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Jersey To Overhaul Fund Sector Rules

by Jason Gorringe, Lowtax.net, London
08 August, 2016

Jersey's financial services regulator, the Jersey Financial Services Commission, has issued a consultation paper containing proposals to rationalize and consolidate Jersey's private fund and unregulated fund regimes.

A new collective investment fund, called a Very Private Placement Fund (VPPF), is proposed. The VPPF would have a maximum of 15 professional investors committing no less than GBP250,000 (USD326,000).

Modern regulatory powers would be introduced into the Control of Borrowing (Jersey) Law 1947. Funds ("COBO Only Funds") that fall within the definition of a collective investment fund in Article 3 of the Collective Investment Funds (Jersey) Law 1988 would be phased out where those funds have not been granted a consent as either a Jersey private placement fund or a Jersey very private fund (to be re-branded as a VPPF, subject to consultation).

Unregulated Exchange-Traded Funds established pursuant to the Unregulated Funds Order would also be phased out.

The consultation paper issued by the Commission arises from a funds review project by Jersey's Government, the Commission, Jersey Finance (the island's financial services promotional agency), and the industry.

The second phase of the project, which will take place towards the end of this year, will reduce the number of collective investment fund regimes to three, namely: a new and improved Expert Fund; a refined retail fund product (which will "wrap up" existing Unclassified Open-Ended Funds and Recognized Funds); and a regime that meets the requirements of the European Union Alternative Investment Fund Managers Directive.

The third phase, which will be the subject of a consultation paper later this year, will review the effectiveness of all the investment fund-related Financial Services (Jersey) Law 1998 exemptions, including the professional investor regulated scheme exemption orders.

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