The Jersey Financial Services Commission has published a new draft Code of Practice for the 190 trust companies that undertake business in that island.
The key elements are as follows:
4.1.2 The draft Codes retain six fundamental principles for trust company business:
- A registered person must conduct its business with integrity;
- A registered person must have due regard for the interests of its customers;
- A registered person must organise and control its affairs effectively for the proper performance of its business activities and be able to demonstrate the existence of adequate risk management systems;
- A registered person must be transparent in its business arrangements;
- A registered person must maintain, and be able to demonstrate the existence of, adequate capital resources; and
- A registered person is expected to deal with the Commission and other authorities in the Bailiwick in an open and co-operative manner.
4.1.3 In addition, the following seventh principle has been added, under which will be structured codes relating to the advertising of products and services:
- A registered person must not make statements that are misleading, false or deceptive.
Now let's for one moment compare this with the requirements of Jersey's new trust laws which (as noted previously on this blog) allow a trust company to run a trust where:
1) the trustee can accept they act entirely in accordance with the settlor's instructions and so pretend to be a trustee when they're not and
2) they must return the trust property on demand to the settlor, in complete denial of all the principles of trusts.
It's pretty hard to reconcile such naked abuse of normally accepted trust law with:
- openness and co-operation;
- an absence of misleading statements, deception or falsehoods.
But this is Jersey, and normal standards do not, of course, apply.
Thanks to Chris Steel for drawing this to my attention.