Thursday, January 27, 2011
The Economic Development Department has lodged regulations to benefit the finance industry by improving the merger provisions in the Jersey Companies Law.
The regulations will enable Jersey companies to merge not only with foreign companies but also foreign bodies that are incorporated outside Jersey but which are not companies subject to appropriate safeguards. The regulations will also allow Jersey companies to merge (in any combination) with other Jersey companies, ie. other bodies incorporated in Jersey, such as foundations.
At present, it is only possible to directly merge a Jersey company with another Jersey company. It is possible to merge a Jersey company with a foreign company indirectly by first bringing them into the same jurisdiction (via a continuance) and then merging them, but this procedure is more cumbersome and more costly.
Under the regulations, a merger involving only Jersey companies will be able to be carried out through the Registrar of Companies. Any proposed merger involving a body other than a Jersey company will require the consent of the Jersey Financial Services Commission, which must consider the interests of members, creditors and the public, and the reputation of Jersey. Further, proposed mergers involving insolvent companies will only be allowed if the Royal Court permits the merger on the basis that it will not be prejudicial to any creditor of any of the merging bodies.
Under the plans, the Panel on Takeovers and Mergers and the Jersey Competition Regulatory Authority will continue to carry out their respective functions in relation to mergers.
Welcoming the proposal, Economic Development Minister, Alan Maclean, said: “In an increasingly globalized world, more and more business is conducted across national borders and there has been a growing demand for Jersey companies to be able to merge directly with a wider range of bodies. These regulations will strengthen the competitiveness of the Jersey company, one of the key tools used by the finance industry in the island, which will help to maintain Jersey’s position as one of the most progressive jurisdictions in the world."