Annual Report 2012 - the Jersey Financial Services Commission

More documents

Recommendations

Info

Corporate GovernanceAttendance at meetingsDuring 2012, attendance at meetings of the Board and itsCommittees was as follows:Commissioner Board Audit Remuneration NominationClive Jones 10/10 5/5 3/3John Averty 10/10 4/4 3/3John Harris 8/10 2/3Lord Eatwell 9/10 3/3John Mills, CBE 10/10 5/5 3/3AdvocateDebbie Prosser7/10 5/5 3/3Markus Ruetimann 10/10 3/3Philip Taylor 1/1 1/1Crown AdvocateCyril Whelan10/10 3/3Sir Nigel Wicks 5/5 2/2 2/2Stephan Wilcke 3/4 0/1 0/1Ian Wright 7/7 2/2 3/3Accountability arrangementsWhilst the Commission is an independent body, it isaccountable for its overall performance to the Statesthrough the Minister.As part of its accountability arrangements, the Commission’sBusiness Plan, Budget and Annual Report are presented to,and discussed with, the Minister. Under Article 21(2) of theCommission Law, the Minister is required to lay a copy ofthe Annual Report before the States not later than sevenmonths after the close of each financial year.Under powers granted by Article 12 of the CommissionLaw, the Minister may, after consulting the Commissionand where the Minister considers that it is necessary in thepublic interest to do so, give to the Commission guidance orgive in writing general directions in respect of the policies tobe followed by the Commission. The Commission has aduty in carrying out its functions to have regard to anyguidance and to act in accordance with any directionsgiven to it by the Minister.The Minister and the Commission have entered into aMemorandum of Understanding to clarify the circumstancesand the manner in which the powers granted under Article12 of the Commission Law will be exercised. The text of theMemorandum can be obtained from the Commission’sWebsite.Whilst the Commission does not have any shareholders,the Board has taken steps to understand the views of theCommission’s major stakeholders by holding annualmeetings with senior Government Ministers and bi-annualmeetings with Jersey Finance Limited and representatives ofother Industry bodies. The Executive also meets withGovernment Ministers and Officers, and representatives ofJersey Finance Limited and other Industry bodies, on aregular basis. The Commission held a second IndustrySurvey in March 2012, the results of which were publishedin full on the Commission’s website.“The Board discusses the risks and uncertainties facing the Commission on aregular basis. Discussions and decisions are influenced by global political,economic, legal and regulatory factors, as well as local considerations and theoperation of the Commission itself.”30 | ANNUAL REPORT 2012
Financial StatementsIntroductionFee income in 2012 was £13.00 million compared to £12.45 million in 2011. The main reason for the additionalincome was the increase in funds fees that took effect from 1 July 2012. This was the first increase in such fees formore than ten years.Bank deposit interest received amounted to £87,000, which was £24,000 higher than in the previous year.This was due to the conversion of some deposits to longer fixed terms, attracting higher interest rates.The Commission’s major item of expenditure is staff costs. As in previous years the Commission has been increasingstaff numbers only when absolutely necessary. During 2012 the average number of staff employed increased from115 to 117, and the annual pay review averaged 2.8%. An analysis of this expenditure is contained in note 5 to thefinancial statements.Expenditure on computer systems continued, in order to improve administrative efficiency. The amount of spendrepresents the maintenance costs for all systems (hardware and development costs are capitalised and depreciatedover three years) and the software licence fees.During 2012, the Commission employed a firm of professional consultants to provide advice and assistance toreview the current state of filing, archiving and document retention. Expenditure on legal and professional servicestherefore increased to £480,000.The net amount spent on investigations and litigation was £745,000, compared to £398,000 a year earlier.The increase arose mainly because of the costs associated with two major cases that involved considerable timeand effort, and which will continue into 2013. Despite this, the Commission has continued its efforts to workwith regulated businesses to resolve problems before they reach the stage where formal regulatory action needs tobe taken.Visits continued to be made regularly to overseas regulatory authorities and to international standard-settingorganisations. It is important to maintain regular liaison and information exchange with these international bodies.This will continue in the coming years.The Commission remains committed to staff development, education and training, so appropriate funding will bemade available annually for this important aspect of the Commission’s activities.Overall, the level of operating expenses increased by £1.09 million, from £11.88 million in 2011 to £12.97 millionin 2012. The net result for the year was an operational surplus of £114,000 and a consequent rise in reserves to£7.25 million. The Commission’s has continued its policy in respect of its accumulated reserve in order to build upsuch a reserve to an amount equal to six months’ operating expenditure plus the average of the last five years’ cost ofinvestigations and litigation. This is in order to meet contingencies, particularly the sizeable sums of money that maybe required to fund investigations and litigation.The Commissioners are of the opinion that the Financial Services Commission is a going concern, and the financialstatements have been prepared accordingly. The auditors, PKF (UK) LLP, who were appointed in accordance withArticle 21 of the Financial Services Commission (Jersey) Law 1998, have merged their business with BDO LLP,who have indicated their willingness to continue in office.ANNUAL REPORT 2012 | 31
Page 1: Annual Report2012
Page 5 and 6: Jersey is situated off the north-we
Page 7 and 8: HighlightsPrincipal Themes During 2
Page 9 and 10: Advocate Debbie Prosser (November 2
Page 11 and 12: Chairman’s StatementContinued low
Page 13 and 14: Director General’s ReportOverview
Page 15 and 16: Supervision of individualsAll syste
Page 17 and 18: John HarrisDirector GeneralFUNDSOFF
Page 19 and 20: International Regulatory StandardsI
Page 21 and 22: The Commission continually looks at
Page 23 and 24: Total Examinations 2012Division The
Page 25 and 26: Enforcement case statisticsPercenta
Page 27 and 28: ResourcesOne of the aims of the Com
Page 29 and 30: The Board is satisfied that its com
Page 31: The members of the Audit Committee
Page 35 and 36: INDEPENDENT AUDITORS’ REPORT TO T
Page 37 and 38: Balance Sheet as at 31 December 201
Page 39 and 40: Notes to the financial statements f
Page 45 and 46: Statistical AnnexeCompaniesRegistry
Page 47 and 48: FundsCIFs & COBO Funds - Analysis b
Page 49 and 50: BankingBanks and Bank Deposits - £
Page 51 and 52: Assets of BanksTotals and sub-total
Page 53 and 54: Key trends and profitability of Ban
Page 56: www.jerseyfsc.org

Annual Report 2012 - the Jersey Financial Services Commission

Create successful ePaper yourself

Delete template?

Save as template?