Cyan Regulatory

SUPERVISORY RISK DATA COLLECTION - DUE 11 APRIL 2025 The Jersey Financial Services Commission have announced that the 2024 workbooks are available and published the accompanying guidance notes. It is important to check that you have been notified and can access your workbooks. ⚠️ Please note the deadline this year is 11 April 2025. p.s. we were just lucky with the timing of our post yesterday! 😊

JFSC's Annual Supervisory Risk Data Returns As we now enter the second full week of January, we wanted to reshare the below post on certain additions to this year's data returns. Whilst the JFSC will publish their guidance in due course, it is important to be considering how you will report the additional information being requested, noting it may require some manual effort, if the information is not currently recorded in your systems. 3 changes to highlights are: 💠 Number of customers that carry out any activity listed in table 2 of the Sound Business Practice Policy 💠 Number of complaints by category (8 categories) 💠 A new AMLSP workbook listing each Schedule 2 business with an initial 5 questions. Please refer to the paper issued by the JFSC for further detail, link below. If we can be of assistance. please get in touch.

The Gambling Commission has fined online gambling business Greentube Alderney Limited (trading as Admiral Casino) £1 million for social responsibility and AML failures. This is Greentube’s second fine for such failures and came about after a follow-up assessment found that the business had failed to remediate completely, although there had been significant general improvements. Failures included: ▪️ Failure to fully investigate accounts potentially funded or controlled by a different account holder. The Commission gives an example where Greentube failed to consider an account with the same address and surname as another (blocked) customer who had been convicted for supplying class A drugs; ▪️ Failure to follow the business’ policy re “risky occupations” – for example, a ‘finance manager’ who had access to client funds which could be misappropriated and laundered; ▪️ Failure to scrutinise information in a timely manner, leading to avoidable delays in the identification and potential escalation of ML/TF risks. ▪️ Failure to implement its policy on basing customer limits on regular, sustainable income; ▪️ Failure to implement its processes to ensure customer documents were genuine; ▪️ Failure to implement controls to identify indicators of vulnerability or potential harm in a timely manner. This case should remind all gambling and financial services businesses of the importance of undertaking robust and comprehensive remediation programmes and being able to evidence the work performed. If your organisation is undertaking such work and would like Cyan’s assistance, please get in touch. #Alderney #Guernsey #FinancialServices #AML 

The Jersey Financial Services Commission has published aggregated data from the Supervisory Risk Data Returns submitted each year by industry. The first round of reports cover the banking, investment business, TCB and legal sectors. The reports are detailed, with the findings mapped back to the Data Return questions, and tailored to each sector with sections such as: ▫️ Sector overview ▫️ Customers - residency, risk, PEPs, activities ▫️ Services ▫️ Employees - number, residency, number in risk & compliance ▫️ Reliance and Money Laundering Order exemptions. Usefully, the reports also include some key risk indicators which businesses could use as benchmarking tools. The reports warrant careful review by businesses in the relevant sectors to consider how the business fits with the picture painted of the wider sector and, where there are any discrepancies, to assess the reason(s) for the discrepancy and consider whether any follow-up action is required. The publication of such thorough reports is very welcome as they will enable regulated businesses to better assess and understand their position within their sector and the AML/CFT risks which they face. #JerseyCI #risk

A very postive post from GRC industry expert Michael Rasmussen about our software partner Decision Focus. The flexibility of the Decision Focus platform Michael mentions has allowed us to use the Altair Group group expertise to to create our compliance focused solution Beacon (https://lnkd.in/g9gdB8cB) If you wanted to learn more about Beacon or the Decision Focus platform, do get in touch, we would love to hear from you. #GRC #RegTech #Compliance

Sanctions Legislation Update New UK regulations came in to force on 5 December 2024 through the Sanctions and Asset-Freezing (Implementation of External Sanctions) (Jersey) Order 2019. The amendments include: 🛑 Trust services prohibitions – Russia regime The amendments clarify that acting as a nominee shareholder when that involves the use of a trust or similar arrangement, should be considered a prohibited trust service. Acting as a nominee shareholder is clarified as meaning undertaking the following activities as the legal owner of the shares: i. exercising the voting rights of those shares in accordance with the wishes of the beneficial owner of those shares (“O”); or ii. receiving dividends in respect of those shares held on behalf of O, where the activities are undertaken in accordance with an arrangement with O that involves a trust or similar arrangement. 🖥️ Reporting Obligations In line with existing UK requirements, Jersey will introduce the obligation to make an annual report on 30 November each year on funds held as at 30 September that year, this will commence from November 2025. Updated Jersey guidance will be published in due course. The amendments also include updates to certain licencing and exception provisions, these are highlighted in the government announcement which can be accessed from the link below. These amendments will require businesses to consider: 💠 Any impact on the activities undertaken by your business 💠 Identify if acting as a “nominee shareholder” to a person connected with Russia (if required submit the relevant sanctions form to the Minister for External Relations) 💠 Prepare for new reporting requirements 💠 Review and updates to relevant P&Ps 💠 Updating training material https://lnkd.in/eZNt93EP #jerseyci #sanctions

JFSC Thematic Examination – NPOs and Diversion Risk & Mitigation The Jersey Financial Services Commission recently presented the findings of their thematic examination of NPOs, conducted on the identification of diversion risks and having relevant mitigation measures in place. They identified the following areas for improvement: 📃 Insufficient information obtained on Associate NPOs (the NPO’s partner organisations) regarding where and/or how the funds were being used after their receipt of funds from the NPO. ⚠️ Understanding by the Boards/Governors of what diversion is and how it may be found within the specific NPO. 📁 Reliance on anecdotal confirmations or limited evidence on how funds were being used such that the NPO could not gain adequate comfort that diversion had not occurred. The JFSC noted the following examples of good practice: ☑️ Controls implemented to ensure funds reach the intended destination. ☑️ NPOs often used a combination of diversion mitigations methods, such as: o  On the ground visits o  In-person meetings and/or video conferencing o  Receipts from spending o  Progress reports o  Photographs o  Avoiding over-reliance on any one method. A combination of methods may offer the best mitigation. ☑️ Documenting what actions had been taken and updating processes where enhancements could be made. The JFSC have invited all NPOs to get in touch directly with any queries/questions and we at Cyan are also happy to assist with your queries and discuss if we can be of assistance. The presentation slides can be accessed here: https://lnkd.in/e6uenQrh #npo #charity #diversion #aml

The National Crime Agency (NCA) has published a really useful briefing on Operation Destabilise - their disruption of a multi billion dollar Russian money laundering network. If you scroll to the bottom of the briefing and click on "Case Studies", number 3 provides more information on the role the States of Jersey Police played re three individuals from Uzbekistan and Mongolia who tried to launder £60,000 in cash in 2022. Well worth a read!

From January 17th 2025, financial institutions with a presence in the EU or companies providing IT services to EU based financial insitutions will need to comply with the Digital Operational Resilience Act (DORA). The requirements for DORA are quite demanding and companies need to be prepared. Our GRC software partners Decision Focus have a module which is ready to help with ensuring DORA compliance. Get in touch for an introduction or read their white paper here https://bit.ly/4fMFFJf

JFSC POST-MONEYVAL PLAN The Jersey Financial Services Commission has published a plan detailing how it is going to address the recommendations arising from the MONEYVAL report that are solely for it to complete. The Plan seems ambitious with the JFSC targeting to review a number of key areas for regulated businesses. Businesses should therefore review the Plan to ensure they understand any implications for their own operations. Actions for the JFSC include: ◼️ JFSC model and processes: ▫️ A review of the data points used in the JFSC’s institutional risk model for ML/TF risks by the end of 2024 ▫️ A review of internal decision-making policies and guidance re sanctions / penalties to consider further refinements by the end of Q1 2025 ▫️ A review of the JFSC’s supervisory strategy to ensure that the frequency and type of examinations is proportionate to the risks presented by different industry sectors and individual entities, to be completed by the end of Q2 2025 ▫️ A review of how breaches and findings are recorded and categorised to ensure appropriate action is taken, review to commence by the end of 2024 ◼️ Registry: ▫️ A review of supervisory practices re legal persons and arrangements to consider enhancements, review to commence by the end of Q1 2025 ▫️ A review of guidance on control by other means, to commence in Q2 2025 ▫️ A review of the recording and application of sanctions / penalties where breaches are identified, to include supervisory practices and to commence by the end of the year ▫️ Enhancements to the Contact Us form on the website to enable optional reporting of discrepancies in information There are other actions re targeted financial sanctions, criminal background checks, NPOs, PEPs, suspicious activity reporting and more, all detailed in the JFSC’s plan. It seems there may be quite a few changes to JFSC guidance and practices in 2025 as a result of the work the JFSC is to undertake. We'll continue to flag these up and post our thoughts, but you're always welcome to get in touch if you'd like to discuss any matters in detail. #financialservices #JerseyCI