Declaratory Relief In The Context Of Regulatory Actions

In a recent judgment the Royal Court has provided helpful guidance to local businesses operating under "lock down" directions issued by the Jersey Financial Services Commission ("the Commission") as to what constitutes a payment in the ordinary course of business. The Court also considered the extent of its jurisdiction to grant declaratory relief.

Background

SWM Limited ("SWM") is a financial services firm regulated by the Commission.  It is subject to regulatory action by the Commission in respect of the suitability of advice given to investment clients. As part of its regulatory action the Commission had issued a number of directions, one of which prohibited SWM from making payments in the "ordinary course of business".  This is a common part of "lock down" directions issued by the Commission.  In this case the direction was aimed at preserving assets so they would be available for compensation to SWM's customers.