Regulatory Co-operation with Jersey Financial Services Commission

The SFC is pleased to announce that it has signed a Letter of Intent with Jersey’s Financial Services Commission (JFSC) on the enhancement of regulatory co-operation between the JFSC and the SFC (Note 1).

The two regulators aim to work towards the mutual recognition of investment products distributed in their respective jurisdictions.

This Letter of Intent, the seventh to be signed by the SFC, marks a progression in the SFC’s established initiative to dismantle the barriers to the cross-border trading of investment products by extending its intention to forge a more cohesive Asian market for investment products, including mutual funds, to promote the cross-border distribution of Hong Kong investment products in Europe and vice versa (Note 2).

Under this Letter of Intent, both authorities agree to strengthen regulatory co-operation, particularly in matters relating to the cross-border distribution and the supervision of investment products. It is hoped that with enhanced communication and regulatory equivalence of their respective regulatory regimes, both Hong Kong and Jersey will be able to facilitate the development of investment markets through the cross-border distribution of investment products that are acceptable to both authorities.

Both the JFSC and the SFC are members of the International Organization of Securities Commissions (IOSCO) and signatories of the IOSCO Multilateral Memorandum of Understanding (Note 3). This Letter of Intent is signed in the spirit of mutual assistance and co-operation among member securities regulators fostered by IOSCO.

The Letter of Intent was signed in London on 9 September 2005 by Mr David Carse, Director General of the JFSC, and Mr Andrew Sheng, Chairman of the SFC (Note 4). Mr Andrew Sheng was in London attending the meeting of the Financial Stability Forum.

Both authorities would be establishing a bilateral working group that would work towards the achievement of the objectives set out in the Letter of Intent.

Mr Sheng said: "The SFC is committed to facilitating the development of deeper and broader investment markets globally. We are delighted to sign this LOI with the Jersey Financial Services Commission, our second non-Asian partner in this endeavour. Jersey is strategically located and plays an important role in the European investment products market, and therefore ideally placed to explore with the SFC the means of achieving the cross-border distribution of investment products between our respective markets to our mutual benefit."

Mr Carse said: "I am delighted to sign this Letter of Intent with the Hong Kong SFC. The Commission considers that co-operation under the Letter will facilitate access to Hong Kong’s markets for Jersey investment products, and also help to develop the range of products that are available for distribution in Jersey. It will also provide a more formal basis for exchanging views with an important Asian supervisor on matters of common interest."

Ends

Notes to Editor:

1. The Jersey Financial Services Commission was established in 1998 under the Financial Services Commission (Jersey) Law 1998. The JFSC is responsible for the supervision of the financial services sector, including banking, collective investment funds, insurance business, investment business and trust and company service providers. The Director General is also the Registrar of Companies.

2. The SFC signed similar Letters of Intent with Indonesia’s Ministry of Finance Capital Market Supervisory Agency (BAPEPAM) in May 2004, with the Securities and Exchange Commission of Thailand (SEC Thailand) in November 2004, with the Securities and Exchange Commission of Sri Lanka (SEC Sri Lanka) in April 2005, with the Securities and Exchange Board of India (SEBI) in May 2005, with Guernsey’s Financial Services Commission (GFSC) in June 2005 and with Malaysia’s Securities Commission (SC) in July 2005.

3. There are currently 27 signatories of the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Co-operation and the Exchange of Information (IOSCO MMOU), which is the internationally recognised benchmark for enforcement co-operation between securities regulators. Each signatory of the IOSCO MMOU has the legal authority, the resources and the commitment to initiate or receive and act upon requests for regulatory assistance to or from every other signatory. This facilitates seamless, timely and effective cross-border regulatory co-operation and enforcement assistance.

4. A photograph taken during the signing ceremony is also attached to the electronic version of this press release. Photograph shows Mr Carse (left) and Mr Sheng.