JFSC guidance on civil financial penalties – time to review in light of consultation on increases in fines

The JFSC CIVIL PENALTIES WILL BE CHANGING SOON

• Following the Minister for External Relations and Financial Services announcement of their intention to consult on potential changes to the civil financial penalties regime, under the Financial Services Commission (Jersey) Law 1998, the JFSC stated on 25 November:-
• To ensure fairness for parties currently undergoing a sanction process where civil financial penalties are being considered, the JFSC will pause progressing these cases until there is clarity on any proposed changes and
• The JFSC will also consult on updates to our published methodology, reflecting our experience of applying the current approach over the past three years.
• https://www.jerseyfsc.org/news-and-events/civil-financial-penalties-regime-consultation-and-interim-approach/
• Following this JFSC update, the Jersey government issued its consultation  
• The Jersey government wants your views on proposed changes to the maximum penalties that may be imposed on a registered person in Jersey under a Financial Services Commission (Financial Penalties) (Jersey) Order 2015.
• SEE HERE
• https://www.comsuregroup.com/news/the-jersey-governments-civil-financial-penalties-regime-consultation-is-open/

JFSC HAS ISSUED GUIDANCE

The JFSC has issued guidance on civil financial penalties, which cover both registered persons (legal entities) and natural persons (individuals), setting out how and when it exercises its authority to impose these sanctions.

Civil Fines on Registered Persons (Legal Entities)

• Guidance Name: Civil Financial Penalties on Registered Persons – Methodology for Determining the Amount
• Issued: 10 September 2018; Last revised: 12 February 2025
• Applicability: Legal entities regulated by JFSC (banks, fund services, trust companies, MSBs, etc.)
• Powers Based On: Article 21B of the Financial Services Commission (Jersey) Law 1998
• Key Elements of the Methodology:
1. Penalty Bands (1–4) define maximum potential fines as a percentage of average annual turnover (4–8%).
2. A 12-step calculation to determine the exact penalty, examining factors such as seriousness, knowledge, remediation efforts, aggravating/mitigating circumstances, ill-got gains, consistency, proportionality, and early settlement discounts.
3. An appeal right exists under Article 21F of the Law via the Royal Court.

🔗 Read the full guidance here: Civil Financial Penalties on Registered Persons [jerseyfsc.org] https://www.jerseyfsc.org/industry/guidance-and-policy/civil-financial-penalties-on-registered-persons/

👤 Civil Fines on Natural Persons (Individuals)

• Guidance Name: Civil Financial Penalties on Natural Persons – Methodology for Determining the Amount
• Last revised: 12 February 2025
• Applicability: “Principal Persons” – directors, controllers, senior managers, or individuals involved with contraventions of AML/CFT/CPF Codes with knowledge, consent, or negligence. [jerseyfsc.org]
• Content: Specifies calculation methods, similar to the model used for registered persons—but with individual financial circumstances considered. Introduced following the 2018 law update allowing penalties to target individuals directly.  

🔗 Access the methodology here: Civil Financial Penalties on Natural Persons  https://www.jerseyfsc.org/industry/guidance-and-policy/civil-financial-penalties-on-natural-persons/

Context & Enforcement Approach

• Broader enforcement framework:
• Complemented by the JFSC’s Our Approach to Enforcement note, last revised 13 February 2025, which outlines the overall enforcement philosophy and context for using civil penalties. [jerseyfsc.org]
• Scope Update History:
• The power to impose fines on individuals was established in 2018 and applied from that point onward.

To Access Guidance and sources

• https://www.jerseyfsc.org/industry/guidance-and-policy/civil-financial-penalties-on-registered-persons/
• https://www.bakerandpartners.com/insights/financial-penalties-what-is-my-risk-exposure/
• https://www.jerseyfsc.org/industry/guidance-and-policy/our-approach-to-enforcement/
• https://www.comsuregroup.com/news/the-jersey-governments-civil-financial-penalties-regime-consultation-is-open/