Ask Mat - The JFSC refers to “All regulated businesses” in its fraud warnings – WHY???

Ask Mat - The JFSC refers to “All regulated businesses”, in its fraud warnings – WHY???

Mat says – Thank you for your question, which I suspect follows the following published warnings:-

• 02 July 2025 - Fraud Warning: Altas Investment Finance Limited (the impersonating entity)
• https://www.jerseyfsc.org/news-and-events/fraud-warning-altas-investment-finance-limited-the-impersonating-entity/
• 01 July 2025 - Fraud Warning: LTIP Funding Company Limited (the impersonating entity)Fraud Warning: LTIP Funding Company Limited (the impersonating entity)
• https://www.jerseyfsc.org/news-and-events/fraud-warning-ltip-funding-company-limited-the-impersonating-entity/

In both instances, the JFSC:

• Highlight the impersonating entity is also carrying on, or holding out as carrying on,
  • Schedule 2 business (Lending) in or from within Jersey when it is not authorised to do so by the JFSC.
• And advise:

The problem with the Statement is that:

• A Jersey company involved only in lending is a SUPERVISED “ONLY” PERSON, and
• Supervised persons (other than VASPS) ARE NOT LISTED on the JFSC website.

What is essential to understand is that in Jersey:

• A regulated business is also a supervised person in all instances.
• However, a supervised “only” person is not a regulated person.
• A supervised “only” person is also referred to as a SCHEDULE 2 BUSINESS.

This can be supported by JFSC, who says:

• We supervise financial institutions, designated non-financial businesses and professions and VASPs for anti-money laundering, countering the financing of terrorism and countering proliferation financing.
• These financial services businesses are also known as Schedule 2 businesses.
• There is no intention to widen the scope of this public listing to other Schedule 2 businesses.

In Jersey, the terms "regulated business" and "supervised business" have specific meanings within the context of financial services oversight:

1. Regulated Business:
• These are businesses that require a license or registration from the Jersey Financial Services Commission (JFSC) to operate. They must comply with specific regulatory requirements and standards set by the JFSC.
• Examples include banks, investment firms, insurance companies, trust and company service providers, and fund services businesses.  
• The JFSC actively monitors these businesses to ensure they adhere to regulatory standards, which include financial stability, anti-money laundering (AML) measures, and consumer protection.
2. Supervised Business:
• These businesses are subject to oversight primarily for compliance with anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations.
• Supervised businesses may include entities that are not necessarily regulated by the JFSC for their core activities but still need to comply with AML/CFT requirements. This can include certain types of non-profit organisations and other entities listed under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008.
• The supervision ensures that these businesses implement adequate measures to prevent money laundering and terrorist financing.

The impact of not listing supervised “only” persons (SCHEDULE 2 BUSINESS), a member of the public cannot check to see if they are dealing with an appropriately approved lender, estate agent, lawyer, or accountant.

For more information on the subtle difference between being regulated and supervised, I have added some notes below.

REGULATED BUSINESSES -V- SUPERVISED BUSINESSES

In Jersey, "all regulated businesses" refers to entities that are subject to oversight and regulation by the Jersey Financial Services Commission (JFSC).

These businesses operate in various sectors and must comply with specific regulatory requirements to ensure the integrity and stability of Jersey's financial system.

Here are some key categories of regulated businesses in Jersey:

1. Banking: Includes banks and other financial institutions that offer banking services.
2. Investment: Covers investment firms, including those involved in fund management and investment advice.
3. Insurance: Encompasses companies providing insurance products and services.
4. Trust and Company Service Providers (TCSPs): Includes businesses that offer trust and company administration services.
5. Money Service Businesses: Covers entities involved in money transmission, currency exchange, and similar services.
6. Fund Services: Includes businesses that provide services to investment funds, such as administration and management.  

These businesses must adhere to regulatory standards set by the JFSC, which include requirements for licensing, compliance, and reporting. The goal is to maintain a robust and transparent financial sector in Jersey.

AML/CFT/CPF supervision is separate from the conduct of business and prudential regulation. For example, activities based on exemptions to the Financial Services (Jersey) Law 1998 (the Financial Services Law), such as the 'professional investor regulated scheme' or 'connected company' exemptions on which many SPV entities rely are caught under Schedule 2 and give rise to the obligation to register under the Supervisory Bodies Law.

Schedule 2 is broadly framed, and the list of activities that constitute 'financial services business' are arranged under the following headings:

• Financial Institutions (FIs) (including lending and investing, fund and security services activities, portfolio management and investing, administering or managing funds or money).
• Designated Non-Financial Businesses and Professions (DNFBPs) (such as lawyers, accountants and real estate agents). DNFBPs also include Trust and Company Service Providers (TCSPs) (including formation agents, acting or arranging for another person to act as a director or secretary of a company and providing a registered office for a company or a partnership).
• Virtual Assets Service Providers (VASPs) (including, among others, token exchanges and those providing custody, administrative or other services in respect of virtual assets); and
• Express Trusts.

The JFSC has published:

• Guidance on the interpretation of Schedule 2. This guidance emphasises that the activities in Schedule 2 should be interpreted broadly.
• Various FAQs and notices issued by the JFSC address matters of scope and interpretation.

SOURCES

• Jersey AML SUPERVISED BUSINESS are also 1] REGISTERED PERSON 2 ... https://www.comsuregroup.com/news/jersey-aml-supervised-business-are-also-1-registered-person-2-regulated-person-3-prescribed-npos-4-schedule-2-business/
• Regulated entities — Jersey Financial Services Commission https://www.jerseyfsc.org/industry/regulated-entities/
• https://www.ogier.com/news-and-insights/insights/registering-for-aml-supervision-under-jerseys-proceeds-of-crime-legislation/
• October 2024 - https://www.jerseyfsc.org/industry/guidance-and-policy/guidelines-on-interpretation-of-article-36-of-the-proceeds-of-crime-jersey-law-1999/
• https://www.jerseyfsc.org/industry/sectors/financial-crime-schedule-2-business/
• VASPS https://www.jerseyfsc.org/news-and-events/list-of-jersey-registered-virtual-asset-service-providers-published/