The Banking Business (Depositors Compensation) (Amendment No. 2) (Jersey) Regulations 2020 (the Regulations) came into force on Tuesday 28 January 2020.
The Banking Business (Depositors Compensation) (Jersey) Regulations 2009 (the DCS Regulations), established the Jersey Bank Depositors Compensation Scheme (the DCS). In the unlikely event of a Jersey bank failure, the DCS will pay compensation to eligible depositors as quickly as possible, with the aim of preventing hardship.
The Regulations amend the DCS Regulations in order to add provisions that make it a criminal offence for a person, in connection with an application to the Jersey Bank Depositors Compensation Board (the Board) in connection with an application for compensation, to knowingly or recklessly provide information that is false or provide a document that contains such information. Such an offence is punishable by imprisonment for a term of two years and imposition of a fine.
The amendments also give the Board greater information gathering powers, such as the power to demand relevant information from various persons, and a new power to demand information from banks, at any time and in a specified format, about their total holdings of eligible deposits (and other information relevant to functions under, or the operation of, the DCS). Jersey Banks will be used to the power of the Commission to demand such information or documents pursuant to Article 26 of the Banking Business (Jersey) Law 1991 (the Banking Law), but this power has been extended to the Board by operation of the Regulations.
In relation to information received, the Board may disclose this to the Viscount, the Comptroller and Auditor General and the administrator of a bank in default, if the information concerns the bank. Jersey banks should note that, pursuant to the Regulations, a person commits an offence, and is liable to imprisonment for a term of six months and to a fine, if the person fails without reasonable excuse to comply with a requirement imposed on the person under this Regulation; or obstructs an officer, or an agent, exercising such information gathering powers. This sanction mirrors that already set out in the Banking Law, for failure to comply with the Commission in exercising its powers to demand and gather information.
The Regulations have clearly considered data protection and provide that any personal data collected must be encrypted (if not already) by the Board as soon as practicable after obtaining the information and must remain encrypted at all times whilst it is held by or on behalf of the Board and whilst not in use for a purpose that requires it to be temporarily decrypted.
The amendments introduced by the Regulations are welcome and will reduce the risk of the DCS being exposed to false claims and misuse by purported eligible depositors. The greater information gathering and sharing powers of the Board are in line with existing powers of the Commission and are consistent with Jersey continually proving itself to be a transparent and trusted jurisdiction.
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