Annual Report 2012 - the Jersey Financial Services Commission

Chairman’s StatementFollowing discussions with the Attorney General, it wasagreed that we could develop a range of monetary penaltiesfor infractions of our various Codes of Practice. A survey ofJersey compliance officers by Deloitte in 2011 hadindicated that the Industry was prepared for this and mighteven support it. We also concluded that as far as possiblethe accumulated penalties should be used to help offsetlicence fee costs for the Industry sector(s) in respect ofwhich they were levied. This is now being consulted onwith the Industry.“The Commission is its people.They bring to us an ability to work hard,to work intelligently, to be dedicated tomaintaining regulatory standards and towork constructively with those whomthey regulate.”It is important to note here that the proposed civil penaltiesregime neither mitigates breaches of the law – whichremain the prerogative of the Attorney General – nor lead toa conclusion that the Board will in future shrink fromremoving from the Industry any person or firm who hasdone demonstrable and reckless harm to customers.Last year I spoke about working towards ‘scaleability’in relation to our supervisory operations. During 2012,our project to automate the submission of personalquestionnaires for Principal Persons went live. This was oneof our first projects in this area and has been well-receivedby the Industry as well as improving our own turnaroundtimes. The Board also approved significant furthertechnology investment in information management andrecords management to support the work of the SupervisionDivisions. This will continue throughout 2013.As we note later in this annual report, the Board subscribesto the UK Corporate Governance Code and adheres to theCode’s principles. Indeed it is the Board’s view that our owncorporate governance standards should be equal to or betterthan those of the Industry we regulate. To that end theBoard has regular formal meetings with Government andwith the Industry - our stakeholders - as well as frequentinformal meetings with the Minister for EconomicDevelopment and with Jersey Finance.The Board conducted a review of its effectiveness in 2012.Commissioners were surveyed anonymously for their views,the results of which were discussed at two subsequentBoard meetings.In general, the Commissioners were satisfied with theBoard’s effectiveness during 2012. That is not to say thatthere is no room for improvement and Commissioners feltthat further effort needed to be made in relation tostakeholder communication, reflecting on strategy anddiscussing internal succession planning and talentmanagement. I expect we shall conduct a fresh externallyfacilitatedreview in 2013 to build on this work.We continue to work closely with the Guernsey FinancialServices Commission (“GFSC”), and during the year theDirector General had meetings with his counterpart as I didwith the GFSC’s Chairman. We will continue to find ways toco-operate and share efficiencies. Additionally, we have theannual formal meeting with the GFSC and the Isle of ManFinancial Supervision Commission, which was particularlyproductive in 2012.In carrying out my duties, I am fortunate to be supported byan enormously talented Board. In 2012, the Boardunderwent some changes. In June, Sir Nigel Wicks steppeddown after reaching the statutory retirement age forCommissioners and following five years of valuable service.The Commission has been fortunate to have Sir Nigel as aCommissioner since 2007. His unparalleled experience andwise advice, coupled with his ability to move seamlesslyfrom the strategic to the tactical have been of huge benefitto us.During the year, we were joined by two newCommissioners. In April, Ian Wright joined as a localCommissioner following the customary open applicationand selection process. His considerable experience as anaccountant in private practice as well as his work with theFinancial Reporting Council in the UK greatly strengthensthe Board in the areas of accounting and governance.Stephan Wilcke joined the Board in July, replacingSir Nigel Wicks as one of our off-Island Commissioners.His experience as a consultant and then as head of thefinancial services practice of a major private equity investorhave given him a wide perspective on the Industry.His more recent role as head of HM Treasury’s AssetProtection Agency allows him to bring additional insightson hard-to-value assets.I am delighted to have Ian and Stephan join us and I wouldlike to thank the entire Board for its support and effortthroughout the year.The Commission is its people. They bring to us an ability towork hard, to work intelligently, to be dedicated to maintainingregulatory standards and to work constructively with thosewhom they regulate. The leadership of the Director Generalexemplifies all of these qualities. On the Board’s behalf I thankhim and all our Staff for their work and dedication in 2012.10 | ANNUAL REPORT 2012