondents reported using a mix of channels, most commonly email

• as in last year's survey, phone support was identified as an issue

• multiple participants had been to in-person events and working groups, which were positively perceived

Positives

• team seen as professional, polite and knowledgeable – particularly at senior levels

2023 • clear perceived improvements in

interactions from last year, with

2024 acknowledgement of the difficulties of Schedule 2 implementation and MONEYVAL

• industry updates, videos and events valued

Research respondents called for:

Perceptions

• strong international reputation, slightly lower perceived on-island reputation

• regarded as world-leading on compliance but there were concerns about associated costs/commerciality

• recognition of the substantial impact of MONEYVAL evaluation

Negatives

• i ssues with timeliness, consistency and perception that JFSC is evasive/unapproachable

• i ssues with website search functionality and myRegistry, although portal improvements seen as heading in the right direction

• c ontinued perception of high turnover and lack of experienced employees

Much better Better Exactly   Worse Much worse

Support the same

Of the respondents who said their experience of engaging with us had changed, 45% reported it

Including improvements in consistency of information, clarity of guidance and FAQs, timeliness of responses,

had improved, compared with 35% in 2023. We also saw a reduction in respondents who reported

engagement had become worse. We acknowledge however that a majority of respondents rated our  phone support/switchboard efficiency, employee training and experience, and stabilisation of employee turnover. engagement as worse' and this is a key area of focus for us.

Digital improvements

If your engagement experience changed,

did it get better or worse?  Ismeaprrcohv ifnugn tcht eio snpa elietyd., user-friendliness and notification system of the myRegistry and myJFSC portals and website

65% 55% 22002243 Engagement

45% More in-person engagement to increase approachability.

35%

Commerciality/competitiveness

Ensuring we are seen as a competitive place to do business internationally.

Better Worse

Human rights,  anti-bribery and corruption statement

We are compliant with the Human Rights (Jersey) Law 2000, as well as the Corruption (Jersey) Law 2006.

Under the Financial Services Commissions (Jersey) Law 1998 (Commission Law) we are required to "secure a proper balance between the interests of persons carrying on the business of financial services, the users of such services and the interests of the public at large."

We have a clear conflicts of interest policy for all employees, which sets out procedures for:

• conflicts of interest

• share dealing

• gifts

• hospitality

The JFSC requires those undertaking financial services business to have in place systems and controls to prevent, detect and report financial crime, including measures to mitigate risk associated with money laundering, terrorist financing, financial sanctions, bribery and corruption, proliferation financing and carrying on sensitive business activities.

Once baseline data is established, we will finalise our targets and begin to report progress. These targets will relate to our 10 focus areas:

Environmental

1. reducing printer paper usage
2. monitoring and benchmarking energy use on a per capita basis
3. monitoring waste and recycling

Social

Environmental,  social and  governance (ESG)

To add structure and rigour to our ESG goals, we have taken inspiration from the 16 United Nations Sustainable Development Goals and selected topics most relevant to us as an organisation.

With ESG reporting protocols subject to stringent audit standards, in 2023 we focussed on establishing baseline data (required for a minimum of 12-24 months) and aligning our efforts behind these.

4. measuring the sentiment around inclusion through our employee survey
5. publishing our gender balance at all levels of the organisation, including Commissioners
6. assessing and publishing gender pay gap data
7. maintaining our position as a Living Wage employer and gaining associated accreditation

Governance

8. publishing our targets in our 2024 annual report, with baseline data
9. creating and deploying a procurement framework with ESG criteria for suppliers
10. conducting ongoing Board of Commissioners and Executive governance and effectiveness reviews

In service of these areas of focus, we have a mixture of centrally driven activity led

by Executive Directors and initiatives driven by our employee-led groups, such as our Green team and Inclusion group. We support island-wide ESG initiatives and are a member of the Network for Greening Financial Services and Jersey for Good.

Finances   Iann 2 in0c2r3e awsee rienc toortdael dinacodmefie coift o£f2 £.40m.4wma(s2o0f2f2s:e st u bryp launs i£n1c.r3emas).e T i hn i  so wpe ar sa ati n £g 1.  7c mos cts h  ao nf  g£ e4 . f1 rm om. T 2h 0es 2e 2  ,i n wc hre ea res es and resources  isITnneoortavpcilecienroasctoicmnmogsetcsefoo(sr£t t1shm pe)r .iynecaipr arellaycrheeladt e£ 2to9 .i7nmcr e(2a0s2e 2s :i n£ 2s 7ta.3f mfin) gfo cllo os wts in ( g£ 2 a. n8 imnc)  ra en ad s i en ic nr erea gseus la i tn o pryr o ff ee es is niocnoaml e

and a reduction in Registry fee income.

Regulatory fee income rose by £2.8m as a result of fee increases to resource an enhanced regulatory remit, fund our capital investment programme, and further develop our capability to combat the threat of financial crime. Registry fee income decreased by £0.5m relative to the prior year, which was an expected reduction due to one-off income from additional historical confirmations received in 2022.

Operating costs

Total operating costs increased by £4.1m (16%) to £30.1m.

Staff costs are the most significant item of expenditure, representing over 60% of our cost base. Cost increased by £2.8m (17%) compared to 2022, driven by an 11% increase in the number of permanent employees. However, the average cost-per-head rose by 5% - below inflation - as we effectively managed our growing structure. Professional fees also saw an increase of £1m, driven by the need to respond to, and appropriately support, the MONEYVAL evaluation.

Depreciation remains stable year-on-year at £1.5m, with investment in systems being predominantly operational in nature rather than capital.

Capital expenditure

Our focus for 2023 on MONEYVAL, in combination with project governance, has ensured investment in strategically important projects.

Capital investment was £0.2m for 2023 compared to capital investment of £1.6m in 2022. Of this £0.2m, £0.1m was invested in our office furniture, fittings and equipment, and £0.1m in computer equipment.

Expenditure of £0.7m incurred in relation to the development of new modules for the Registry, Risk

and Supervision systems in 2022, recognised as computer systems under development', was reclassified as computer systems' in 2023, as these modules came into use that year.

The net book value of fixed assets has reduced from £7.7m at the end of 2022 to £6.4m at the close of 2023, with depreciation being the main movement.

Financial position and look forward

Our retained liquid asset position increased to £13.2m during 2023 (2022: £11.7m) driven by transactional volumes exceeding expectations and limited capital investment during the period. Our financial reserves have reduced to £10.4m (2022: £10.8m) due to the planned deficit in the period.

Our focus for 2023 on MONEYVAL,  The level of retained liquid assets will support the continued investment in our change programme and

planned initiatives driving improvements in our core system, websites and planned premises move over the coming years.

in combination with project

governance, has ensured investment  Ttohicso anltsinoueenwsuitrhe sbtuhsaint,eisfsacsriigtinciafilc parnotj eacdtvse, rinseaedvdeitniot no ctoc uorusr, nwoer mwoalu rlde greutlaatino rtyh ea nfidn Ranecgiiaslt rayb oiliptey rations, in strategically important projects. while appropriate action is taken.

Accountability report

Governance arrangements

The Board of Commissioners (Board) maintains overall responsibility for the governance of the JFSC, setting its strategic aims and supporting the Executive Leadership Team to put them into effect; and holding the Executive accountable, within the scope of the FSC(J)L and the powers that the JFSC has been granted under that law. The Board also oversees the running of the Board Committees.

Led by the Interim Chair, Monique O'Keefe, the Board believes in high quality and effective governance arrangements and, in the absence of specific codes or standards for the governance of a financial services regulator, the Board follows the UK Corporate Governance Code as an appropriate benchmark.

In line with the principles of the UK Corporate Governance Code, the JFSC's Board establishes the strategy, and seeks to satisfy itself that this and its culture are aligned. In 2023 the JFSC continued to progress its people strategy to further support the effective delivery of the JFSC's strategic objectives.

The Board is mindful of the level of resource required to negotiate an ever

more complex regulatory environment, as well as supporting the need to meet

international standards. It seeks to ensure that the necessary resources are in

place for the JFSC to meet its objectives and looks to measure performance Governance

against those objectives by way of regular reporting on KPIs at Board meetings. statement TeoJutoFnfnhSadee2Cbxe0Belr'2seoci3taRrus,ir itstdsrihkvke heemt faoulJiseFtnbv,SeceeisnCtlatico'tasslonubsRdeCl wiissishnhhs kigieee cC fddlh eoR  aawgmin saf amkdrl s,a   iOmdtrmteafa eefiotn eawrca g  oepog avrrre .neokTd irt  sohes.  efLaec dwpet Bird io nous nb iad2gyare0nd nnC2idficto3  coaimntann ofmntdoitbn ries drmuf is enefaieovgst ecni taolteoolin vr lph e rmGmaecavaleeo ernnrvnaratat egdr nogeo tff umloas tlhra, re  eewrmn athos. is cth

With this change, the Director of Risk's role was also expanded and elevated

reporting on its top enterprise risks and risk appetite statements continue to be developed for the sectors that the JFSC supervises.

Mindful of its responsibilities to stakeholders, the Board ensures effective Constitution engagement with, and encourages participation from, these parties. This

was further supported by the rollout of an external engagement strategy in

2023, with the JFSC seeking to strengthen its relationships both locally and The Jersey Financial Services Commission (JFSC) is a statutory body established under Article 2 of  internationally with active participation from Commissioners as well as the

the Financial Services Commission (Jersey) Law 1998 (FSC(J)L) which provides that the JFSC shall  senior management teams. This will bolster Jersey's reputation internationally be governed by a Board of Commissioners comprising persons with financial services experience,  and improve communication and engagement with industry. The Board plays regular users of such services and persons representing the public interest. a key role in listening to industry to understand current trends, as well as

international developments, and is actively seeking to improve the JFSC's Accountability arrangements interaction with industry. The Board fully supports strategic engagement with

industry bodies.

The JFSC is an independent body, accountable to the public through the island's elected

representatives, namely the Chief Minister and the States of Jersey. The relationship with Ministers  In terms of the JFSC's employees, through the Remuneration Committee the

is set out in a memorandum of understanding to ensure the independence of the JFSC, while  Board ensures that workforce policies and practices are consistent with the facilitating effective dialogue and working practices. Article 12 of the FSC(J)L provides that the  company's values and support its long-term sustainable success. The JFSC's Minister may give the JFSC general directions in respect of the policies to be followed by the JFSC  workforce is able to raise any matters of concern via the formal route of an

in relation to the supervision and development of financial services in Jersey and the manner in  internal whistleblowing line or through attendance at the Staff Forum meetings. which any function of the JFSC is to be carried out. The JFSC's Staff Forum has been through a process of formalisation, with

a dedicated Chair and the formulation of a terms of reference. A number of

The JFSC produces an annual business plan and, separately, this annual report, to inform members  initiatives were supported by the Staff Forum in 2023, such as the JFSC's ESG of the States Assembly and other stakeholders. The JFSC consults extensively on all proposals to  policy development. Representatives from the Staff Forum were invited to create or amend laws and regulations and provides feedback statements to explain how responses  attend the Board's Remuneration Committee in 2023, bringing the voice of the were taken into account. employee into the boardroom.

There is a clear division of responsibility between the Chair and the Director General, no individual has unfettered power of decision-making.

Delegation of powers

The Board delegates its powers to the Director General, where possible,  The Board delegates its tDoi reencstourr eGtehnaet r tahle is J FreSsCp ocna sni balcet faonrd t hrees spuocncde swsiftuhlo luetaudnedrsuhei pd eolfa tyh. eT hJFeSC,  powers to the Director

erCenogsmuulmraintisogsr ityohnsatetarJnse dtraoser ddyes'sl  ei spg omastaietiinoistnar ieansse tadrin.cHtineotdwebrenyva elteri,oginnisalslao fit mi no ena n.aFcroeiaral sec,xetanhmter peploeww,ittehhre hoBifgothhaerd  to ensure that the JFSC

General, where possible, aCopcfootwans sel iiensrsqtaeucdseainnomtrbliylpea,rrtfi vhomaeuta neBndoncaooernmrdttp oihsaeanmJtyFro.iSrAbeCufin'unsalvlwloeielnxvbeprsedlialtainent awisotoiwnom nwtoer.j eceagorrseaneartdyesifs nostgfec d.dtoh erEtegna.dfiloetrlhceaegnma taeionbnto coaafrd s es.  can act and respond

Director General s responsibilities without undue delay.

The Director General is accountable to the JFSC board, which is chaired, on  an interim basis, by Monique O'Keefe, and is made up of on and off-island  Commissioners. The Director General is an ex officio member of the Board.

The Director General:  

• provides effective leadership of the JFSC in its day-to-day operations  as both a regulator and a registry, ensuring the organisation delivers  its strategic priorities

• works collaboratively with the Board and the Executive Leadership  Team towards common objectives, fostering effective teamwork

• drives the transformation of capabilities through the implementation of  strategy and the development of the JFSC's annual business plan and budget

• plays a leading role in Jersey's financial services ecosystem working closely  with Government and industry to deliver high standards of regulation and  a sustainable future for the sector

• maintains and enhances effective supervision of Jersey's financial services  sector with a particular focus on financial crime

• develops and strengthens good relationships with regulated firms,  other regulators and relevant international bodies

• is responsible for the effective operation of risk management framework and systems of internal control

Composition of the Board and  appointment of Commissioners

The Board currently consists of the Chair, Deputy Chair and six other  Commissioners, including the Director General. Over half of the Commission  Board are women. All of the Commissioners are considered to be independent,  with the exception of the Director General. A chart of the current Commissioners  is set out on pages 127-128 of this annual report and further information on their  skills, knowledge, experience, and significant interests is set out on the JFSC's  website at www.jerseyfsc.org/about-us/board-of-commissioners.

Following a recruitment process, a new Chair, Jane Platt CBE, and  Commissioner, Helene Narcy, were appointed in April 2024 following the  retirement of Commissioners Pichler and Morris after nine years on the  Board in January 2024, and the retirement of Mark Hoban and Tracy Garrad.

Recruitment of Commissioners follows a rigorous and transparent process in line  with the Jersey Appointments Commission's guidance and the recruitment of the  JFSC's Chair is directly overseen by the Jersey Appointments Commission.

Annual report 2023 89 www.jerseyfsc.org Annual repor t 2 0220323 90 www.jerseyfsc.org

Board meetings   MONEYVAL and attendance mutual evaluation

The Board met eight times during 2023 to consider  The Commissioners were active participants in the strategy, risk, preparedness for the 2023 MONEYVAL development and education process that the JFSC's team evaluation and regular business.  undertook ahead of the onsite evaluation. The Board

maintained detailed oversight of progress throughout

In July, the Commissioners and the Executive met for a  2023 in the build-up to the onsite, and, through frequent strategy day to look at the shape of the 2024 business plan  updates and participation in key events, oversaw the

and to review progress with strategic objectives. Other  JFSC'S preparation work.

topics included a presentation on the future of registries

from the Luxembourg Registry as well as discussions  Nomination Committee around Jersey as an IFC, horizon scanning including digital

assets, organisational capacity and capability development

and opportunities for SupTech. The Board's Nomination Committee was chaired by Mark

Hoban in H1 2023 and subsequently by Commissioner

The main strategic focus of 2023 Board agendas,  O'Keefe. It is responsible for reviewing the structure,

aside from MONEYVAL, included the people strategy,  size and composition (including the skills, knowledge, progress with response to the industry survey, external  experience and diversity) required of the Board and makes engagement, digital transformation and the development  recommendations to the Board with regard to any changes.

of an internal ESG policy.

It met four times in 2023, and its principal focus was the Throughout the year, the Executive and Commissioners  recruitment of two new Commissioners in H1, in light of participated in events with fellow regulators, industry  pending departures/retirements. In H2 the Nomination representatives and Government ministers. Frequent  Committee oversaw the recruitment of a third new

Commissioner and formed part of an interview panel for dteisrmcussosifosnigs ntoifiockapnltaficnea onvceira lt hsee ryveicaer swmitha tGteorvse arnn md reengt uinla r  the recruitment of a new JFSC Chair, which was chaired

planning meetings were held in preparation  by the Jersey Appointments Commission.

for the MONEYVAL evaluation.

The Nomination Committee also instigated and oversaw Board members record their conflict of interests on  the external Board Effectiveness Evaluation, supported the JFSC's Register of Interest and are asked to make  by the Commission Secretary.

annual attestations as to those entries. Furthermore,

Commissioners consider the potential for conflicts of  Audit Committee

interest to arise in meetings and excuse themselves should

any perceived or actual conflict be identified. Interests are  The Audit Committee is responsible for monitoring internal included in Commissioners' bios on the JFSC website.  financial control systems and to work with the Executive

and the external auditors to ensure the quality of the Board Apprentice  management financial reports and the annual accounts.

programme TChoemCmoismsmiointteerePmalemt efirv. eC otimmmesis dsuiorninegr s2 B0 u2 t3le. Irt aisn dchLaairuerde nbsy As a result of Board Apprentice's I WILL' initiative, Silvia  joined the committee in October 2023.

Roberts from Government's Law Officers' Department

joined the Commissioners for Board meetings for a year  Remuneration Committee from Q2 2023 as a Board Apprentice. This Board very

much enjoyed having Silvia attend the Board and other  As well as monitoring the level and structure of

meetings, and found the Board Apprentice scheme to be  remuneration for senior management (directors at grade very valuable. nine and above) including individual performance against

objectives, the Remuneration Committee provides advice Board effectiveness remuneration policies and practices to support strategy

and counsel to the JFSC's executive in the production of

In the interests of good governance, the Board underwent  and promote long-term sustainable success.

an external board effectiveness evaluation in 2023,

conducted by independent expert, Fidelio. The evaluation  Commissioner Bowes is chair of the Remuneration included an element of Commissioner assessment. The  Committee.

outcome of the evaluation led to a number of actions being

recommended, which the Board will commence to address  The Committee met on five occasions during the year,

in 2024. joined by the Director General and the Executive Director

of People and Culture.

Metrics

We report on a number of people metrics. The following data is presented as at 31 December 2023.

Gender

• 59% of our total employee population are female

• our Executive team has a 57% to 43% female-to-male ratio

• our Commissioners have a 56% to 44% female-to-male ratio

Contract type Remuneration and

employee report •••21000e8emmeppmlolopyyleoeeyeses oeonsnozfienrxpoee-dhr moteuarrnmceocnnottncrtoarcnattcsrtascts

• 9 commissioners (including one whose last day was 31 December 2023)

Tenure (includes only The JFSC s remuneration principles  permanent employees)

are designed to support our strategic  • average employee tenure is 4.5 years anchor of developing our people,  Location

systems and capabilities to be  • 218 on-island employees

a high performing organisation.  ••04 oofnf--iissllaanndd Ceommpmloiyseseios ners

• 5 off-island Commissioners

Wbaec ksegerokutnodast tarnadc te, xdpeevreileonpcaens da nredt atoinr ehwigahr cda tlhiberme ifnodr iavidddui an lgs vwa il tuhe d t ihvr eoruseg h  Learning and development focus on delivering outcomes and role modelling enabling behaviours.

• £218,596 spent in 2023

Wowuheri ccrehommhaupsnle eatr ehaditgioahnnlype cxaotcemkrapngeaetl i ptrieavmye balaienbneocduhrcmmoamarkrpkienetgtit. eivxeeirnc itshee tjou reisnds iucrteio t nh ,a t  Remuneration

Employees are split between nine grades.

Grades 7-9

• 72 employees

• average salary: £103,861

Grades 4-6

• 118 employees

• average salary: £55,276

Grades 1-3

• 28 employees

• average salary: £32,757

Annual report 2023 95 www.jerseyfsc.org Annual report 2023 96 www.jerseyfsc.org

Director General remuneration

Jill Britton's remuneration for the year was £339,450 (2022: £299,450) which comprised fixed remuneration of £278,250 (2022: £265,000), and variable remuneration of £61,200 (2022: £34,450). Jill Britton was appointed as Director General on 7 April 2022.

Commissioner remuneration

Commissioners receive a fixed annual amount. No additional amounts are paid for participating in or chairing sub-committees, dealing with enforcement cases or attending to other matters.

Before 2023, the Commissioners' fees had remained unchanged since 2015 and were increased by 5% in 2023.

Commissioner  2023 remuneration 2022 remuneration Mark Hoban (retired as Chair 30 October 2023) £130,644 £150,000 Jill Britton £0 £0

Monique O'Keefe ( Deputy Chair until 31 October

£35,018 £33,350 2023, Interim Chair from 31 October 2023)

Simon Morris (retired 20 January 2024) £38,325 £36,500 Tracy Garrad (retired 31 December 2023) £38,325 £36,500 Annamaria Koerling £38,325 £36,500 Peter Pichler (retired 20 January 2024) £27,300 £26,000 Matthew Palmer £27,300 £26,000 Claire Bowes £35,569 £38,357 Megan Butler (appointed 31 May 2023) £22,356 £0 John Laurens (appointed 31 May 2023) £15,925 £0

£409,087 £383,207

Governance structure

Board of Commissioners

Executive Directors

Committee ERxisekc Cutoivmem  ittee

• operational performance oversight

• budgeting • assists the Board Risk Committee

in overseeing the management

• business planning of risk across the JFSC, ensuring

Information   High Risk

• legal risk management that policies, organisational

• board preparation Security  structures, budget and resources  Business Forum

are appropriate to manage

• government engagement Committee the JFSC's principal risks

• project governance • ensures consistency in decisions regarding incorporation, registration

• provides oversight and prioritisation  and authorisation of high risk entities, of information security issues emerging business models and

products and services

Regulatory  

Staff Forum Portfolio review/ Senior Leadership  Effectiveness

• platform for staff voice Project and  team Committee Programme Board • business plan input • provides strategic advice and

guidance to both Supervision and • oversight of key strategic projects • stakeholder engagement Enforcement on matters relating to • people strategy role ML/FT, conduct and prudential risk

• management of key strategic

projects

• status and reports

Supervision Data Collection Forum

• considers the suitability and use of data requested from industry through targeted, sector specific, industry data collection exercises

Financial statements

Annual report 2023 101 www.jerseyfsc.org Annual report 2023 102 www.jerseyfsc.org

Independent auditor s report

To the Chief Minister of the States of Jersey

Opinion Conclusions relating to going concern

We have audited the financial statements of the Jersey  We are responsible for concluding on the appropriateness Financial Services Commission (the Commission') for the  of the Commissioners' use of the going concern basis of year ended 31 December 2023 which comprise the income  accounting and, based on the audit evidence obtained,

and expenditure account, statement of financial position,  whether a material uncertainty exists related to events statement of changes in accumulated reserves, statement  or conditions that may cast significant doubt on the

of cash flows, and notes to the financial statements,  Commission's ability to continue as a going concern. If we including a summary of significant accounting policies.  conclude that a material uncertainty exists, we are required The financial reporting framework that has been applied  to draw attention in our report to the related disclosures

in their preparation is applicable law and United Kingdom  in the financial statements or, if such disclosures are Accounting Standards including Financial Reporting  inadequate, to modify the auditor's opinion. Our conclusions Standard 102 The Financial Reporting Standard applicable  are based on the audit evidence obtained up to the date of in the UK and Republic of Ireland' (United Kingdom  our report. However, future events or conditions may cause Generally Accepted Accounting Practice). the Commission to cease to continue as a going concern.

Our approach to audit

Materiality Key audit  Overview of our audit approach

matters Overall materiality: £499,000 (2022: £466,000), which represents 1.75% (2022: 1.75%)

of the Commission's revenue.

Scoping The key audit matter identified is the risk of fraud in revenue recognition

and this is the same as in the previous year.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most  Description Audit significance in our audit of the financial statements of the current period and include the  response

most significant assessed risks of material misstatement (whether or not due to fraud) that

we identified. These matters included those that had the greatest effect on: the overall  KAM

audit strategy; the allocation of resources in the audit; and directing the efforts of the  No material engagement team. These matters were addressed in the context of our audit of the financial  Disclosures exceptions  statements as a whole, and in forming our opinion thereon, and we do not provide a separate  were noted

opinion on these matters.

We have presented the key audit matters below, together with significant risks and other risks relevant to the audit.

Key audit matters

Risk of fraud in revenue recognition

We identified the risk that revenue may be misstated as one of the most significant assessed risks of material misstatement due to fraud.

In our opinion, the financial statements:

• give a true and fair view of the state of the Commission's affairs as at 31 December 2023 and of its deficit for the year then ended

• are in accordance with United Kingdom Generally Accepted Accounting Practice

• have been prepared in accordance with the requirements of the Financial Services Commission (Jersey) Law 1998

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit

of the financial statements' section of our report. We

are independent of the Commission in accordance with the ethical requirements that are relevant to our audit of the financial statements in Jersey, including the FRC's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our evaluation of the Commissioners' assessment of

the Commission's ability to continue to adopt the going concern basis of accounting included review of budget forecast that included a five year financial resilience assessment. We challenged management on the appropriateness of assumptions made and reviewed previous budgets against actual results to assess reliability of management forecasting.

In our evaluation of the Commissioners' conclusions, we considered the inherent risks associated with the Commission's business model including effects arising from macro-economic uncertainties such as inflation,

we assessed and challenged the reasonableness of estimates made by the Commissioners and the related disclosures and analysed how those risks might affect the Commission's financial resources or ability to continue operations over the going concern period.

Based on the work we have performed, we have not identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast significant doubt on the Commission's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the Commissioners' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

The responsibilities of the Commissioners with respect to going concern are described in the Responsibilities of Commissioners for the financial statements' section of this report.

Due to the ad-hoc nature of some revenue lines, there is a risk that not all revenue transactions occurring during the period have been billed to the customer and recorded in the accounting records.

The main revenue streams of the Commission are regulatory and registry fees, of which annual fees are charged on different dates throughout the year depending on the specific fee. There is a risk that revenue may not be recorded in the correct period.

Relevant disclosures in the annual report and financial statements 2023

• Financial statements: Note 4 regulatory fee income and Note 5 Registry fee income

• Accounting policy is included in Note 1 of the financial statements.

How our scope addressed the above

In responding to the key audit matter, we performed the  Regulatory fee income

following audit procedures: Our approach to the audit of regulatory fee income was as follows:

Our audit approach included but was not limited to: • identify an entity which from our own experience received its

• we performed a walkthrough of annual confirmation fee  regulatory license during the financial year. Walkthrough the posting on the Regsys system to understand the workflow  data for this entity from the public registry to the list of regulated from creation through to acceptance and posting into the  entities on the JFSC website, and then follow the license through NAV accounting system  to the underlying ERM system to ensure that the data captured is in line with our expectations and the entity was included within

• we utilised data analytics to interrogate data extracts from the  the 2023 fee runs appropriate for the licenses held

myRegistry (Regsys) system to obtain all annual confirmations

which were created and registered during 2023  • review the XML query utilised to generate the fee run for each

material regulatory class

• transactional line items in relation to annual confirmations were

then analysed to ensure that total fees for each submission  • using data analytics to determine whether all expected entities were in line with the published fees on the JFSC website and  are included within the relevant fee run and that the fee charged that the net fee (after deduction of the government levy) is what  is consistent with the published fee notice on the JFSC website

was recorded as Revenue in totality in the general ledger • perform a proof in total to determine whether all invoice lines

• other transaction related fees, originating from orders placed  within the ERM system have been posted to the revenue totals on the portal, have been reconciled in total through to the  in the general ledger and within the correct accounting period

general ledger and tested substantively • we substantively tested using sampling other regulatory income • all material revenue postings in relation to registry fees have  of a transactional nature

then been analysed using data analytics to ensure that they  • perform a proof in total to validate the deferred income balance have been credited to revenue and debited either to debtor

control accounts or to the bank and covered by our balance  As a result of our work, no material exceptions were noted.

sheet testing accordingly

• any remaining postings are considered as part of our approach to the testing of manual journal entries

Statement of changes in accumulated reserves

Statement of cash flows for the year ended 31 December 2023

Accumulated

reserves 2023 2022 £'000 Notes £'000 £'000

Balance at 1 January 2022 9,421 Cash flows from operating activities

Surplus for the year 1,339 (Deficit)/surplus for the year (384) 1,339 Balance at 31 December 2022 10,760 Interest receivable (574) (146)

Depreciation, amortisation and impairment charges 9, 10 1,550 1,533 Balance at 1 January 2023 10,760

Utilisation of provision (14) - Deficit for the year (384)

Movements in creditor provisions 91 103 Balance at 31 December 2023 10,376

Movement in doubtful debts provision 57 (57)

Deferred rental incentive – (10) The notes on pages 109 to 123 form an integral part of the financial statements.

(Increase)/decrease in debtors and prepayments (1,579) 1,333 Increase in income received in advance 877 914 (Decrease)/increase in creditors (1,818) 1,816 Net cash (used in)/generated from operating activities (1,794) 6,825