Briefing on the Jersey Repeal of the Control of Borrowing Framework Consultation Feedback Paper

Overview

The Consultation Feedback Paper, published by the Government of Jersey in November 2025, summarises responses to the consultation on repealing the Control of Borrowing (Jersey) Law 1947 (COBL) and the Control of Borrowing (Jersey) Order 1958 (COBO), collectively known as the COB Framework.

This 78-year-old framework, designed for economic stability and capital oversight, is outdated, overlapping with modern regulations, and causes delays, costs, and competitiveness issues.

The reforms propose replacement with a proportionate, internationally aligned system (e.g., IOSCO standards), embedding refusal/oversight powers in "Product Laws" (e.g., Collective Investment Funds (Jersey) Law 1988, Alternative Investment Funds (Jersey) Regulations 2012), adding targeted provisions, and ensuring smooth transitions to empower the Jersey Financial Services Commission (JFSC) while reducing business friction.

Consultation Process

The consultation ran from 11 July to 30 September 2025. It included a COB Working Group (Government, JFSC, industry via Jersey Finance Limited - JFL), three public drop-in sessions, proactive outreach to industry bodies, and 12 formal submissions from industry, regulated businesses, and advisers. The paper, published by the Government, incorporates JFSC views, reflecting collaboration.

Overall Feedback

Responses consistently supported a "carefully managed transition" and repeal, favouring modernisation for innovation, faster market access, and cost savings. A phased approach was emphasised to avoid gaps, uncertainty, or risks, particularly for legacies, digital assets, and investors. Reforms align with Jersey's competitive goals, with benefits expected to outweigh transition costs.

Key Themes, Concerns, and Responses

Structured around themes (A-M), with Government/JFSC responses:

• Competitiveness: Delays/costs hinder Jersey; repeal overdue. Response: Modernise to eliminate friction, align internationally, and ensure no vacuum via power mapping.
• Regulatory Coverage: Need clear replacements. Response: Embed in Regulatory/Product Laws; re-express conditions as licences under Financial Services (Jersey) Law 1998 (FSL)/Sound Business Law (SBL).
• Legacy Conditions: Handling COBO Consents/Conditions (e.g., ownership). Response: Transitional novation, guidance; long periods to minimise costs.
• Jersey Private Funds (JPFs)/Legacy Funds: Maintain simplicity, perimeter. Response: New mirroring provisions/law; seamless migration, AML clarification, guidance.
• Digital Products: Proportionate oversight via Trust and Company Business (TCB) Code; avoid burden. Response: Risk-based amendments; Digital Assets Working Group (DAWG) collaboration; future Digital Assets Law if needed.
• Prospectus Oversight: Repeal but protect locals from foreign issuers. Response: New notification/approval framework; coherence with existing laws, guidance.
• Sound Business Policy (SBP): Simplify but retain value. Response: Build on updates (effective 1 November 2025); feedback sessions, efficiency review.
• Refusal/Oversight Powers: Embed in Product Laws; ensure objectivity. Response: Objective criteria only; Policy Statement with examples, appeals to the Royal Court.
• Other Areas (e.g., Unit Trusts, Registrar, Exemptions): Gaps in oversight/transitions. Response: Remove COBO for trusts; add the registrar to FSL if needed; preserve exemptions and consequential amendments.

Next Steps and Conclusions

• Coordinate drafting with Law Draftsman's Office (LDO), JFSC, JFL, industry;
• Address digital via DAWG; develop guidance.
• Phased implementation with commencement orders.  

THESE Reforms

• Eliminate duplication, enhance efficiency/innovation, protect stakeholders, and bolster Jersey's finance reputation through careful planning.

Sources

• https://www.gov.je/SiteCollectionDocuments/Industry%20and%20finance/Consultation%20Feedback%20Paper%20Repeal%20of%20COBO%20FINAL.pdf
• https://www.gov.je/SiteCollectionDocuments/Industry%20and%20finance/Consultation%20Feedback%20Paper%20Repeal%20of%20COBO%20FINAL.pdf
• https://www.gov.je/Government/Consultations/pages/coborepeal.aspx