The Jersey Financial Services Commission (JFSC) has published new updated guidance relating to the tokenisation of real-world assets in a welcome move that JTC’s team of experts believe should help provide further clarity around Jersey’s regulatory stance on tokenisation and reassure issuers and investors around Jersey’s ability and appetite for supporting virtual asset solutions.
The guidance relates in particular to the JFSC’s approach to regulating the application of blockchain technology to real world asset investments and has been produced in conjunction with industry with a view to help support Jersey’s reputation as an innovative jurisdiction in the virtual assets space.
The new guidance on real-world assets is supported further by additional updated guidance, published simultaneously by the JFSC, on Initial Coin and Token Offering – building on the JFSC’s previous guidance on ICOs in 2018.
Commenting on the guidance, Leanne Wallser, Head of Investment Funds and Corporate, JTC Law, said:
“Tokenisation has the potential to be a game changer in the real assets space, opening up opportunities to a broader cross-section of investors, enhancing liquidity, and improving accessibility to investment opportunities. However, this is a rapidly evolving landscape and effective, clear and proportionate regulation is critical in giving both issuers of tokenised solutions and investors confidence.
“With that in mind, it is extremely welcome that this guidance confirms the requirements of issuers when submitting applications for tokenised solutions in Jersey, whilst also clarifying that tokenisation will be treated effectively in the same way as securitisation, with the regulator granting consent to issuers complying with regulation. This is a marked differentiator to other jurisdictions, where compliance is often based more on legal opinion, adding greater certainty to Jersey’s proposition.”
Highlighting the clarity provided by the guidance, Alan Baird, Head of Fund Services – Jersey at JTC, commented:
“We continue to see a future where more traditional fund services are increasingly integrated with tokenised solutions – and effective and clear regulation is vital in achieving that aim. This guidance helps bring additional clarity to a complex and important area of evolution, highlighting that Jersey is open to and able to support high-quality tokenisation activity, balancing innovation with a firm commitment to fighting financial crime. It also serves to clarify that the JFSC’s approach is principles-based, and that it is possible to apply the concept of tokenisation to a broad cross-section of assets, including bonds, equities, and units in a fund.
“We welcome the JFSC’s proactive stance on this issue and believe that this guidance can play a part in helping to shift the dial further in virtual asset regulation – positioning Jersey a leading player in this area in the process.”
The full JFSC guidance can be found here.
