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Registered regime helps Guernsey fund assets to new record

The introduction of a registered regime for closed-ended investment schemes has helped send the value of funds under management and administration in Guernsey to a new high of more than GBP140bn, according to the island's financial services promotional agency GuernseyFinance.

Figures from the Guernsey Financial Services Commission indicate that the level of assets reached GBP140.4bn at the end of March, an increase of GBP10.2bn (7.8 per cent) from the GBP130.2bn recorded at the end of 2006 and a year-on-year rise of GBP29bn (26 per cent).

The registered closed-ended investment funds regime has been in operation since February 1 this year and eight such funds received consent in the two months to March 31, with a further 10 following suit so far since then.

Says GuernseyFinance chief executive Peter Niven: 'These figures clearly show that the registered closed-ended funds regime is proving very popular, and it has enabled us to continue to experience the superb levels of growth that were the hallmark of 2006.'

Niven says the fact that the Channel Islands Stock Exchange has just announced its 2000th security listing adds to the lustre surrounding Guernsey's funds industry.

Guernsey-domiciled closed-ended funds grew by GBP7.9bn (16.3 per cent) over the quarter and GBP22.6bn (66.9 per cent) year-on-year to reach GBP56.4bn, while open-ended funds grew by GBP2.1bn (3.7 per cent) over the first three months of the year and by GBP5.2bn (9.7 per cent) over the 12-month period to reach GBP58.7bn, taking the combined value of Guernsey-domiciled funds to just over GBP115bn.

The assets of non-Guernsey schemes for which some aspect of management or administration is carried out on the island increased by GBP200m (0.9 per cent) over the quarter and by GBP1.3bn (5.4 per cent) during the year to GBP25.3bn.

Peter Moffatt, the commission's director of investment business, says: 'The record level of fund approvals seen in 2006 shows no signs of slowing down. There is a continuing flow of enquiries and expressions of interest from both new promoters and promoters already represented through their existing Guernsey funds.

'The Registered Closed-ended Investment Fund Regime, which was only introduced in February, has already been extensively used by local fund administrators to service the needs of their clients.'

Adds Niven: 'It is pleasing to see the success of the registered closed-ended funds regime, because it is just the first part of a series of enhancements that are being made to Guernsey's funds environment to encourage further increases in business flows into the island.'

The registered closed-ended funds regime introduced in February has its origins in a root-and-branch review of investment sector legislation by a working party under the stewardship of leading Guernsey advocate Peter Harwood.

The Harwood Report recommended the categorisation of funds into regulated and registered funds, proposing that for registered funds the focus of regulation should be on the licensed Guernsey administrator, reducing the number and scope of funds that would be regulated directly.

The registered closed-ended funds regime shifts the burden of responsibility for reviewing the promoter, the investment manager and the prospectus or admission document from the regulator to the proposed Guernsey licensed fund administrator.

The remainder of the proposals emanating from the Harwood Report are set to come into force later this year and in early 2008.

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