The Jersey view - intelligence and tech high on regulatory agenda

The Jersey Financial Services Commission is becoming more intelligence led and is embracing new technology according to panellists in a seminar hosted in partnership with Ogier focused on enforcement and supervision.

Ogier Global Head of Regulatory Rachel Cropper-Mawer provided an overview of the broader regulatory landscape, followed by a presentation by Jersey Financial Services Commission (JFSC) Executive Director of Enforcement Kerry Petulla and Executive Director of Supervision David Eacott. Ogier Regulatory Consulting director Jamie Biddle joined the panel for a Q&A session to finish.

The JFSC's insights on enforcement and supervision focused on the use of intelligence, the type of cases they are investigating and key risk areas for supervisory focus.

During the seminar the panellists:

• provided a comprehensive overview of the shifting regulatory environment and the critical need for businesses to adapt and innovate to stay ahead in a rapidly changing world

• highlighted the dynamic nature of risk management and oversight in the current landscape, with global threats demanding vigilant cybersecurity measures, swift responses to sanctions and other challenges

• explored how the integration of artificial intelligence (AI) tools into supervisory processes signifies a transformative move towards more efficient and regulatory oversight

• discussed evolving perspectives on outsourcing risk and enforcement approaches, with increased attention on personal accountability and intelligence-led strategies

In this article, Rachel Cropper-Mawer and Jamie Biddle summarise the key themes and insights discussed.

Cyber risk and resilience

David Eacott noted cyber risk and resilience as a key risk area for businesses and one the JFSC are focusing on. This is not surprising given the significant increase in risk across the globe posed by organised crime and rogue states using an arsenal of cyber weapons.

Supervisory visits

The JFSC's Supervision team are developing AI tools to assist them with supervisory visits, which should speed up  processes. Whilst checking policies and procedures is important, AI tools could greatly assist regulators with these more administrative tasks.

Outsourcing risk is being revisited

Feedback on the Compliance function revealed that 55% of respondents indicated a preference to maintain the status quo (retaining employment and residency requirements for Key Persons). The panelists agreed that this outcome was not anticipated. Had this question been posed three years ago there would, in our view, have been a different outcome. Following increased consolidation and a greater number of individuals forging a career in risk and compliance, there has been less pressure on compliance resource.

Enforcement does not regard remediation as a significant mitigating factor

Kerry Petulla explained that remediation reveals if a business has been operating as it should, or not. Kerry confirmed that self-identification and remediating in themselves would not, as was previously the case, result in an entity avoiding enforcement action or be considered as a mitigant to the level of enforcement sanction. Self-reporting and the regulatory track-record of the entity would be a key factor.

This is a divergence from the approach taken by some other regulators, such as the Department of Justice in the US in the matter of ABB Ltd (learn more in this summary from the Compliance Podcast Network), and more generally where robust remediation is seen as a mitigating factor. However, it is reflective of a mature regulatory environment which includes the availability of  excellent compliance resources and personnel to firms such that they should have robust programmes already.

Enforcement are working on 36 cases

Kerry Petula explained that a large percentage of these cases relate to investigations into fitness and probity, with a focus on personal behaviours, including the financial wellbeing of principal persons. This was anticipated given the JFSC has stated it will, post MONEYVAL, move to focus on conduct issues.

Supervision and Enforcement are intelligence led

Kerry Petulla reinforced that submitting a Suspicious Activity Report to the Financial Intelligence Unit was not equivalent to speaking to Supervision or Enforcement and emphasised the increasing importance of intelligence to the regulator and the steps now being taken to further develop intelligence received.

The increasing importance the JFSC places on intelligence is reflected in statistics presented in its Annual Report for 2024. These statistics reveal 1,373 pieces of information were received by intelligence, 54 whistleblowing calls were received, 520 intelligence reports were disseminated and 108 external shares of intelligence were made to 14 different jurisdictions.

How Ogier can help

There are financial and criminal intelligence and enforcement bodies in each of Ogier's key legal jurisdictions and we have extensive experience representing our clients in respect to preliminary investigations and enforcement actions brought against them.

It is crucial to have an experienced team who know the regulatory environment as well as understanding the business to achieve the best outcome of any enforcement action. Ogier has that experience and knowledge.

Contact our team to find out more.

About Ogier

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice