Regulatory Brief: Jersey targets alternative investment funds
The Jersey Funds Association is holding a seminar in London on 22 March to
promote its new fast track authorisation process for expert funds.
The new expert funds process (see the detailed November 2003 interview with
Nick Kershaw, Ogiers, in the European Legal & Regulation section on the
Hedgeweek home page) is expected to boost Jersey's levels of private equity,
hedge funds, and other expert funds business.
The seminar follows the launch last month of the Expert Funds Guide by the
Jersey Financial Services Commission. The guide is the result of close co-
operation between the Regulator and the Industry. It also follows a benchmarking
exercise last year in which Jersey's fund industry professionals sought the views
of senior international lawyers, accountants and other fund promoters.
David Hall, chairman of the Jersey Funds Association, said: "We went to the
Commission with the feedback we had obtained and discussed the shift in policy
that was required if we were to position Jersey as the domicile of choice for
alternative investment strategy funds. The result is a streamlined regulatory
system that will service the institutional market and make Jersey a formidable
competitor for expert funds business."
The Expert Funds Guide has been designed to make the funds authorisation
process simpler and quicker for certain types of expert funds. Authorised
functionaries in the Island, including administrators, fund managers and trustees,
can self certify expert funds which meet criteria set down by the Commission in
Jersey's long established funds industry is valued at over GBP 105 billion. It has
been recognised for some time that the Island's reputation and position in the
market was such that it would attract more high quality, leading edge institutional
funds business if it introduced an enhanced regulatory regime focused
specifically at alternative investment strategy funds.
At the heart of the reform lie two fundamental principles:
* A shift in emphasis from regulating on a fund-by-fund basis to a regime
that focuses on the probity and competence of authorised service
providers in the Island to operate the fund on a day by day basis; and
* An acknowledgement that for an expert fund, as opposed to a retail
structure, it is the investors themselves who are best placed to conduct
the necessary due diligence to evaluate the risk of making an investment
in the fund.
Under the proposals, authorised functionaries in the Island, including
administrators, fund managers and trustees, can self certify expert funds which
meet criteria set down by the Commission in the Expert Funds Guide.
The changes make the authorisation process simpler, clearer and significantly
reduce the time taken to process applications. There is no longer a requirement
for a management company and, in the case of hedge funds, no requirement for
a local custodian, provided the fund has an approved prime broker. Details are
available at the JFSC website www.jerseyfsc.org
David Hall added: "When the revised policy on non-domiciled funds is launched
in the near future, regulated Jersey administrators and other fund professionals
will be able to act for funds domiciled in other jurisdictions such as Cayman and
Dublin without the current need for dual regulation. It is proposed that the scope
of the revised policy will enable Jersey to compete effectively for funds business
domiciled in onshore centres also."
Jersey Expert Funds Seminar on 22 March
Some of Jersey's senior fund professionals, together with leading representatives
from the Island's Regulator, visit London later this month to outline the benefits of
the expert funds guide.
At a seminar on Monday, 22 March, Jersey's fund professionals will outline the
benefits that the new regulatory framework will bring to City professionals. In
addition to presentations by a number of specialist industry representatives, the
Director General of the Jersey Financial Services Commission, David Carse,
OBE, will also be speaking.
The seminar for leading City fund advisers, at the Renaissance London
Chancery Court Hotel, High Holborn, has been arranged in association with
Jersey Finance Limited, the promotional arm of the Jersey Finance industry.
More information is available from the Jersey Finance website
<www.jerseyfinance.je> and any City fund advisers who have not yet received an
invitation but would like to attend are asked to contact Jersey Finance on 01534
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