Jersey, China sign memo on finance

The China Securities Regulatory Commission (CSRC) signed a Memorandum of Understanding with the Jersey Financial Services Commission (JFSC) in mid-April, providing another vehicle for China’s enterprises to enter overseas markets.

The memorandum will provide the basis for a framework of cooperation and exchange of information between the two sets of authorities in relation to securities and futures business.

Analysts said it also will boost inbound and outbound investments in several ways. TheMoU will be the first step in allowing Jersey-domiciled funds to participate in the QFII / QDII (Qualified Foreign Institutional Investor/ Qualified Domestic Institutional Investor) program.

Currently, foreign and Chinese investors have only been allowed to invest cross-border by buying into funds regulated through either the QFII program or the QDII program, both of which are restricted by quotas. As such, it will add to Jersey’s appeal as a jurisdiction that can serve as a gateway for investing into and out of China.

The largest of the Channel Islands between Great Britain and France, Jersey is a self-governing British Crown dependency. Its primary industry is modern financial services, with over 25 percent of the population employed in the sector and more than five decades of tradition in the sector.

In December 2013, about one-third of Chinese companies listed on the Alternative Investment Market (AIM) of the London Stock Exchange were incorporated in Jersey.

In addition, Jersey has the largest number of AIM and Financial Times Stock Exchange 100 listings registered outside the UK, according to data from Jersey.

The MoU will open the door to a mutually beneficial exchanges of regulatory information between the authorities.

“This is good news for ensuring compliance within the respective securities and futures laws or regulatory requirements,” said Jersey ChiefMinister Ian Gorst.

The memorandum will benefit Chinese investors looking to internationalize their investments and will further consolidate Jersey’s commitment to the China market, said Gorst.

With cross-border financial services betweenJersey and China expected to increase in coming years, it will be vital that the JFSC and CSRC are in a position to closely cooperate, said John Harris, director general of JFSC.

The memorandum should assist in this regard as it establishes a formal framework for the exchange of regulatory information and mutual assistance for the purpose of ensuring compliance by financial service businesses with each jurisdiction’s regulatory requirements.

“Jersey is now extremely well-placed to realize the growing number of inward and outward investment opportunities being made available by the continued liberalization of the Chinese economy,” said Richard Corrigan, Jersey Finance’s Deputy Chief Executive.