Guernsey is moving to cut the approval time for funds aimed at professional, experienced and knowledgeable investors to within three working days.
The Guernsey Financial Services Commission has commenced public consultation on a proposal to streamline the approval process for both open and closed-end funds aimed at these investors.
Peter Neville, Director General of the Guernsey Financial Services Commission said: "This latest initiative, developed in conjunction with the investment funds industry, is designed to assist promoters and sponsors of investment vehicles aimed at professional, experienced and knowledgeable investors by giving greater certainty over the approval timetable, while maintaining the fundamental qualities which have made the investment fund sector such an important element of financial services in Guernsey. The proposal also demonstrates the Commission's continuing commitment to pragmatic regulation."
The main thrust of the proposal is that the Commission will grant the required fund approval within three working days, provided that an appropriately licensed Guernsey applicant has certified to the Commission that:
* they have conducted due diligence on the promoter and associated parties, and find them to be fit and proper;
* the fund will be restricted to professional, experienced and knowledgeable investors; and
* they are satisfied about the fund's economic rationale and that any risks associated with the vehicle are clearly disclosed.
John Le Prevost, Chairman of the Guernsey Fund Managers Association ("GFMA"), said: "The fund industry strongly welcomes these proposals which are aimed at speeding up the authorisation of certain types of new investment funds by allowing Island service providers to self-certify that the application for authorisation already satisfies a prescribed set of criteria. The industry is in the process of agreeing with the Commission the exact terms of the 'prescribed set of criteria', which will form part of the short consultation process just announced."
"With an ever increasing flow of new funds into Guernsey these proposals should greatly enhance the speed with which the Commission's staff can authorise a new fund by avoiding them having to duplicate review processes which industry has already carried out."
"Firstly, these new proposals will allow the Commission to recognise the due diligence on new funds and affiliated parties which all service providers are to continue to carry out."
"Secondly, service providers will self-certify that a new fund's prospectus and constitutive documentation are 'compliant' with all applicable regulations so that the Commission can issue its authorisation almost immediately; and without need to review such documents first."
"The combined benefit of these two 'changes' to the existing authorisation process will mean the industry can provide for a quicker launch process and can, with a far higher degree of certainty, advise a sponsor as to timing of launch."
"We view this particular proposal as the first of a series of enhancements to current practises the industry is discussing with the Commission for implementation."
He concluded: "These proposals together with the recent relaxation regarding prime brokers for hedge funds and the popular protected cell company structure pioneered by Guernsey, all contribute to Guernsey's reputation as a premier jurisdiction for fund business."
The detailed consultation paper is available on the Commission website at www.gfsc.gg  or direct from the Commission: Guernsey Financial Services Commission La Plaiderie Chambers La Plaiderie St Peter Port Guernsey GY1 1WG.