Jersey MLCO Amendments 2026 – Impact on JFSC Outsourcing Policy

Jersey MLCO Amendments 2026 – Impact on JFSC Outsourcing Policy

The Money Laundering (Jersey) Amendment Order 2026 introduces.

• A more risk-based and proportionate approach to the Money Laundering Compliance Officer (MLCO / “compliance officer”) role.
• A key practical benefit is greater flexibility in outsourcing and delegating monitoring activities, including for firms that choose not to appoint an MLCO.

(A SECOND BRIEFING BELOW EXPLAINS THIS MATRIX UPDATE)

1. Outsourcing & Delegation of MLCO Monitoring Functions (Two Scenarios)

SCENARIO A:

Firms that appoint an MLCO

• New Article 7(3A) of the Money Laundering (Jersey) Order explicitly allows the appointed MLCO (who must be at a senior management level) to
• Delegate day-to-day monitoring, testing, and compliance support activities to other parties, whether internal staff, group entities, or external service providers, while retaining overall responsibility and accountability.
• This provides firms with a clear legal basis for outsourcing operational AML/CFT monitoring work.

SCENARIO B:

Firms that do NOT appoint an MLCO

• Some firms (particularly smaller or lower-risk ones) will not need to appoint a dedicated MLCO at all.
• Under the new Article 7(1A), the requirement to appoint does not apply if it is not appropriate having regard to:
• The size of the relevant person’s financial services business; and
• The risk of money laundering associated with that business.
• The decision must be made by reference to a relevant JFSC Code of Practice.

In the absence of an MLCO, the Board takes overall accountability.

• The Board (or those with overall management responsibility) must ensure that monitoring of compliance with Jersey AML enactments and relevant JFSC Codes of Practice still occurs.
• The firm can outsource the day-to-day compliance and monitoring activities to internal or external parties, subject to the JFSC’s Outsourcing Policy.
• In both scenarios (A & B),
• Any outsourcing of material AML/CFT monitoring or compliance functions remains fully subject to the JFSC Outsourcing Policy.
• Firms must:
• Comply with prior notification and “no objection” requirements (via myJFSC) where the outsourcing is material or changes the scope of arrangements.
• Conduct and document a specific risk assessment on the impact of the outsourcing on money laundering, terrorist financing, and proliferation financing risk (particularly where support is provided for monitoring functions).

2. JFSC Guidance & Codes of Practice

• The MLCO’s monitoring obligation (where an MLCO is appointed) now explicitly includes compliance with relevant JFSC Codes of Practice.
• The JFSC is expected to issue updated guidance in Q2/Q3 2026 on risk-based decisions for MLCO appointment and on acceptable outsourcing/delegation models.

3. Notifications & Approvals to the JFSC

• If an MLCO is appointed:
• The role remains a Key Person function. Changes still require JFSC notification and, in most cases, prior “no objection”.
• If no MLCO is appointed:
• No mandatory upfront notification of the exemption decision, but the Board must maintain clear, documented justification (referencing the JFSC Code). The JFSC may review this during supervision.
• Material outsourcing arrangements (in either scenario above) are likely to trigger
• JFSC Outsourcing Policy notification obligations.
• Board notification of any material AML systems and controls failures remains unchanged.

Practical Implications & Recommended Next Steps

• Firms now have greater flexibility: either delegate via an appointed senior MLCO or (for eligible lower-risk firms) have the Board take direct accountability while outsourcing operational monitoring.
• Smaller or lower-risk firms may eliminate the need for a dedicated MLCO and outsource compliance activities with reduced internal overhead.
• All outsourcing decisions must still follow the JFSC Outsourcing Policy and include documented ML/TF/PF risk assessments.

Recommended Actions before 30 June 2026:

1. Review current MLCO arrangements (or lack of) against new Article 7.
2. Assess any planned outsourcing/delegation against the JFSC Outsourcing Policy.
3. Prepare/update Board-level risk assessments and documentation.
4. Monitor the forthcoming JFSC Handbook consultation.

Sources  

• JFSC AML/CFT/CPF Handbook (updated clean version, effective 30/31 May 2026 – contains the quoted paragraphs 66–69):
• https://jerseyfsc.org/media/f2adgchx/updated-handbook-clean-version.pdf

• Money Laundering (Jersey) Amendment Order 2026 (full enacted text): https://www.jerseylaw.je/laws/enacted/Pages/RO-077-2026.aspx
• JFSC Outsourcing Policy (full policy document): https://www.jerseyfsc.org/industry/guidance-and-policy/outsourcing-policy/
• JFSC Quarterly Update – Q2 2026 (confirms follow-on Handbook consultation): https://www.jerseyfsc.org/news-and-events/jfsc-quarterly-update-q2-2026/
• Government of Jersey – MLCO Role Consultation Page (background): https://www.gov.je/Government/Consultations/pages/moneylaunderingcomplianceofficeramendments.aspx
• Money Laundering (Jersey) Amendment Order 2026 (full text of the enacted law): https://www.jerseylaw.je/laws/enacted/Pages/RO-077-2026.aspx
• Government of Jersey – MLCO Role Amendments Consultation Page (background and proposals): https://www.gov.je/Government/Consultations/pages/moneylaunderingcomplianceofficeramendments.aspx
• JFSC Quarterly Update – Q2 2026 (confirms follow-on consultation on Handbook/Codes): https://www.jerseyfsc.org/news-and-events/jfsc-quarterly-update-q2-2026/
• JFSC Outsourcing Policy (main page): https://www.jerseyfsc.org/industry/guidance-and-policy/outsourcing-policy/
• JFSC Outsourcing Policy (PDF – full document): https://www.jerseyfsc.org/media/7331/pol-outsourcing-policy.pdf
• JFSC AML/CFT/CPF Handbooks (current version and archive): https://www.jerseyfsc.org/industry/financial-crime/amlcftcpf-handbooks/
• JFSC Codes of Practice (relevant to MLCO monitoring obligations): https://www.jerseyfsc.org/industry/codes-of-practice/

Read more

All change for MLCOs in Jersey after the Money Laundering (Jersey) Amendment Order 2026.

The Money Laundering (Jersey) Amendment Order 2026 (made 17 April 2026) introduces a more proportionate, risk-based framework for the Money Laundering Compliance Officer (MLCO / “compliance officer”) role.

• The Money Laundering (Jersey) Amendment Order 2026 (made 17 April 2026) amends the Money Laundering (Jersey) Order 2008 (MLJO).
• The changes to the MLCO role (referred to as “compliance officer” in the legislation) aim to make requirements more proportionate and risk-based, while keeping Jersey aligned with FATF standards.
• The MLCO amendments are in Article 3 of the Order (amending Article 7 of the MLJO) and come into force on 30 June 2026. (Other parts of the Order start on 31 October 2026.)

Key Changes (effective 30 June 2026):

• Appointment is now risk-based, not automatic
• Firms are no longer required to appoint an MLCO if it is not appropriate, having regard to the size of the business and its money laundering risk.
• This decision must be made by reference to the relevant JFSC Code of Practice.
• Senior management requirement (if appointed)
• The MLCO must be appointed at a senior management level and have timely access to all necessary records.
• Monitoring responsibilities clarified and made more flexible
• The MLCO remains responsible for monitoring compliance with Jersey AML laws and JFSC Codes of Practice.
• However, they may now delegate day-to-day monitoring to others while retaining overall accountability.

Overall Impact

• Smaller or lower-risk firms gain meaningful flexibility and potential cost savings.
• Larger or higher-risk firms benefit from clearer expectations around seniority and oversight.
• The changes enhance proportionality while maintaining robust AML controls and FATF alignment.

What should you do

• Firms should review their current arrangements (and the forthcoming updated JFSC Codes) and document any risk-based decisions before 30 June 2026.

Key changes to the MLCO role (new Article 7 of the MLJO)

Here is what the law now says:

• Appointment is no longer automatically mandatory for every business
  • The size of the relevant person’s financial services business; and
  • The risk of money laundering associated with that business.”
  • → In practice, smaller or lower-risk businesses may now decide they do not need a dedicated MLCO (this is the big proportionality win the government consulted on).
• New Article 7(1A): “The requirement to make an appointment under paragraph (1) applies unless the appointment of a compliance officer is not appropriate, having regard to –
• New Article 7(1B): The business must decide what is “appropriate” by referring to a relevant Code of Practice issued by the JFSC under the Proceeds of Crime (Supervisory Bodies) Law.
• If you do appoint an MLCO, the person must be at a senior management level
  • (a) At the senior management level in the business; and
  • (b) Have timely access to all records (including those kept under Article 19) needed to do the job.
• New Article 7(2A): The individual appointed must be:
• Core responsibility (monitoring)
• New Article 7(3): “The compliance officer must monitor whether the enactments in Jersey relating to money laundering and any relevant Code of Practice are being complied with in the conduct of the relevant person’s financial services business.”
• You can delegate day-to-day monitoring
• New Article 7(3A): “A compliance officer may fulfil their responsibilities under paragraph (3) by using another person to support them in, or to carry out, the monitoring required under that paragraph.”
• (This separates overall responsibility, which stays with the senior MLCO, from the function of day-to-day monitoring, giving firms more flexibility.)

Other related changes that affect the MLCO’s work

• The MLCO must now explicitly monitor compliance with the JFSC Codes of Practice (not just the law).

Summary – What does this mean in practice for Jersey firms?

What did not change (or was not included in the final Order)

• The earlier public consultation (Jan–Mar 2026) also discussed allowing corporate (legal person) MLCOs and removing the “natural person only” rule.
• Those proposals were not included in the final enacted Order; the law still refers to “the individual appointed as compliance officer”, so the MLCO must still be a natural person.
• If your firm is small or low-risk, you will need to document (by reference to the JFSC Code) why you do not need an MLCO. Larger or higher-risk firms will still appoint one, but the role is now clearer, more senior, and more delegable.

Sources

The full text of the Amendment Order is here: https://www.jerseylaw.je/laws/enacted/Pages/RO-077-2026.aspx (the extract above is taken directly from it).