Structured Finance transactions through Jersey SPVs

Structured Finance transactions through Jersey SPVs


Jersey’s reputation as one of the world’s leading international finance centres has been consistently recognised and endorsed by independent bodies and institutions of the highest standard. Robust regulation, political and economic stability, tax neutrality and a sophisticated modern and flexible legal system combined with a wealth of experience and expertise offered by highly skilled financial services providers keep Jersey at the forefront of global finance.

Jersey’s continued commitment to meet the highest international standards on tax transparency has been recognised by the most senior political figures in the European Union (the “EU”) and by the Secretary General of the Organisation for Economic Co-Operation and Development (the “OECD”).

Jersey is an associate member of the OECD but it is not a member of the EU. Securities issued by a Jersey SPV are treated as been issued by an OECD domiciled issuer. The sovereign rating assigned by Standard and Poor’s ratings services to Jersey gives a AAA rating ceiling for securities issued by Jersey SPVs.

Jersey continues to remain the jurisdiction of choice for corporate entities seeking to list. The greatest number of FTSE 100 companies registered outside of the United Kingdom are registered in Jersey.

Jersey SPVs have long been used for a variety of capital markets transactions, such as securitisations, repackagings, tier 1 capital raising, commercial paper programmes, derivatives, car fleet securitisations, sukuk structures and real estate asset financing.

Regulatory Regime

There is a single regulatory authority in Jersey called the Jersey Financial Services Commission (the “Commission”) which is responsible for the regulation, supervision and development of the financial services industry in the Island of Jersey.

Prior consent from the Commission to the issue of securities by a Jersey SPV is required pursuant to the Control of Borrowing (Jersey) Order, 1958, as amended (the “COBO Order”) where the number of persons in whose name the securities are to be registered or held (for bearer securities) exceeds ten (“COBO Consent”).

In addition to consent under the COBO Order, where there is a “public” offer of securities (broadly speaking, an offer to more than fifty persons), the SPV will be issuing a “prospectus” (as defined in the Companies (Jersey) Law, 1991, as amended (the “Companies Law”) and must be incorporated as a public company for Jersey law purposes. Industry consultation is expected shortly regarding the widening of the definition of “prospectus”. The Companies Law imposes stricter filing requirements for public companies with the most important being that a public company must prepare and file annual audited accounts together with the relevant auditor’s report.

Prior consent (the “Registrar’s Consent”) to the circulation of a prospectus by the SPV in Jersey or elsewhere must be obtained from the Jersey registrar of companies (the “Registrar”). The prospectus will be subject to the provisions of the Companies (General Provisions) (Jersey) Order 2002 (the “GPO”) and a signed copy of a Memorandum of Compliance will need to be filed with the Registrar, together with a final printed copy of the prospectus signed by, or on behalf of, the directors of the SPV. Certain derogations from the requirements of the GPO may be obtained provided that the Registrar is satisfied that the derogations do not affect the substance of the prospectus or are not calculated to mislead. The Registrar will require a true and fair English translation of any prospectus or information document that is to be issued in a foreign language. A copy of the prospectus will be placed in the Public Registry.

The general policy of the Commission in relation to the issues of securities by a Jersey SPV is to strengthen further the Island’s reputation as a high quality and well regulated financial centre.

Whilst the Commission has certain general requirements in relation to the issues of securities by Jersey SPVs, in the interests of maintaining maximum flexibility, the Commission keeps such requirements to a minimum. Subject to the Commission being satisfied that Jersey’s reputation will not be prejudiced by being associated with a securities issuing scheme, it generally adopts a “hands-off” approach to the regulation of securities issues and reviews its procedures on a regular basis and the relevant legislation to achieve this.