Jersey has introduced two new classes of investment fund that can be established without regulatory approval under its funds legislation.
Jersey has introduced two new classes of investment fund that can be established without regulatory approval under its funds legislation. The new regime, which is accessible with immediate effect, is intended to offer to European fund promoters in particular an alternative to jurisdictions in and around the Caribbean, notably the Cayman Islands.
According to Robert Kirkby, technical director of financial industry promotional agency Jersey Finance, the Unregulated Funds regime provides promoters with certainty, flexibility and speed when establishing new funds and complements the range of existing regulated fund structures already available in Jersey.
‘Jersey is now a much more attractive prospect for the typical hedge fund or private equity manager who invariably wants a fund set up and ready to trade in short timescales with no local minimum regulatory input,’ Kirkby says.
‘When combined with Jersey’s convenient time zone and its existing reputation for funds business, we believe the new regime is a welcome addition to our capabilities as a funds jurisdiction and will be particularly attractive to European managers and promoters.’
Unregulated Funds have no audit requirement, no limit on number of investors, no investment or borrowing restrictions and no requirement to use Jersey service providers. A choice of fund vehicles is available including company, protected cell or incorporated cell company, unit trust or limited partnership.
There are two categories of Unregulated Funds. Unregulated Eligible Investor Funds may be open-ended or closed-ended and are restricted to sophisticated investors, a definition that includes those who make a minimum initial investment or commitment of USD1m or equivalent.
Unregulated Exchange Traded Funds must be listed on one of 50 pre-approved stock exchanges including London, New York, the Channel Islands Stock Exchange, AIM, Nasdaq and Euronext, and do not carry a minimum investment restriction.
‘Since Jersey announced its intention to launch the unregulated model alongside its existing fund categories, there has been considerable interest from the market, and we anticipate it will be only a short time before the first funds in these classes are established,’ Kirkby says.
‘Jersey has been experiencing record growth in fund assets under administration and in particular has attracted considerable new business in the alternative fund sector, which now accounts for more than half the total value of the fund industry.
‘The streamlined regulatory regime, which began with the introduction of the Expert Funds Guide in 2004, has been one of the driving forces behind this growth and the introduction of unregulated categories now completes the island’s regulatory offering for the funds industry.’
