In brief: The Jersey Financial Services Commission published a raft of guidance and examination findings in September 2026, covering everything from financial crime controls to a revised bank licensing policy. Guernsey’s regulator reported a slight dip in fund values and pressed ahead with its digital finance agenda, while the Isle of Man’s authority published sanctions inspection results and processed a series of licence changes.
Jersey: Tightening the Screws on Financial Crime
The JFSC had a busy September, and if you are a compliance officer in St Helier, you will want to pay close attention. Channel Eye reports that the Commission published findings from focus examinations of 14 supervised persons covering targeted financial sanctions controls. The results were, to put it diplomatically, mixed. Good practice was identified, but so were some notable weaknesses: insufficient testing of screening arrangements, inadequate oversight where screening has been outsourced, inconsistent screening of associated parties and counterparties, and poor documentation of decisions to discount potential matches. In short, some firms appear to be treating sanctions screening as a box-ticking exercise rather than a genuine safeguard.
The JFSC also published feedback on virtual asset service providers and the Travel Rule, noting progress since its earlier review but flagging continuing challenges. These include interoperability problems between different Travel Rule solutions, uneven implementation across jurisdictions, and a tendency among firms to blur the line between Travel Rule requirements and ordinary customer due diligence. The Commission wants those lines drawn clearly.
Looking ahead, the JFSC set out its 2027 thematic examination programme. Financial crime work will focus on customer risk assessments in the first half of the year, with a questionnaire going out to firms in October 2026 before onsite examinations begin. Beneficial ownership and control will follow in the second half. Firms that have not already reviewed their processes would be wise to start now.
On the licensing front, the JFSC published its revised bank licensing policy following consultation. The headline change is the removal of the long-standing top 1,000 bank restriction for banking group applicants, alongside a clearer framework for start-up banks and the removal of outdated or duplicated requirements. Crucially, safeguards around financial stability, depositor protection and prudential standards remain firmly in place. Eight responses were received during consultation, and Channel Eye notes they were broadly supportive of the more flexible approach.
The Commission also updated its guidance on how civil financial penalties will be explained in public statements, providing greater transparency about how the final penalty figure is reached through its multi-step methodology.
Rounding out Jersey’s September, the JFSC published guidance clarifying the differences between non-profit organisations and charities, including registration requirements and the additional governance, record-keeping and risk-management obligations that apply to Prescribed NPOs.
Guernsey: Digital Ambitions and a Dip in Fund Values
Guernsey’s Financial Services Commission marked the first anniversary of its Digital Finance Initiative in September, reporting progress on digital assets, tokenisation, stablecoins, an Innovation Sandbox and technology-enabled financial crime controls. A regulatory framework for stablecoins is in development, with feedback and rules expected before the end of 2026.
The GFSC also amended its digital finance framework through the Lending, Credit and Finance (Amendment) Rules, 2026. The changes remove the blanket requirement for an already-licensed firm to obtain a separate VASP licence whenever it undertakes virtual asset activity, remove the restriction preventing VASPs from serving retail customers, and scrap a VASP-specific environmental reporting requirement. The direction of travel is clearly towards a more flexible and commercially attractive regime.
On the funds side, Channel Eye reports that total net asset value of Guernsey funds stood at £270.0 billion at the end of the second quarter of 2026, down £2.6 billion over the quarter and just under £0.9 billion over the year. Closed-ended funds accounted for £224.2 billion, open-ended funds £45.8 billion, and Guernsey Sustainable Funds £4.3 billion. A modest retreat, but the overall figure remains substantial.
The GFSC launched a consultation on fees and administrative penalties for 2027, proposing an overall fee increase of 4.3%, alongside a one-off 17% rebate on annual insurance fees. Any stablecoin-related fee changes will be consulted on separately. Separately, HSC Insurance Limited, which is in liquidation, was confirmed as no longer licensed to underwrite insurance business.
Isle of Man: Sanctions Progress and Licence Housekeeping
The Isle of Man Financial Services Authority published phases 3 and 4 of its sanctions thematic project in September, based on onsite inspections and a follow-up questionnaire assessing compliance with the AML/CFT Code 2019. The Authority reported improvement since earlier phases but found isolated procedural contraventions, and emphasised the importance of documented sanctions controls, ongoing monitoring and screening, proactive risk mitigation and staff training.
On the deposits front, Channel Eye reports that deposits with Isle of Man offices of licensed deposit takers, net of local inter-bank placings, remained at £45.95 billion between 31 March and 30 June 2026, standing £3.32 billion, or 7.79%, higher than at 30 June 2025. That is a healthy year-on-year increase.
The IOMFSA also processed a series of licence changes during the month. Novara Limited was issued a Financial Services Licence covering class 4 corporate services and class 5 trust services, effective 1 September 2026. Apex Corporate Services (IOM) Limited surrendered its licence with effect from 17 September 2026. Several businesses registered under the Designated Businesses (Registration and Oversight) Act 2015 were de-registered, including Dominic Morgan, Collateral Holdings Limited, ALNO Limited, Matthew Edwards and Co, and Bev Buxton.
IOMFSA Chief Executive Bettina Roth participated in the UNEP Global Sustainable Insurance Summit, where discussion covered integrating nature into insurance risk management, underwriting and supervision. The Authority described its approach as risk-based and proportionate, incorporating climate and nature-related matters within existing governance and risk-management processes.
Source: Channel Eye
