Financial-services company fined £800,000

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AN Island firm has been fined over £800,000 by Jersey’s financial services watchdog for ‘failures’ that had the potential to ‘undermine the integrity and stability of Jersey’s financial-services industry’.

The Jersey Financial Services Commission announced yesterday that a civil penalty was imposed on fund and corporate services company IQ-EQ Jersey for regulatory breaches identified in a 2020 report.

The total fine issued against IQ-EQ was £803,661, with the company avoiding a larger fine of £1,607,322 by accepting the findings and agreeing to settle with the regulator at an early stage.

IQ-EQ, which has its offices in Gaspé House on the Esplanade, was formerly known as First Names. First Names was acquired by the SSG Group in 2018 and that company rebranded globally as IQ-EQ the following year.

The JFSC said: ‘First Names grew rapidly during the period from 2012 to 2016, following the acquisition of a number of Jersey regulated trust company businesses.

‘Following this period, and a change in ownership, following which First Names rebranded to IQ-EQ Jersey, the JFSC requested that an independent reporting professional assess the effectiveness of IQ-EQ Jersey’s processes, systems and controls and compliance with the regulatory framework during 2018–2019 by reference to a targeted review of 16 customer structures.’

The report found that specific IQ-EQ systems, controls and corporate governance were in breach of regulatory requirements and cited failures of its board.

‘This penalty is levied against IQ-EQ Jersey due to the regulatory breaches identified in a reporting professional’s report,’ JFSC director general Jill Britton said.

‘We consider the Board of IQ-EQ Jersey did not respond adequately to the increased scale and complexity of the business following a series of acquisitions between 2012 and 2016.

‘Failures of this nature have the potential to undermine the integrity and stability of Jersey’s financial-services industry.’

IQ-EQ offers financial services through 24 global offices and with over 3,600 employees and $500 million in assets under management.

‘This is an important case for the JFSC in upholding compliance with international standards,’ Mrs Britton said.

‘We urge all financial-services businesses operating in the Island to review the findings identified in the public statement issued today by the JFSC in relation to this case, and to ensure their own compliance with our regulatory framework.’

IQ-EQ Jersey managing director Ben Newman said the company would be strengthening its internal systems and controls.

‘IQ-EQ accepts the findings identified in the public statement issued today by the JFSC, and recognises the challenges presented during the previous period of rapid growth and acquisition,’ he said.

‘We have undertaken a comprehensive remediation programme, which will further strengthen our systems and controls. We are grateful to the JFSC for the opportunity to work with it to resolve matters, which principally arose in acquired businesses. No customer suffered loss from the matters identified.

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