Jersey trust company and fund services businesses demonstrate effective oversight and sound risk management

JFSC worked with 11 trust company and fund services businesses on discovery visits to inform prudential work and help to understand how firms in this sector oversee the sustainability of their business models.

Overall, they observed positive practices that support effective oversight and sound risk management.

Read our discovery visit feedback on financial resilience and governance for details and key themes for reflection.

Their aim

These visits were designed to help understand:

• How boards and directors oversee financial planning and resilience

• The opportunities and challenges for non-bank business models in Jersey

• How firms assess liquidity and comply with adjusted net liquid asset requirements

• How boards consider risks from adverse scenarios in business planning and assess resilience under market stress conditions

Key themes for reflection

JFSC have grouped our observations into five themes, with examples of good practice for each:

• Liquidity management and adjusted net liquid assets

• Assurance and information flow to boards

• Governance and board oversight

• Concentration risk

• Financial resilience and forward-looking analysis

Next step

JFSC encourage boards and senior management to review this feedback paper and reflect on whether the themes are relevant to their firm’s own arrangements.

As part of future supervisory engagement, they will:

• Embed the themes outlined in this feedback into their day-to-day supervisory activity, proportionate to a firm’s business model and risk profile

• Continue engaging with industry bodies to broaden their understanding and support shared learning across the sector

• Engage with external auditors and advisors to explore how existing assurance work can better support firms’ own assessment of financial resilience without adding unnecessary cost

• Offer targeted workshops and thematic discussions to support, where relevant

SOURCE:

Jersey trust company and fund services businesses demonstrate effective oversight and sound risk management — Jersey Financial Services Commission