Banking and corporate finance transactions in Jersey can involve debt restructuring, fund finance and cross-border security packages. solicitors.je is an independent directory. We can point you towards Jersey firms that work in this area.

Banking and Corporate Finance Work in Jersey

Channel Islands corporate finance requires an understanding of local statutory frameworks and judicial precedents.

Bilateral and Syndicated Credit Facilities: Security packages for these facilities are structured under the Security Interests (Jersey) Law.
Fund Finance: Advice on subscription lines and asset-backed lending structures for Jersey-domiciled investment funds.
Structured Finance and Securitisation: Advice on Jersey special purpose vehicles (SPVs) and complex debt issuances.
Regulatory & Compliance Defence: Representation before the Jersey Financial Services Commission (JFSC) in complex inquiries.

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solicitors.je is an independent directory. We can point you towards Jersey firms that work in this area.

Two regimes: movables and land

Jersey uses different legal regimes for security depending on the type of asset. Lenders and borrowers need to know which regime applies to which asset before a facility is documented.

The Security Interests (Jersey) Law 2012 governs security over intangible movable property. Article 4 lists what it covers, including:

deposit accounts maintained in Jersey;
securities accounts with an intermediary maintained in Jersey;
certain investment securities registered in Jersey or held on a Jersey company's register;
documentary intangibles situated in Jersey;
certain Jersey intellectual property.

Shares in Jersey companies, bank accounts and receivables are typically secured under this Law.

Land is different. Under Article 17 of the Loi (1880) sur la propriété foncière, a conventional hypothec over Jersey immovable property can only be created by a contract passed before the Royal Court in authentic form and duly registered. Otherwise it is void. A lender taking security over Jersey real estate is therefore working with a separate process and timetable.

How a 2012 Law security interest is created and perfected

Under Article 15, a security interest under the 2012 Law can only be created by agreement. The parties can also secure a third party's obligations. Once created, the security interest must be perfected to give the lender priority.

Perfection methods

Article 22 sets out three ways to perfect:

Possession, for documentary intangibles such as negotiable instruments.
Control, for the asset types defined in Article 3, which include deposit accounts and investment securities.
Registration of a financing statement on the Security Interests Register. This works for any type of collateral except certain investment securities attaching in favour of an intermediary.

Perfection lasts only while the possession, control or registration is maintained.

The register

Article 60 makes the Registrar of Companies the registrar under the Law. The register is operated through the Jersey Financial Services Commission's Security Interests Register.

Under Article 67, if a financing statement gives no expiry date, the registration lasts 10 years from registration unless it is discharged sooner. A long-dated facility needs a diary note to renew it.

Article 66 provides that a registration is invalid only if an error in it is "seriously misleading". An error in a required name or registration number can meet that test.

Priority and enforcement

Under Article 29, a perfected security interest beats an unperfected one. Between perfected interests in the same collateral, priority generally goes to whichever was registered or perfected first. Timing of registration at signing therefore matters.

When the power of enforcement arises

Under Article 43, the power of enforcement only becomes exercisable once both of these have happened:

an event of default has occurred;
the secured party has served written notice on the grantor specifying it.

The secured party can then appropriate or sell the collateral, take control or possession of it, or exercise the grantor's rights in it.

Notice and fair value duties

Article 44 generally requires at least 14 days' written notice before an appropriation or sale. Notice goes to the grantor and to certain other parties with registered or notified interests. There are exceptions, for example for quoted investment securities.

Article 46 requires the secured party to take all commercially reasonable steps to establish or obtain fair market value. Surplus proceeds must be accounted for under Articles 48 to 51.

Insolvency

Under Article 56, the grantor's bankruptcy, or any other insolvency proceeding in Jersey or elsewhere, does not affect the secured party's power to appropriate or sell collateral under the Law.

Points to settle early in a Jersey financing

Which assets are Jersey-situs intangibles, which are land, and which sit in another jurisdiction under foreign-law security.
Who will file the financing statement, and when, relative to signing and drawdown.
Whether the security agreement defines events of default clearly enough to trigger Article 43.
Whether a borrower carrying on deposit-taking or other financial services business needs JFSC registration. This is a regulatory question to check separately from the security documents.