Jersey's trust law framework — built on the Trusts (Jersey) Law 1984 and its subsequent amendments — is one of the most sophisticated trust law regimes in the world, and continues to evolve in response to international regulatory developments, court decisions, and the JFSC's evolving supervisory expectations. For CSPs holding trust company business (TCB) licences and administering Jersey law trusts, 2024 brought a series of developments that warranted careful attention.
The JFSC continued its multi-year programme of enhanced supervision of trust and company services businesses during 2024, with a particular focus on trust administration standards, the quality of trustee decision-making documentation, and compliance with the updated AML/CFT Handbook requirements. CSPs subject to JFSC examination in this period faced detailed scrutiny of their trust administration processes in a way that had not been typical in earlier supervisory cycles.
The Trusts (Jersey) Law 1984: Current Framework
The Trusts (Jersey) Law 1984 (TJL) establishes the statutory foundation for Jersey trusts. Key features of the Jersey trust law framework include: recognition of trusts established under Jersey or foreign law; the ability to exclude the forced heirship provisions of foreign law from applying to Jersey trusts (Article 9 of the TJL, subject to limits following the ECHR considerations); provisions for purpose trusts without ascertainable beneficiaries; specific provisions for flee clauses enabling trustees to change governing law; and the ability to include anti-Bartlett provisions limiting a trustee's obligation to supervise underlying companies.
The enforcer mechanism — a person with standing to enforce the terms of a purpose trust — is well-established in Jersey law and is an important feature for charitable and non-charitable purpose trust structures. CSPs providing trustee services for purpose trusts must ensure that enforcer arrangements are properly documented and that the trust deed clearly establishes the enforcer's powers and obligations.
JFSC Supervisory Focus: Trust Administration Quality
The JFSC's 2024 supervisory focus on trust company businesses built on themes identified in earlier thematic reviews: the quality of trustee decision-making; documentation of distributions and the trustee's consideration of beneficiary interests; compliance with investment mandates and the trustee's duty to maintain adequate information about trust assets; and the adequacy of client risk assessments for trust structures.
"The JFSC's trust administration reviews in 2024 were notably more detailed than in previous cycles. Examiners were specifically testing whether trustees had documented their reasoning for distribution decisions, whether they had considered the interests of all classes of beneficiaries, and whether investment decisions had been recorded with adequate rationale. Firms that had treated these as administrative formalities found the experience uncomfortable."
— Director, Jersey-licensed trust company
The JFSC has been particularly focused on the quality of trust files for structures that have been in administration for many years. Legacy trusts — those established before the current compliance standards were developed — often have poor documentation of historical trustee decisions, incomplete beneficiary information, and CDD that has not been refreshed in line with current requirements. The JFSC expects CSPs to have programmes in place to remediate legacy file quality, not to treat grandfathered structures as exempt from current standards.
AML/CFT Handbook Updates Affecting Trust Administration
The JFSC's AML/CFT Handbook — the primary operational guidance for Jersey-regulated firms on anti-money laundering and counter-terrorist financing obligations — was updated in 2023 with provisions that continued to affect trust administration practices through 2024. The key updates affecting CSPs included: enhanced guidance on the identification and verification of beneficial owners in trust structures; updated requirements for the documentation of trust purpose and source of wealth for trust assets; and new guidance on the application of the risk-based approach to trusts with complex ownership structures or non-EU/non-equivalent jurisdiction settlors and beneficiaries.
The Register of Beneficial Owners and Jersey Trusts
Jersey's beneficial ownership and control framework requires CSPs administering Jersey trusts to maintain beneficial ownership information and to provide it to the Jersey Financial Intelligence Unit (JFIU) and the JFSC on request. The register held by the CSP must identify the settlor, trustee(s), protector (if any), beneficiaries (or class of beneficiaries for discretionary trusts), and any other natural persons exercising effective control.
The interaction between trust beneficial ownership obligations and the Jersey register of company beneficial ownership is particularly relevant for trusts that are beneficial owners of Jersey companies held in the same structure. The CSP must ensure that the register maintained for the company correctly reflects the trust's beneficial ownership of company shares, with adequate documentation of the underlying natural persons who are the trust's beneficial owners.
Practical Operational Implications
For Jersey-licensed CSPs, the 2024 supervisory environment made clear that trust administration quality is a priority JFSC focus. The practical operational response should include: a systematic file review programme to identify and remediate legacy file deficiencies; updated trustee decision-making templates that capture the required reasoning elements; refresh of all CDD that has exceeded the applicable review cycle; and investment in technology that supports structured file management and compliance workflow for trust structures.
CSPs that have not yet conducted a structured review of their trust portfolio against current JFSC standards — particularly for legacy structures acquired through business transfers — should treat this as an immediate operational priority. The cost of remediation before an examination is substantially lower than the cost of managing enforcement action arising from systemic file quality deficiencies identified during examination.