Jersey moves further to repeal COBO: Draft Financial Products and Prospectuses Law published

At a glance  

Following the first phase of repeal of Jersey's Control of Borrowing framework (COBO framework) earlier this year by virtue of amendment to the Control of Borrowing (Jersey) Order 1958 (details can be found here) the Draft Financial Products and Prospectuses (Jersey) Law 202- has been published and lodged for debate by the States Assembly. The draft law would repeal the COBO framework and introduce targeted registration regimes for Jersey Private Funds, legacy private funds and digital asset issuers. It would also establish a modern regime for prospectuses circulated to Jersey retail investors. For digital asset issuers, the principal change is statutory registration supported by a new JFSC Digital Asset Issuer Guide. 

What the draft law proposes to introduce 

Key features of the Draft Financial Products and Prospectuses (Jersey) Law 202- are:

• Repeal and replacement of COBO. The Control of Borrowing (Jersey) Law 1947 and Control of Borrowing (Jersey) Order 1958 (COBO) would be repealed. Public interest gatekeeping would instead sit within the relevant entity laws and the new product regime. 
  
  
• Registration of specified financial products. Digital asset issuers, Jersey Private Funds and legacy private funds would be brought within a dedicated statutory framework. The draft law also provides for a Ministerial Order to bring other financial products, or classes of financial product, within the scope of the law if considered necessary to provide for protection of investors in relation to that product.
  
  
• Retail prospectus controls. JFSC consent will continue to be required for the offering of securities by a non-Jersey company to local people who may not be financially sophisticated. 
  
  
• Reduced friction elsewhere. Ordinary securities issuers, such as debt SPVs offering to professional or financially sophisticated investors, would not be subject to a replacement product registration regime merely because they issue securities. 

Why this is happening 

The reform forms part of Jersey’s Financial Services Competitiveness Programme and the Time to Win agenda. The existing COBO framework originated in the mid-twentieth century and now overlaps with modern, sector-specific legislation. The stated objectives are to remove duplication, reduce administrative friction, preserve effective public-interest gatekeeping and improve Jersey’s competitiveness without weakening investor protection. 

As noted in our earlier briefing, the April 2026 Amendment Order delivered 'quick wins' by narrowing consent requirements, including for professional and private structures. The next phase of reform requires legislative change to complete the repeal of the COBO framework and introduce replacement consent regimes where appropriate. 

What changes for digital asset issuers? 

Currently, Jersey established issuers of digital assets are required to procure an Article 2 or Article 4 COBO consent in order to be able to issue tokens or other digital assets, depending on the nature of the digital asset to be issued. With COBO being repealed, the Draft Financial Products and Prospectuses (Jersey) Law 202- proposes to introduce an adjusted consent regime for digital asset issuers, with key features summarised:

• Statutory registration replaces the current COBO route. A Jersey company, foundation, partnership, LLC, LLP or qualifying unit trust that issues a digital asset would be a digital asset issuer unless exempt under a new Digital Asset Issuer Guide (see below) or a registered deposit-taking business under the Banking Business (Jersey) Law 1991.
  
  
• Broad digital asset definition. A digital asset under the new draft law is a cryptographically secured digital representation of value or contractual rights that can be transferred, stored or traded electronically and uses data-recording or storage technology, which may include distributed ledger technology.
  
  
• Application through a regulated trust company business. The application process is intended to look and feel very similar to that made by designated service providers on behalf of applicant Jersey Private Funds. Under the draft law, the applicant must be a Jersey-regulated trust company business providing the relevant services to the issuer. The hope and expectation is that this would allow the application process for digital asset issuers to be further streamlined.
  
  
• ICO/ITO and RWA guidance will be consolidated. The new Digital Asset Issuer Guide is intended to combine and update the JFSC’s existing ICO/ITO and tokenisation of real-world-assets guidance. It is expected that industry, Jersey Finance, trade bodies, the JFSC and Government will work together to develop the guide ahead of implementation. The JFSC also intends to add a digital asset issuer services section to the Trust Company Business Code of Practice, which would be applicable only to those providing services to digital asset issuers. This will be subject to JFSC consultation in due course.
  
  
• Conditions and continuing supervision. As was the case with COBO consents, registration may be conditional. Knowing or reckless breach of a condition would be an offence.
  
  
• Grandfathering for existing issuers. A digital asset issuer holding valid COBO consent immediately before commencement would be treated as registered. Existing conditions would continue, although the JFSC would retain its power to impose, vary or revoke conditions and to revoke registration. 

When will the changes take effect?

It is proposed that the Draft Financial Products and Prospectuses (Jersey) Law 202- will come into force mid-2027, by Ministerial Order. This will provide time for any changes to be made to systems, forms, guidance at the JFSC and changes needed by industry. 

Practical takeaway 

Overall, if adopted, the reforms will complete the repeal of Jersey's longstanding COBO framework and replace it with a more targeted and modern regulatory regime. The proposed changes seek to reduce unnecessary regulatory friction while maintaining appropriate oversight and investor protections.

In relation to digital asset issuers in particular, the proposal is evolutionary rather than a wholesale change of policy. This is a continuation of the existing regime that formalises and combines the JFSC’s existing ICO/ITO and tokenisation of real-world-assets guidance. As set out in the Time to Win report, it is important that provisions are made for the future of this sector as it grows. The new framework allows for sufficient flexibility for Jersey to remain an agile and progressive jurisdiction, well placed to welcome these structures.