Constant improvement

Thursday, 05 November 2015
The Jersey trust experts who took part in the latest STEP Journal roundtable sponsored by Jersey Finance considered the future of international finance centres (IFCs).

The Jersey trust experts who took part in the latest STEP Journal roundtable sponsored by Jersey Finance considered the future of international finance centres (IFCs). They identified investment in people and technology as the way for IFCs to meet transparency obligations and called for sustained efforts to raise standards in IFCs to ensure the success of the industry.

The UK government’s quest to have its Crown Dependencies and Overseas Territories set up registers of beneficial ownership has intensified over the past few months, with the latest news reports suggesting the UK government may consider legislating to that effect. The drive stems from fears that not enough is being done to tackle tax evasion and money laundering.

For Jersey, this is not going to cause any problems. The jurisdiction started collecting information on the beneficial owners of Jersey companies in 1999, and in 2001 extended this requirement to trust businesses.1 ‘Jersey has many years of experience and practice in collecting information on beneficial owners. In truth, this is not a game-changing event for Jersey, but it certainly will be for some other offshore financial centres,’ explained Giles Corbin TEP, Partner at Mourant Ozannes.

High stakes

Richard Corrigan, Deputy CEO of Jersey Finance, explained that international finance centres (IFCs) that do not fully understand the beneficial ownership behind structures will not be able to adequately fulfil reporting requirements under the US Foreign Account Tax Compliance Act (FATCA) and the OECD’s forthcoming Common Reporting Standard (CRS). With FATCA imposing a 30 per cent withholding sanction, correct reporting is essential. Richard’s advice to other IFCs is to ‘invest proportionately in technology and personnel to make sure these standards can be delivered’.

Tension between IFCs is often inevitable as they compete for business, but panellists at this roundtable discussion had the bigger picture in mind: the reputation and success of the trusts and funds industry. They all agreed that it is in everyone’s interest for IFCs to meet these new transparency standards. ‘If one financial centre gets bad press, it reflects on us all,’ said Anthony Dessain TEP, a Partner at Bedell Cristin.

The undertaking to put systems in place for reporting will be huge and, while smaller IFCs may struggle with the initial outlay, Anthony believes their size will prove beneficial in the end: ‘Small IFCs are able to know their clients much more closely because of the village-like professional community,’ he said.

The effort will be worth it, our experts noted, as IFCs that embrace transparency will not only attract good business but will also find it less onerous to deal with banks, which are becoming more discerning about the business and jurisdictions they are prepared to deal with. ‘If you want to be a player as an international finance centre, then there is a requirement to be compliant. Jurisdictions that aren’t keeping pace with that change will find it increasingly difficult for their clients to access the primary banking system operated by the largest banks in the world,’ said Siobhan Riley, a Partner at Carey Olsen.

Jersey’s framework for collecting beneficial ownership information could serve as a useful example to other IFCs, and indeed many onshore financial jurisdictions, that are seeking solutions to meet these new international standards. 

Richard explained that the Jersey Financial Services Commission (JFSC) has already partnered with regulators from other jurisdictions that have a similar business mix to Jersey. ‘There has been collaboration with the Dubai International Financial Centre and with the Monetary Authority of Singapore. The JFSC talks to its peers on a regular basis and exchanges views, ideas and experiences,’ he said.

Embracing technology

IFCs that seek out new technology will see their investment repaid, as they will be able to use it not only to meet reporting requirements but also to improve client service. ‘Embracing technology is a means to enhance the customer experience. The digitisation of “know your client”, for example, has made customer take-on that little bit easier,’ said Richard.

There will also be practical benefits for practitioners, as technology will enable them to do their job more efficiently. ‘You need the right pieces of technology to be able to enhance your client base. The investment pays a good dividend later on,’ said Giles.

However, with the increasing reliance on technology comes the need to ensure data is held safely and securely. ‘The risk that systems could be hacked is of growing concern to clients,’ said Siobhan. ‘We have already seen it happen in terms of whistleblowers in Switzerland.’ It’s also an increasing worry for practitioners – so much so that digital assets and the security issues surrounding them formed the focus of STEP Jersey’s Annual International Conference on 5 November, explained Lorraine Wheeler TEP, Client Services Director at First Names Group.

Under the CRS, governments are committing to automatic exchange of tax information, so, from 2017, there will be an exponential rise in the volume of sensitive financial data being exchanged. There is industry-wide concern that such information may have to be exchanged with jurisdictions where, ‘whatever the formal legal position, the rule of law is such that there can be little confidence that undertakings will be adhered to regarding how information received from another state will be used’.2 This concern was echoed by our panellists, with Siobhan warning that ‘each IFC needs to assess its own platform and reputation for being a safe place to keep data’. These concerns were met with strong assurances from Richard that it is a matter ‘the Jersey government is taking very seriously’.

An increasingly complex world

STEP’s primary role is to provide professional development opportunities to ensure trust professionals are well trained and able to maintain high standards. It does this by offering courses and other technical information. ‘Our education programme aims to cover the STEP world,’ explained Rosemary Marr, who is Chair of STEP’s Professional Development Committee, ‘but we are also looking at the evolution of the industry – for example, we have a compliance course in the pipeline. The rapidity of regulatory change means practitioners’ knowledge can quickly become out of date.’

In Jersey, regulations set out educational requirements for trust company professionals: they must have a relevant professional qualification, such as the STEP Diploma in International Trust Management, and meet a minimum level of continuing professional development (CPD). ‘Twenty-five hours is the minimum amount of CPD, but I’m aware of organisations that train their staff well in excess of that level because it’s such a fast-moving market,’ noted Giles.

Our experts recognised that the current complexity of legislation and regulation means that the days of the trust ‘generalist’ are over. ‘I don’t think there’s a role for the “old guard” who knew a little bit about a lot of things and not a lot about anything in particular. The world has changed, and that’s a challenge all IFCs must face,’ said Ian Crosby, Managing Director at Stonehage Financial Services Holdings Ltd.

Professionals now require a thorough understanding of their area of expertise and the insight to know when they need to seek external professional advice. ‘I think, increasingly, practitioners are aware of their limitations, so, if they need to obtain foreign tax advice, they seek that tax advice,’ said Giles.

Panellists agreed that IFCs cannot remain complacent, particularly in the face of increasing regulatory and legislative complexity. ‘They need to look ahead to ensure they have the technology and an educated workforce to provide a high-quality service to clients,’ said Rosemary.

For our panellists, this forward-thinking approach is essential for IFCs’ future success – just meeting current standards isn’t good enough. ‘We’ve got to set policy and regulations based on what we want IFCs to be in the future and not what they need to do to survive in the here and now,’ Richard concluded.

Rosemary Marr TEP is Head of Trust and Corporate at Moore Stephens in Jersey. Rosemary is a Vice-President of STEP and Head of the Professional Development Committee

Ian Crosby is a Managing Director at Stonehage Financial Services Holdings Ltd, Jersey, and President of the Jersey Association of Trust Companies

Anthony Dessain TEP is a Partner at Bedell Cristin 

Richard Corrigan is Deputy Chief Executive of Jersey Finance

Giles Corbin TEP is a Partner of Mourant Ozannes

Siobhan Riley is a Partner at Carey Olsen

Lorraine Wheeler TEP is Client Services Director at First Names Group, Chair of STEP Jersey and Vice-President of the Jersey Association of Trust Companies 

How Jersey is branching out

According to the World Wealth Report 2015,3 Asia Pacific has the greatest number of high-net-worth (HNW) individuals worldwide, while, in 2014, the HNW population in the Middle East grew by 7.7 per cent and in Africa by 5.2 per cent.

‘We’ve seen more Jersey firms travelling to Asia Pacific, making acquisitions there or establishing an office in Singapore or Hong Kong,’ said Richard.
Giles singled out China as a good prospect: ‘There’s no denying that China is an incredibly important global player. It already has the second largest high-net-worth-individual base, with 2.38 million USD millionaire households in 2013; there has been an explosion of Chinese millionaires.’

Africa is a newer market for the island, but one in which Jersey is making inroads. ‘The volume of input from Jersey firms into Africa – Sub-Saharan Africa in particular – and the Gulf states has been very strong over the past 12 months,’ Richard explained.

Ian had a word of caution for new entrants into Africa: ‘It is quite a sophisticated market. It’s not easy to go in as a new starter and to know exactly what you’re doing. I wouldn’t recommend it for the uninitiated.’


Jersey is one of the world’s leading international finance centres, offering a robust, modern and sophisticated legal framework, which has kept it at the forefront of global finance for the past 50 years. From simple trusts and underlying company structures to high-value and more complex solutions, involving trusts, companies, limited partnerships and foundations, Jersey offers a sound proposition to businesses and investors alike. Jersey Finance promotes and develops the international finance centre of Jersey to key target markets in the UK, Europe, India, Africa, the Gulf and Greater China. For more information, please visit

  • 1Financial Services (Jersey) Law 1998 (as amended)
  • 2George Hodgson, ‘Data insecurities’, STEP Journal, volume 23, issue 6
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Hannah Downie

Hannah Downie is Managing Editor of STEP Journal and its supplements.

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