Jersey plans further regulatory moves to support fund growth
Jersey intends to overhaul the legal framework for funds functionaries by bringing them within the scope of the Financial Services Jersey Law.
This initiative, which is as part of a continuing programme of enhancement to the island's funds regulation, would then permit Functionaries to conduct their activities on an ongoing basis without needing to be approved each time they acted for a different fund.
Helen Hatton, Deputy Director General of the Jersey Financial Services Commission (JFSC), highlighted this and other developments at a debate on hedge funds held in London on Tuesday, 27 September.
"Whilst the JFSC intends rightly to maintain the high standards of regulation that have been recognised internationally, it is working with the funds industry to create a still more efficient regulatory regime, which ultimately will benefit the fund promoters and administrators using Jersey," she said.
Jersey has witnessed high levels of funds business growth since the launch of the Expert Fund Guide and then the Non-Domicile Fund Guide in 2004. The most recent statistics compiled by the JFSC show that the value of collective investment schemes has risen by almost 15 per cent to a new record high of GBP 113 billion and the total number of funds has jumped by over 30 per cent to just under 900. Both Expert Funds and a steady stream of similar non-domiciled funds are being approved by the Commission.
"Whilst many of the new funds are specialist in nature, there has been a general increase in more traditional equity, bond and money market funds also," added Hatton. "However, the big growth area is from promoters of alternative investments including hedge funds, fund of hedge funds, property and private equity funds. The Net Asset Value of the funds in this sector nearly doubled in the last recorded quarter."
Phil Austin, Chief Executive of Jersey Finance Limited, said: "After a pioneering period as a location for retail funds business, Jersey has engineered a major shift into the specialist sector and as a result, fund values have reached a new record high. The shift has been easier to accomplish because the Island already possessed an experienced range of fund administrators, both as part of the services supplied by major custody banks, and from boutique groups who deliver more bespoke services."
He added: "Promoters are attracted by the appropriate level of regulation combined with the experience of the Island based administrators, its acknowledged reputation, sound corporate governance and range of servicing options."
Subsequent initiatives including the campaign to attract Hedge Fund Managers and Family Offices to re-locate to the Island, is giving further impetus to Jersey as a centre of excellence for funds business. The two London-based hedge fund managers that have already announced their intention to re-locate to Jersey are bringing funds valued at nearly USD 900 million to the island.
Jersey plans other legislative changes, which run parallel with enhancements to its funds industry. For example, legislation to permit Protected Cell Companies will be on the statute shortly and Trusts Law reforms are in train and are expected to broaden the appeal of the Island to international investors still further.
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