JFSC update the JCOA on the regulator’s strategic direction, examinations, and supervisory priorities

The JCOA held a compliance-focused workshop yesterday at the Royal Yacht, featuring senior JFSC supervisory leaders delivering updates on the regulator’s strategic direction, examinations, and supervisory priorities.

Disclaimer / Note to Readers

• The following notes were taken by the Comsure team and are provided on a best-efforts basis. While we aim for accuracy, these are not official transcripts.
• If you have any questions about the content or require clarification on what was said, we strongly recommend contacting the JFCS directly.
• We also welcome any feedback or corrections from readers. If inaccuracies are identified, the notes will be updated accordingly.

Executive Summary

• On 25 March 2026, the Jersey Compliance Officers Association (JCOA) held a compliance-focused workshop at the Royal Yacht, featuring senior leaders from the Jersey Financial Services Commission (JFSC).
• The session provided valuable updates on the regulator’s strategic direction, evolving supervisory approach, examination programme, and key compliance trends.

Key Highlights:

• Five-Year Strategy Launch:
• The JFSC will officially launch its 2026–2030 Strategic Framework on 31 March 2026.
• This strategy supports Jersey’s financial services sector amid geopolitical and technological changes by delivering proportionate, risk-based regulation, high service standards, and sustained protection of the Island’s reputation.
• It will be implemented through rolling two-year business plans.
• Supervision and Leadership Changes:
• The JFSC has restructured its leadership with focused director roles, including dedicated oversight for digital assets, funds & trusts, examinations, and prudential supervision.
• The 2026 supervisory approach will become more agile, data-driven, and transparent, with greater use of technology (including AI exploration) and enhanced engagement with industry.
• Examination Improvements:
• Industry feedback on the JFSC’s examination process has been largely positive, noting a shift toward a more collaborative, risk-focused, and less disruptive approach.
• Enhancements include better communication, walkthroughs, focused/short-scope exams, portal upgrades, and a new findings rating system.
• A new “light-touch” assurance questionnaire programme is being introduced for lower-risk firms.
• Thematic Priorities:
• A thematic review on targeted sanctions is planned for 2026 using the regulator’s updated tools.
• Work also continues on financial crime themes, with an exemptions thematic scheduled for Q2 2026.
• Financial Crime Compliance Trends:
• Positive progress was noted in Suspicious Activity Reporting (SARs), board oversight, and staff training.
• However, gaps remain in source-of-funds checks, customer risk assessments, documentation accuracy, outdated policies, and consistent decision-making.
• Continued focus on training and robust DMLRO oversight is encouraged, albeit in circumstances where the DMLRO has been involved in SARs.
• Industry Outlook and Engagement:
• From an audience participation (hands up) question, it appeared sentiment across the JCOA sector remains mixed, with low optimism (10%) due to global and local pressures.
• The JFSC emphasised its commitment to providing clarity, supporting sustainable growth, and maintaining a balanced approach that protects Jersey’s reputation while enabling business development.
• Greater flexibility around evolving business models (including outsourced compliance) was acknowledged.

The JFSC encouraged ongoing dialogue with industry and invited feedback on proposed changes. Speakers emphasised the importance of proactive leadership oversight, exam preparation, and active participation in the strategy launch event on 31 March.

MORE DETAILED NOTES

THE JFSC TEAM WAS

THE JFSC TEAM PRESENTED ON

1. RECENT FINANCIAL CRIME FINDINGS AND COMPLIANCE TRENDS
2. THE JFSC STRATEGIC FRAMEWORK AND INDUSTRY OUTLOOK
3. THE JFSCS SUPERVISION STRATEGY AND ORGANIZATIONAL CHANGES
4. THE JFSC EXAMINATIONS PROGRAM AND INDUSTRY FEEDBACK
5. EXAMINATIONS TOOLKIT AND THEMATIC PROGRAM ENHANCEMENTS
6. INDUSTRY Q&A AND PROVIDED AN UPDATE ON REGULATORY COMMITMENTS

KEY TAKEAWAYS

Further to the executive summary, here are some other key takeaways from yesterday's JOIC

• Targeted sanctions visits - In 2026, the JFSC will undertake a thematic visit on “targeted sanctions” using its new approach and regulatory tools
• Five-Year Strategy Launch on March 31 to support Jersey’s financial services amid geopolitical and tech changes.
• Mixed Industry Sentiment with 10% optimism; the regulator aims to provide clarity in an uncertain environment.
• Leadership Restructure includes focused director roles and enhanced support for digital assets, supervision, and regulatory maintenance.
• Improved Examination Approach focuses on risk with positive feedback for communication and constructive processes.
• Compliance Trends Show Improvements in financial crime reporting, but gaps in training and documentation remain.
• Ongoing Industry Engagement emphasised discussing evolving models and ensuring proactive regulatory collaboration.

CLARA AND JOANNA SPOKE ABOUT RECENT FINANCIAL CRIME FINDINGS AND COMPLIANCE TRENDS

JFSC reports improving compliance in key financial crime areas but continues to identify gaps requiring targeted supervision.

• 2025 Financial Crime Examination Findings Highlighted Common Issues such as source of funds, customer risk assessments, and exemptions  
• A thematic on exemptions scheduled for Q2 will provide updated insights and comparisons
• Annual feedback paper review underway, with publication expected next quarter
• Positive Trends in Suspicious Activity Reporting (SARs) Compliance with fewer findings compared to the 2019 thematic report  
• Four out of nine firms had no findings, indicating overall good compliance levels
• Improvements noted in board oversight, structured SAR reporting, and staff training demonstrated through interviews
• Remaining issues include outdated policies, unclear documentation, and inconsistent reporting and decision-making
• Challenges Noted in MLRO Role and Reporting Processes (51:25)
• Discussions revealed a pragmatic approach to MLRO deputies’ monitoring based on actual activity
• Emphasis on ensuring MLROs maintain independence and effective oversight despite structural differences across firms
• Need for Continued Focus on Training and Documentation Accuracy to close remaining gaps
• Some firms still reference obsolete documents or have unclear policies impacting compliance quality
• Ongoing education and process improvements are critical to sustain a positive compliance trajectory

DAVID SPOKE ABOUT THE JFSC STRATEGIC FRAMEWORK AND INDUSTRY OUTLOOK

The JFSC is launching a new five-year strategy to support Jersey’s growth in financial services amid geopolitical and technological changes.

• Launch of Five-Year Strategic Framework aligns with the government’s Time to Win competitiveness review to support sustainable growth  
• Strategy emphasises trusted regulation balancing growth and protecting Jersey’s reputation against financial crime
• Will be delivered through two-year rolling business plans, enabling gradual progress and cultural shifts in regulatory approach
• Key pillars include excellent service, risk-based proportional supervision, and maintaining global standards amid AI and market disruption
• Strategy launch scheduled for March 31st with opportunities for industry engagement and Q&A
• Industry Sentiment Mixed with Uncertainty reflects global challenges and local competitive pressures  
• Industry temperature check showed low optimism (10%), moderate uncertainty, and significant haze about prospects
• This uncertainty influenced the regulator’s focus on providing support and clarity for businesses navigating change
• The regulator aims to respond with agility to evolving business and geopolitical landscapes
• Regulator’s Role to Enable Growth and Protect Reputation through a balanced supervisory approach  
• Commitment to risk-based, proportionate supervision that supports business development without compromising standards
• Focus on being part of the Jersey ecosystem, supporting government competitiveness goals while safeguarding against financial crime
• Seven key initiatives include policy agility, supervision changes, improved service standards, and embedding cultural change internally

DAVIS ALSO UPDATED THE AUDIENCE ON THE JFSCS SUPERVISION STRATEGY AND ORGANIZATIONAL CHANGES

JFSC supervision is evolving toward a more agile, risk-based model that focuses on operational improvements and enhanced stakeholder engagement.

• Leadership Restructure to Support Strategy Delivery with focused director roles and a new digital assets team  
• Lee Sabiston now oversees funds, trusts, heightened risk, and digital assets supervision, prioritising jurisdictional opportunities
• Jason leads examinations and supervisory toolkit development, focusing on risk-based, proportionate supervision and industry engagement
• Sam Davison heads authorisations and regulatory maintenance, expanding concierge services in partnership with Jersey Finance
• A vacant director role will focus on banking, investment, and prudential oversight, including Basel III implementation

• Supervision Business Plan 2026 Refreshes Approach to be data-driven, agile, and transparent, supporting competitiveness
• Objectives include increasing supervisory effectiveness with flexible toolkits and better intelligence processing
• Emphasis on risk mitigation models, working with industry to prevent issues rather than detect them
• Engagement will improve with entity senior leaders, boards, trade bodies, and other agencies to enhance information sharing
• Exploring AI models to help firms self-assess compliance against regulatory standards
• Balanced Focus on Financial Crime, Conduct, and Prudential Risk over the next two years  
• Financial crime remains a strong focus with ongoing examinations and thematic work
• Prudential team will support banking regulation, business model analysis, and Basel III capital standards introduction
• Conduct strategy development targeting banking and investment sectors, coupled with consumer education on financial literacy
• Cybersecurity risk assessment theme planned, collaborating with Jersey Cyber Security Centre
• Operational Improvements to Support Growth and Service Quality, including process automation and portal enhancements  
• New firms hub creation to facilitate business onboarding and support competitiveness
• Efforts underway to improve straight-through processing for low-risk cases and adherence to published SLAs
• Enhancements to digital experience expected to speed interactions and ease doing business
• Continued support for government initiatives like the Moneyval Action Plan and reliance frameworks

CLARA AND JOANNA SPOKE ABOUT UPDATING THE AUDIENCE ON THE JFSC EXAMINATIONS PROGRAM AND INDUSTRY FEEDBACK

Outreach feedback

• GREEN = GOOD
• YELLOW = IMPROVEMENT NEEDED

JFSC examinations are becoming more collaborative, pragmatic, and risk-focused, with efforts to improve communication and reduce disruption.

• Positive Industry Feedback on Examination Approach highlights a more constructive, risk-based, and informative process  
• Examinations perceived as less inquisitorial and more helpful, allowing firms to get a health check and improve
• Effective communication praised, including advanced scheduling and end-of-day meetings during onsite exams
• Plans to add interview preparation content online to reduce anxiety, especially for junior staff
• Transparency and professionalism of examination teams are consistently noted as strengths
• MyJFSC Portal Improvements Underway to address document upload frustrations, with testing phase starting and rollout planned for Q2  
• New portal features will enable firms to view uploaded documents and communicate directly with examiners
• Introduction of the findings rating system in reports helps firms prioritise remediation and engage boards effectively
• Efficiency Gains Through Walkthroughs and Focused Exams to reduce back-and-forth and minimise exam disruption  
• Advance walkthroughs of systems/processes now offered, cutting down detailed onsite questioning
• Introduction of focused exams with narrow scope and short onsite visits (half day max) planned, trialling targeted financial sanctions theme
• Outcomes range from clean reports to escalations for deeper exams if concerns arise
• Annual Feedback Paper Under Review with Aim to Enhance Usability, and ongoing quick wins publications planned  
• Feedback paper to be less dense and more digestible, with industry input invited for improvements
• Quick wins papers highlight recurring issues and easy fixes to prevent repeated findings in exams

JASON - EXAMINATIONS TOOLKIT AND THEMATIC PROGRAM ENHANCEMENTS

JFSC is expanding its supervisory toolkit with more questionnaires, structured thematic cycles, and new outreach stages to improve risk focus and transparency.

• Introduction of Light-Touch Assurance Questionnaires targeting non-relationship managed firms with less daily oversight
• Short, data-driven questionnaires will assess compliance on specific themes outside full exams
• Responses scored and colour-coded (green/yellow/red) to guide follow-up actions proportionately
• Supports earlier detection of weaknesses, promotes firm self-assessment, and reduces unnecessary onsite exams
• Collaboration with data teams to minimise duplication of data requests
• Enhanced Use of Questionnaires in Thematic Examinations to standardise and deepen industry engagement
• Questionnaires will widen participation beyond onsite exam firms and inform entity selection for detailed exams
• Richer qualitative data will improve feedback quality and risk analysis
• Proposed New Upfront Outreach Stage in Thematic Cycle to clarify scope and expectations before examinations begin  
• Firms get at least six months to prepare frameworks in response to clear guidance on what good looks like
• Shift from retrospective to real-time compliance assessment aligned with the latest rules and guidance
• Industry feedback welcomed on the format and content of this new outreach phase
• Standardised and Transparent Thematic Cycle planned to improve predictability and resource allocation  
• Cycle phases include upfront outreach, questionnaire issuance, analysis, onsite activity, and feedback publication
• Quarterly updates on examination cycle progress will aid planning and coordination for both the regulator and firms
• These changes aim to strengthen thematic program credibility and focus on the highest risks consistent with strategic priorities

DAVID TOOK  INDUSTRY Q&A AND PROVIDED AN UPDATE ON REGULATORY COMMITMENTS

JFSC addressed industry concerns on supervision intensity, handbook updates, and evolving business models with clear commitments and ongoing dialogue.

• Supervision Intensity Expected to Decrease Gradually with Improved Compliance through risk-based, targeted approaches  
• Shift to questionnaires and focused exams aims to reduce broad, resource-heavy testing while maintaining effectiveness
• Full scope financial crime exams remain necessary but will be used more selectively based on risk signals
• Industry urged to engage proactively with presentations and outreach to better prepare for exams
• Commitment to Annual Handbook Updates to provide predictability and reduce fragmentation of regulatory changes
• No plans for multiple ad hoc updates; industry will receive early notice of scheduled changes
• Handbook will stay current to reflect digital assets and emerging regulatory needs while responding to industry requests
• JFSC Open to Flexible Business Models, Including Outsourced Compliance Functions 
• Will adapt supervisory visits to include remote interviews and accountability for offshore compliance teams
• Recognises evolving industry practices and the importance of maintaining oversight despite geographic shifts
• Forward-Looking Supervisory Model Will Coexist with Enforcement Based on Intelligence 
• Prevention focus does not eliminate enforcement; reactive exams and investigations will continue where risks arise
• Forward-looking exams aim to reduce legacy issues and improve onboarding for key personnel roles
• JFSC offers to engage further with firms on retrospective enforcement issues to provide clarity
• JFSC Encourages Industry Dialogue and Feedback on proposed changes and ongoing challenges (Throughout Q&A)
• Presenters invited participants to discuss concerns directly after the meeting
• Emphasis on a partnership approach to balancing supervision, compliance, and business growth in Jersey’s evolving environment

JFSC CLOSING MESSAGES

David

• Participate in the official launch of the JFSC strategy and business plans on March 31, 10 am  
• Engage the industry on the JFSC strategic framework and business plans over the next five years
• Continue leadership oversight, ensuring alignment of strategic pillars with JFSC and Jersey government competitiveness agenda  

Jason

• Lead implementation of supervisory business plan focusing on risk-based, agile, and proportionate approach  

Jo and Clara

• Continue the examinations outreach program to gather feedback and improve the exam experience  

Disclaimer / Note to Readers

• The following notes were taken by the Comsure team and are provided on a best-efforts basis. While we aim for accuracy, these are not official transcripts.
• If you have any questions about the content or require clarification on what was said, we strongly recommend contacting the JFCS directly.
• We also welcome any feedback or corrections from readers. If inaccuracies are identified, the notes will be updated accordingly.