JFSC Q4 2024 Registry Supervision Inspection findings, Best Practice and JFSC 2025 TCSP plans

The JFSC feedback paper:-

• Provide examples of good practices identified during the inspections and face-to-face interviews in Q4 2024. 
• Encourages boards, senior management, and owner-operators to consider the findings and conclusions in this report.

Read the JFSC Registry Supervision Inspection Programme Q4 2024 feedback paper.=

• https://www.jerseyfsc.org/media/8148/registry-supervision-inspection-programme-q4-2024.pdf

FINDINGS, BEST PRACTICE AND JFSC PLANS FOR TCSP IN 2025 ARE SUMMARIES BELOW

Overall, the JFSC says its findings show that there are no systemic issues of concern, and most discrepancies are minor

JFSC FINDINGS IDENTIFIED

1. Associated parties’ details not kept up to date  
1. Registry examination officers reviewed and authenticated details of 10,663 associated parties (individuals and corporates).
2. The associated parties encompass 17,180 roles, comprising beneficial owners, controllers, members, directors, and other significant persons.  
2. Difficulties associated with recording joint ownership in respect of members 
3. Lack of understanding of the three-tier test, leading to errors and omissions of beneficial owners and controllers 
4. Failure to disclose individuals controlling a corporate trustee if THE JFSC does not regulate them 
5. Structure charts that do not clearly outline the ownership structure or provide sufficient details about the individuals or entities with significant ownership interests and control 
6. Inadequate identification of executors in the situation where a beneficial owner, controller or significant person is deceased 
7. Statutory registers containing inaccurate or outdated information 

JFSC GOOD PRACTICE IDENTIFIED

1. Entities who keep up-to-date due diligence documentation with the registers tend to file the correct identification data 
2. Entities who are more proactive in updating their registers also maintain accurate data in the JFSC Registry’s records 
3. Developing a comprehensive pre-inspection readiness plan to ensure that entities are well-prepared, reducing the risk of oversights and streamlining the inspection process 
4. Trust company service providers (TCSPs) that maintain comprehensive documentation of trust structures, ownership, and control information tend to have fewer findings 
5. The myParties feature in myRegistry should be used, as this enables users to submit more accurate information 

JFSC AND RISK

1. During inspection visits, there were difficulties associated with authenticating members who held shares of less than 10%. They were recorded correctly; however, the TCSP did not hold CDD in relation to those members.
2. One of the requirements under the DPI Law is that a relevant entity must verify within its annual confirmation statement the name and address of each member who holds 1% or more (in nominal value or number, as applicable) of all the issued shares of a class. It is within THE JFSC's remit to require the relevant entity to authenticate those details in any manner THE JFSC reasonably determine.
3. The JFSC says it is generally accepted that individuals with 25% or less shareholding, voting or appointment rights are unlikely to have significant influence or control over an entity.
   1. To align the Law’s 1% or more membership authentication threshold with that set out in THE JFSC AML/CFT/CPF Handbook, as well as global norms set by the Financial Action Task Force, Registry Supervision will not require authentication of information or documents provided to THE JFSC for members of a relevant entity who hold 25% or less (in nominal value or number, as applicable) of all the issued shares of a class.
4. The JFSC, however, says this exemption will not apply where the relevant entity is considered to carry an associated HEIGHTENED RISK. The JFSC says HEIGHTENED RISK indicators may include (but are not limited to):
   1. › The relevant entity being connected to a HIGH-RISK JURISDICTION
      1. HIGH-RISK JURISDICTION means (as per 6.2.2 AML handbook):- The risk that a business relationship is tainted by funds that are the proceeds of criminal conduct or instrumentalities, or are used to finance terrorism or the financing of proliferation, is increased where the business relationship or one-off transaction is with a person or entity connected with:
         1. › An enhanced risk state (see Appendix D1 of this Handbook). Currently, March 2025 – Iran, the Democratic People’s Republic of Korea, and Myanmar (Burma)
            1. https://www.jerseyfsc.org/industry/financial-crime/amlcftcpf-handbooks/appendix-d1-countries-and-territories-for-which-a-fatf-call-for-action-applies/
         2. › a sanctioned country or territory (see Appendix D2 of this Handbook, sources 6 and 12 therein);
            1. This means, at any time, a country or territory which is itself, or whose government (or equivalent) is, the subject of any sanctions broadly prohibiting dealings with such government (or equivalent), country or territory, including trade sanctions, arms embargoes and other trade restrictions in force in Jersey (refer to Sources 6 and 12 of Appendix D2 of this Handbook for a current list of sanctioned countries and territories).

1. 1. 1. 1. 1. 1. 6 = a Jersey-sanctioned country or territory
               2. 12 = Jersey Arms embargo, trade sanctions and other trade restrictions

3. › A sanctioned “designated” person (Means a person or entity listed on the sanctions designations lists under the Jersey sanctions regime)

1. 1. 1. 1. 1. 1. When assessing country risk for AML/CFT/CPF purposes, in addition to considering the features of a customer, it will be relevant to

1. 1. 1. 1. 1. Take account of the number of occasions that a particular country, territory, or area is listed for different reasons (3.3.4.2)
   2. › Beneficial ownership and/or control, or any of the relevant minority shareholders, is/are associated or connected to a HIGH-RISK JURISDICTION
   3. › Any PEP or PEP connections as part of the structure
   4. › The activity of the relevant entity is sensitive and captured in either table of THE JFSC SOUND BUSINESS PRACTICE POLICY
   5. › Credible intelligence THE JFSC receive from a variety of sources indicates that the relevant entity is exposed to other high-risks

JFSC INSPECTION PROGRAMME FOR 2025 FOR TCSP

1. The JFSC will select entities for inspection which are proportionate with the size of the TSCP 
2. Registry Supervision inspections and regulatory examination visits will not be held together 
3. Registry Supervision criteria during 2025 will continue concentrating on high-risk indicators and politically exposed persons. 

SOURCE

https://www.jerseyfsc.org/news-and-events/read-our-q4-2024-registry-supervision-inspection-programme-feedback/

https://www.jerseyfsc.org/media/8148/registry-supervision-inspection-programme-q4-2024.pdf