Guernsey broadens PCC concept
The Guernsey Financial Services Commission has introduced regulations that significantly open up the protected cell company (PCC) concept in the island.
Until now only collective investment funds, insurers, and securitisation and other unregulated vehicles carrying on financial services activities could be established as PCC structures.
The new regulations permit PCCs to carry out business other than financial services business - this could include the full range of commercial non-financial activities from simple asset holding to complex financial arrangements for sophisticated corporate customers. Copies of the PCC regulations can be obtained from the Commission's website at www.gfsc.gg
The Commission has also prepared new limited partnership regulations, which have been made by the States Commerce and Employment Department.
Closed-ended funds structured as limited partnerships are primarily used by professional and institutional investors, rather than retail investors, and can be innovative and complex. The regulations offer scope, in appropriate circumstances, for reducing the audit requirements for funds used by such investors. Copies of the limited partnership regulations can also be obtained from the Commerce and Employment Department section of the States of Guernsey website at www.gov.gg
"Guernsey introduced the protected cell company concept to the world in 1997,' said Peter Neville, Director General of the Commission. "The PCC structure has been extremely successful, combining innovation, customer protection and cost effectiveness. It is increasingly being copied by other jurisdictions. After eight years it has become clear that the PCC concept has stood the test of time and that protected cell companies should now be able to carry out unregulated activities as well as regulated activities. This new product may well prove to be of significant benefit to Guernsey.
"The changes to the limited partnership framework are another example of how the Commission and industry work together to reduce bureaucracy and to improve Guernsey's competitiveness without harming the protections which customers expect."
Speaking about the PCCmove, Bob Moore, Chairman of the Guernsey International Business Association, said: "The widening of the range of activities which Guernsey PCCs can undertake is a very positive development and enhances the solutions which we can offer to both institutional and private clients. The use of PCCs in the trust and fund administration business areas seems likely to increase significantly."
Peter Niven, Director of Finance Sector Development of the States Commerce and Employment Department, added: "These important and positive enhancements to both PCC structures and limited partnerships mark the start of a process which will see substantial changes over the coming months to our current legislative framework relating to the finance industry. The Commerce and Employment Department is committed to ensuring that the industry has a strong voice in shaping the local legal environment for both existing firms to flourish and new business to be attracted to the island as their jurisdiction of choice. These changes will enable the industry to better compete on the world stage and once again confirm the island as a centre of expertise and innovation."
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