A SPECIAL committee of the States could in future manage the relationship between government and independent regulators like the Jersey Financial Services Commission, External Relations Minister Ian Gorst suggested in the States.
Referring to the US model of a committee of the House of Congress, Deputy Gorst raised the possibility of a similar approach in Jersey.
“I’m not sure that we’re yet at that point in our thinking, but that may be one thing that we do to enhance accountability – have a special committee of this Assembly,” the minister said.
He was speaking two weeks after a JEP investigation revealed allegations of bullying and a lack of transparency and accountability at the regulator.
Government’s relationship with the regulator would be, Deputy Gorst said, an important part of the current review into Jersey’s financial regulation, which has already seen individuals involved with the JFSC give evidence to the government in what the minister called a “wide-ranging” review that would include consideration of cultural as well as administrative issues.
Deputy Gorst drew attention to the importance of better sharing of information between the JFSC and the government in future to help generate confidence in the regulator and help shape future policy. “I think we have historically called those issues ‘gateway issues’, where there’s a flow of information – or a lack of a flow of information.
“The regulator holds a great wealth of information which tells us what’s happening in the industry but we don’t have it.
“That amalgamated information will help give confidence around the performance of the regulator but equally it will help show where issues need to be addressed, whether products continue to be used successfully or not, number of registrations of Jersey companies on the register, and all of those important issues which will help deliver policy for the future,” Deputy Gorst said.
The minister said he recognised “disquiet and concern” in the way that parts of the JFSC had operated and the legislative environment.
“I also recognise the need to ensure that there is balance between the need to ensure there is regulation to meet international standards and allowing the industry to continue to be competitive. I understand that the industry and the public want to see greater transparency and accountability,” he said.
He stressed that the current review would not investigate individual cases, but he also made it clear that it would not simply be administrative in its focus.
Deputy Gorst told the States that the Council of Ministers met last week to discuss whether the JFSC should be brought within the ambit of the Island’s Freedom of Information Law in line with a previous States’ decision.
While he stopped short of guaranteeing its extension, he referred to wider changes to the FoI Law which he said would be relevant to the JFSC’s position.
“If we are able to make … amendments around an absolute exception to commercial confidentiality within the legislation, then my objection to extension of FoI legislation falls away.
“But I have given a commitment nonetheless to consider its extension to the JFSC with the caveat, of course, that the Financial Conduct Authority in the UK has FoI [and] most of those questions are really about expenses and budgeting issues and not about individual enforcement cases,” Deputy Gorst said.
He was called on by Deputy Hilary Jeune to explain why it was that the government was conducting a review into an independent body.
“It is not just a Jersey problem around accountability but a problem that countries are finding across Europe.
“Ultimately, regulators are accountable not only to international bodies, they are also accountable to the people of Jersey through this Assembly.
“We need to make sure that accountability is fit for the world in which we now live,” he said.
