Innovation is the key to quality funds business
Beverley Le Cuirot outlines the strong progress made by Jersey in positioning itself as a leading funds jurisdiction within the European time zone.
By March this year the value of the fund assets under administration in Jersey had reached a record high of GBP 156bn, up 50 per cent over the past year and 13.5 per cent over the first three months of 2006. Alternative funds - many of them established under the successful Expert Funds regime - now account for assets under administration of GBP 34.6bn.
Jersey has also been active on the legislative front, introducing new legislation that permits the creation of cell companies through an innovative concept known as the Incorporated Cell Company. This involves the formation of separate, legally recognised cells within the overall structure, with each cell incorporated as a separate Jersey company. The first ICC has already been registered with the Jersey Financial Services Commission (JFSC), and more are in the pipeline.
With the Commission also approving its first Shari'a-compliant hedge fund this year, there is plenty of evidence that Jersey is maintaining its innovative approach to the funds industry, together with a growing level of specialisation. Since the launch of the Expert Fund Guide in 2004, more than 160 funds have been established in Jersey under the regime, which continues to gain profile and momentum within the international funds community. Expert Funds now constitute 10 per cent of all fund assets under administration in the island. However, there is no room for complacency. Working in consultation with industry representatives, the JFSC recently completed a 'house-keeping' review of the currently out for a one-month public consultation.
The industry and the Commission are also considering the introduction of a further category of regulation. Currently termed the 'Jersey Listed Fund Guide', this regime would be targeted at closed-ended funds that are listed on a recognised stock exchange.
Under planned regulatory changes, it is proposed to give Jersey fund administrators an enhanced platform on which to compete for business. The intention is to enable service providers to register to carry out funds business rather than go through the present system, which involves applying for separate permits for each of the funds they service.
In the long term it is intended to bring all the existing financial services legislation within a single law, the Financial Services (Jersey) Law, creating a one-stop shop that will make the island's legal framework easier to follow. Consultation is underway on these developments.
In the meantime Jersey's strategy of encouraging specialist fund managers to move to the island has been successful and a small number of London-based hedge fund managers have relocated both their funds and business to St. Helier to take advantage of the business and regulatory environment as well as lifestyle opportunities.
Within a hugely competitive global environment, Jersey has no intention of curbing the momentum it has generated for its funds industry and that has resulted in such an impressive increase in quality new business during the past three years.
Beverley Le Cuirot is Director of Marketing and Communications, Jersey Finance.
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