Channel Islands funds update: April 2025

In our latest Channel Islands funds update, we round up recent legal and regulatory developments in Jersey and Guernsey.

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Pan-island developments

Guernsey investment statistics

The GFSC has published its investments statistics for the fourth quarter of 2024.

The final quarter of 2024 was marked by an increase of £1.3 billion (+0.5%) in the total net asset value (NAV) of funds compared to the previous quarter, taking the total NAV to £290.1 billion. This has resulted in an overall increase in NAV of £0.1 billion (+0.1%) over the past year.

• The Guernsey domiciled open-ended sector continued to expand, with a quarterly increase of £1.8 billion (+3.7%), bringing the total NAV to £51.8 billion. This has been an overall increase in NAV in the past year of £1.8 billion (+3.8%).
• Meanwhile, the Guernsey closed-ended funds sector saw a smaller decrease compared to the previous quarter of £0.5 billion (-0.2%), resulting in a total NAV of £238.3 billion. The total decrease in NAV in the past year was £1.8 billion (-0.8%).
• Within these totals, Guernsey green funds collectively held £4.9 billion NAV at the end of the quarter.

Read the statistics in full:

Fourth Quarter 2024 Investment Statistics — GFSC

Jersey investment statistics

Jersey's investment statistics for the fourth quarter of 2024 will be imminently available. 

Jersey Developments

Limited Partnership Law amendments

In our January 2025 update we reported on draft legislation to make minor amendments to the Limited Partnership (Jersey) Law 1994. The amended legislation clarifies that the cash flow insolvency of a general partner will no longer trigger the automatic winding up of a limited partnership. The changes came into effect on 21 February 2025. 

Read the Limited Partnerships (Jersey) Amendment Law 2025.

JFSC consultation on enhancements to criminal background checks

The Jersey Financial Services Commission (JFSC) has consulted with industry as to how it may enhance its background checks on individuals proposing to hold principal or key person (PP/KPs) positions in Schedule 2 businesses.

The consultation period ended on 26 March. Feedback on the consultation is expected in due course.

View the consultation paper on enhancements to criminal background checks.

Notification of appointment and cessation dates for principal and key persons

The JFSC has issued guidance for regulated businesses in Jersey to remind them of their obligation to notify the Regulatory Maintenance team of the appointment and cessation dates for principal persons (PPs) / key persons (KPs) Individuals in these roles must also update their personal information on myProfile at the start and end of their appointment.

Businesses should contact the JFSC's Regulatory Maintenance team with any questions regarding these processes.

View the JFSC's guidance in full.

Supervisory risk data collection exercise

The JFSC conducted its 2024 supervisory risk data collection exercise in early 2025. Despite some amendments to the data collection exercise (as reported in our October 2024 update), the information requested from businesses remains similar to the information required in previous data collections except for new complaint categories added to the non-Schedule 2 Global Footprint workbook and a new question on client Sound Business Practice Policy activity added to each sector workbook. The data collected will inform the JFSC's approach to risk-based supervision and financial crime examination processes. The findings will also be used to revise the JFSC's risk model and National Risk Assessments.

The deadline for submission was 11 April 2025. Further information can be found in the JFSC's 2024 AML / CFT / CPF and other supervisory risk data industry update.

Director disqualification sanctions

On 27 February 2025, the Government of Jersey enacted legislation to incorporate director disqualification provisions within the island's sanctions regime, reflecting similar changes made to the United Kingdom sanctions regime.

Under the updated legislative framework, it is an offence for individuals who are designated under director disqualification sanctions to act as director or manager of a Jersey company or to participate directly or indirectly in the promotion, formation or management of the company. However, individuals may be able to rely on certain exceptions, such as a general licence issued by the Ministry of External Relations. The general licence authorises activities by a designated person where such activity is undertaken to comply with statutory or regulatory requirements or in connection with the resignation of a disqualified person.

Businesses should review the new disqualification provisions and ensure they remain compliant with the updated legislation.

View the Sanctions and Asset-Freezing (Implementation of External Sanctions – Director Disqualification) (Jersey) Amendment Order 2025.

JFSC letter to security issuers

On 3 March 2025, the JFSC issued a public letter to security issuers involved in initial coin and token offerings under the Control of Borrowing (Jersey) Law 1947 and the Control of Borrowing (Jersey) Order 1958 (COBO).The letter was published in response to an increase in instances of non-compliance with COBO consent conditions.

The letter identifies several instances of non-compliance with consent conditions, such as:

• failures to file audited accounts with the Registrar in accordance with the Companies (Jersey) Law 1991
• failures to obtain prior consent when there are changes to key functionaries
• unauthorised circulation in Jersey of prospectuses of foreign body corporates
• unauthorised issue of securities

The letter highlights that breaches of COBO constitute a criminal offence, breaches of conditioned consents are considered a material occurrence and that the responsibility for compliance with COBO lies with the relevant entity's board.

The guidance further notes that JFSC will focus on conditioned consents as part of its supervision efforts. It is also noted that a breach of COBO may be referred to the HM Attorney General where the breach has contravened the guiding principles of reducing risk to the public.

Read the JFSC's industry update to security issuers in full.

Monterey Jersey Fund Report 2024

Monterey Insight issued its latest report on the Jersey funds industry on 27 January 2025, highlighting significant growth across the industry.

Some of the key findings include that the value of Assets Under Administration increased by 6.1% to the previous year, reaching US$630 billion as of June 2024. It is also reported that a record number of fund vehicles are established in Jersey, with 2,450 funds and sub-funds being serviced in the island.

The report also reflects that Jersey's international connections are strengthening. The number of funds serviced in Jersey for US, Swedish and Swiss fund managers and promoters has grown in the last five years by 56%, 106% and 44% respectively.

The number of private equity and venture capital funds has increased by 9% in comparison to the previous year and account for US$464.1 billion of assets, contributing significantly to the industry's growth. Real estate funds follow with a total US$67 billion of assets and 62% of funds established between June 2023 and June 2024 were private equity or venture capital products. Similarly, the number of private debt fund vehicles has more than tripled in the past five years.

View Jersey Finance's summary of the Monetary Jersey Fund Report 2024.

Registry Supervision inspection programme feedback

The JFSC has released feedback from its Q4 2024 Registry Supervision inspection programme, highlighting good practice and common areas of non-compliance identified during inspections and interviews. The outcomes of the inspection mirror the feedback issued for the first half of the 2024 inspection programme reporting on in our January 2025 update.

The paper highlights the ongoing focus of ensuring the Registry holds accurate and reliable information in relation to entities' beneficial owners, controllers and significant persons.

A number of best practices are reiterated in the report, such as preparing a comprehensive pre-inspection readiness plan and utilising the three-tier test to identify the relevant parties. Parties should also make their submissions via the myParties feature within the JFSC's myRegistry platform.

A small number of inaccuracies are reported but there are no systematic areas of concern. These include updating associated parties' details, recording joint ownership of shares, understanding the three-tier test and maintaining accurate structure charts and statutory registers.

Entities are encouraged to read the JFSC's Q4 2024 Registry Supervision inspection programme feedback in full.

JFSC's 2025 business plan

The JFSC launched its 2025 business plan at an industry event on 11 February 2025.

Key aspects of the plan include a strategic review of the Registry and its services, supporting the Government of Jersey's financial services competitiveness programme, a review of the JFSC's fee structure and the publication of performance against service level agreements. The JFSC encourages industry stakeholders to review the business plan and provide feedback to the JFSC.

Read the 2025 business plan here.

Obliged entity access to information

Our October 2024 update covered certain amendments to the Financial Services (Disclosure and Provision of Information) (Jersey) Law 2020 which introduce an administrative process to assist obliged entities who are conducting customer due diligence (CDD) pursuant to the Money Laundering (Jersey) Order 2008 (the Order). The updates have now been brought into effect, further strengthening the island's compliance with international standards for preventing money laundering and terrorist financing.

Information about beneficial owners and controllers of Jersey entities is collected by the JFSC and recorded on the Obliged Entity Beneficial Owner (OEBO) register which must be kept updated on an ongoing basis and is not publicly available. Since 24 February 2025, certain permitted individuals within obliged entities may access the OEBO register through the JFSC's dedicated portal, myJFSC, if they are conducting CDD pursuant to the Order. Access to the register is strictly controlled and is only provided for the purpose of enabling an obliged entity to meet its obligations under the Order and if the OEBO register is accessed for any other purpose, that entity (or relevant person) will be subject to criminal penalty.

The JFSC has published guidance to support parties that wish to utilise this new administrative tool. The guidance outlines the application process, the lead obliged entity administrator's role and responsibilities, searching capabilities, discrepancy reporting, inspection by the Registry Supervision team, data protection measures and subject access requests.

Read the guidance for accessing the OEBO register in full.

Thematic examination programme on suspicious activity reporting

The JFSC has commenced its thematic examination programme on suspicious activity reporting (SARs) which is one of three themes selected in response to the conclusions of the MONEYVAL report, alongside the themes of conflicts of interest and outsourcing arrangements.

The thematic examination on SARs follows recommendations from the latest MONEYVAL report to:

• continue to monitor and enhance the effectiveness of internal systems and processes of supervised persons for identifying and reporting suspicious activity
• ensure SARs are submitted promptly to the Jersey Financial Intelligence Unit (FIU)

Core areas of focus include reporting knowledge or suspicion, procedures for reporting, the role of the money laundering reporting officer, reporting suspicious activity, disclosure to group companies and networks, FIU consent, tipping off and training.

Phase one and two of the examination closed on 21 March 2025 and 18 April 2025 respectively. Onsite examinations will be held between May 2025 and September 2025 and a feedback paper will be published in winter 2025.

View details of the SAR thematic examination.

Thematic Assessment Visits 

The JFSC also will be conducting Thematic Assessment Visits (TAVs). TAVs will focus on sector-specific issues such as transaction monitoring for fund services business and trust company service providers, virtual asset service providers' compliance and the "travel rule". The JFSC will also be undertaking a TAV to evaluate the practical measures that anti-money laundering service providers have put in place to comply with Section 18 of the AML/CFT/CPF Handbook.

Businesses that are selected for examination will be contacted with further details prior to their examination.

Read the update on 2025 thematic examinations and TAVs.

Guernsey developments

Guernsey receives a positive MONEYVAL evaluation

The Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) confirmed the Bailiwick of Guernsey has a robust AML/CFT legal framework, which was rated as either compliant or largely compliant with all the 40 technical recommendations, and outstanding deficiencies were deemed to be minor.

The result compares favourably to most other jurisdictions and has been welcomed by the Guernsey Financial Services Commission (GFSC), the States of Guernsey and industrywide. Going forward Guernsey will continue to be subject to a regular follow-up review (as opposed to an enhanced follow-up), which is ultimately the aim for all jurisdictions subject to MONEYVAL's evaluation.

Read the full Mutual Evaluation Report or our summary of the key findings.

To read a summary of the recent Jersey MONEYVAL report, see our October 2024 update.

MONEYVAL evaluates members' AML, CFT and CPF measures by assessing compliance with all relevant international standards in the legal, financial and law enforcement sectors and then reviewing the effectiveness of their implementation.

Updates to the AML / CFT / CPF Handbook – Appendix I

The GFSC published an update to Appendix I of the Handbook on Countering Financial Crime (Anti-Money Laundering / Countering the Financing of Terrorism / Countering the Financing of Proliferation of Weapons of Mass Destruction) (the Handbook) on 3 March 2025 to reflect that Nepal and the Lao People's Democratic Republic have been listed by the Financial Action Task Force (FATF) as jurisdictions under increased monitoring. Both jurisdictions were already included under Appendix I of the Handbook due to being listed by other relevant external sources.

Though the FATF has removed the Philippines from its list of jurisdictions under increased monitoring, it remains under Appendix I to the Handbook due to being listed by other relevant external sources.

The clean and tracked version of the Handbook (including Appendix I) can be accessed via the Handbook page, with Appendix I available on the Notices, Instructions & Warnings page.

Read the FATF page on High-Risk and Other Monitored Jurisdictions.

Thematic reviews on client money in the investment and fiduciary sectors

On 13 February 2025 the GFSC published two thematic reports regarding the effectiveness of controls over client money by licensees in the investment and the fiduciary sectors. In both sectors the GFSC was generally satisfied with client money safeguarding arrangements, noting that a range of good practices were observed.

Key findings in the investment sector report include:

• licensees appropriately segregate and reconcile client money and demonstrated a robust control environment to ensure the safety of client money – the GFSC stressed the importance of detailed and accessible policies and procedures embedded within the business as opposed to relying solely on experienced staff
• licensees, particularly those part of multijurisdictional groups in respect of any groupwide policies and procedures, should ensure that all procedures and policies take into account local regulatory requirements
• an adequate level of oversight is needed to reduce the risk of overdrawn client money bank accounts, such as ensuring that there is an appropriate level of communication with their banking providers
• the vast majority of licensees hold client money with "approved banks" pursuant to the Licensees (Conduct of Business) Rules and Guidance, 2021 (the COB Rules). However, some licensees reported holding client money at banks or other institutions that do not meet the approved bank criteria without having received the necessary modification to, or derogation from, the COB Rules to do so. If a licensee wishes to hold client money outside an approved bank, it should submit a request for modification of the COB Rules, which should be appropriately detailed and contain sufficient rationale

The GFSC encourages all firms to consider the contents of the relevant reports, particularly in relation to the areas to consider and the self-assurance questionnaires, when reviewing, updating or revising their policies, procedures and controls.

Thematic reviews published by the GFSC can be found on its legislation and guidance page.

Development of technology and key appointments

As part of its ongoing programme for technological development and to ensure the Bailiwick is appropriately positioned internationally as an attractive hub for business, the GFSC has made the following appointments:

• Conor Osborough has been appointed as Head of the Commission’s Technology Innovation Unit
• Liam Cunningham has been appointed as Head of the Commission’s Technology Supervision Unit
• Nick Herquin has been appointed as Head of International Co-operation and Economic Enhancement

Read more about what these roles will focus on:

Developing Technology and Helping Facilitate Prosperity — GFSC

Consultation paper regarding amendments to the Financial Crime Return Rules

The GFSC initiated a consultation proposing amendments to the Financial Crime Returns Rules 2023 (the FCR Rules) which closed on 17 March 2024. The proposed amendments include:

• "prescribed businesses" under Schedule 5 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 would be required to file an annual financial crime risk return and an annual prescribed business return
• licensees under the Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022 that undertake money services business activity (except those undertaking only currency exchange and/or cheque cashing) or informal money or value transfer services would be required to complete a quarterly financial flows return
• certain clarifications with respect to the requirements applicable to insurance managers, insurers and insurance intermediaries undertaking long term (life) and general (non-life) insurance business and licensed incorporated cell companies with incorporated cells that are also licensed and undertake business which is subject to financial crime supervision (for example incorporated cells with life insurance licences)
• clarifying that licensees under the Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022 that are not subject to financial crime supervision (that is those providing services ancillary to credit and those providing credit only in respect of general insurance premium financing) would not be required to submit a financial crime risk return

The proposed amendments aim to address disparity between the prescribed businesses sector and the financial services sector, where such mandatory filings apply and the changes made to Schedule 5 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 following a consultation conducted by the States of Guernsey’s Policy and Resources Committee last year, which enabled the GFSC to require the filing of periodic returns from prescribed businesses.

Read the proposed amended text of the FCR Rules in clean and tracked changes format.

Thematic review on insurance reserving

On 4 February 2025 the GFSC published its report following a thematic review of the suitability of reserving methodology and practices implemented by licensed general insurers. The rationale for focusing on reserving is that insurance liabilities are foundational to an insurer’s capital position, financial strength and solvency, and therefore it is critical that these are captured and measured as accurately as possible.

For the purposes of this thematic review, the GFSC assessed staffing and resources, policies and procedures, oversight and controls, and reporting to boards and / or committees (as each relates to reserves). However, a technical review of the reserving methodology, as well as an assessment of its appropriateness, and the final calculated reserve values, including consideration of the accounting regime under which the reserve was calculated, were out of scope of this review. A representative sample of 20 licensed insurers was selected for the review.

The GFSC found a number of good practices within industry and that in general reserving methodology met expectations. The GFSC also identified areas which firms should consider as part of their governance of claims reserves, including:

• ensuring that there is sufficient oversight of fronting insurers and outsourced claims functions, for example suitably detailed service level agreements should be in place
• ensuring that case reserves are regularly reviewed and updated, as appropriate, to reflect emerging experience
• keeping reserving policies up to date, considering the impact of inflation over time and evidencing revisions appropriately
• considering whether reserving procedures and controls should be tailored to the individual policy type, where these are notably distinct

A full analysis of the findings is set out in the report and a detailed self-assurance checklist is included as an appendix at the end of the report, which can assist with following best practice in this area.

Thematic reviews published by the GFSC can be found on its legislation and guidance page.