Non-Guernsey Funds

Local fund managers and custodians duly licensed may also provide services in relation to open-ended funds that are not incorporated or established in Guernsey and which do not require registration or authorisation under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. These services include management, administration and custody. The provision for these services from within Guernsey for such non- Guernsey open-ended funds allows fund promoters to choose the domicile with which they are familiar to launch their funds and to take advantage of the time zones that meet their investors’ needs.

The GFSC must give specific approval to a local licensee before that licensee may commence providing services in relation to a non-Guernsey open-ended scheme. In considering whether or not to approve such a proposal, the GFSC will take into account:

  • The protection and enhancement of the reputation of the Bailiwick as a financial centre;
  • the general nature and specific attributes of the controlled investment business to which the proposal relates; and
  • any other factors that the GFSC considers appropriate to consider. Normally, approval will only be given if the non-Guernsey open-ended fund would have been likely to obtain authorisation under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended.

Approvals Process for Licensees undertaking Administration and/or Management

The GFSC’s guidance note on the approvals process may be found here.  Licensees may choose to use a two-day fast-track approach for approval or the “traditional” approval approach.  A Form NGSF(2013) should be completed for the two-day fast-track approach and a Form NGS(2013) for the “traditional” approach.

Approvals Process for Licensees undertaking Custody

Notification of intention to act should be made to the GFSC by letter which should include a confirmation that no other local licensee is acting and include a copy of the prospectus/information memorandum for review. If unknown, the GFSC’s normal regulatory and other checks will be undertaken on the promoters and, if appropriate, certain other parties to the fund unless the fund may be regarded as a Qualifying Investor Fund and the local licensee chooses to apply using the fast track application regime.

Non-Guernsey open-ended schemes fall under the Licensees (Conduct Of Business And Notification) (Non-Guernsey Schemes) Rules 1994. Current fee scales are set out here.

The fund is subject to on-going reporting requirements.

Where the non-Guernsey fund is closed-ended, there is no fee and the scheme does not fall under the Licensees (Conduct Of Business And Notification) (Non-Guernsey Schemes) Rules 1994.

Exempt Non-Guernsey Funds

Under Section 29(1) of the Protection of Investors (Bailiwick of Guernsey) Law, 1987 (“the Law”), the Investor Protection (Designated Countries And Territories) Regulations 1989 and the Investor Protection (Designated Countries And Territories) (Republic Of Ireland) Regulations 1992 (“the Regulations”), Designated Territory status has been granted to:

  • The UK
  • Jersey
  • The Isle of Man
  • The Republic of Ireland

An applicant carrying on business in relation to collective investment schemes with a main place of business in any of the above does not require a licence under the Law to promote certain collective investment schemes in the Bailiwick, but must give prior notice to the GFSC by completion of Form EX.

Fees are payable for funds other than those domiciled in Jersey, an application fee and an annual fee which is reduced pro rata in the first year of approval.  Current fee scales are detailed here.

The Licensees (Conduct Of Business And Notification) (Non-Guernsey Schemes) Rules 1994 do not apply to such funds, but there is an on-going requirement to notify the GFSC by e-mail to [email protected] of any significant changes, including links to updated prospectuses and published annual report and accounts.

Schedule 2 to the Regulations defines the collective investment schemes established within each designated territory that are covered by the Regulations. These are open-ended schemes which are essentially the equivalent of Guernsey Class A funds. Funds which have been recognised in the UK (for example, a UCITS scheme) are also covered in practice.

Applications

Form EX  should be completed by potential applicants which must list all applicable schemes the applicant intends to promote within the Bailiwick. The following must also be provided in respect of each fund:

  • a copy of the latest prospectus and other promotional material which will accompany the prospectus;
  • a copy of the latest annual report of the scheme;
  • documentary evidence from the regulatory authority in the designated country or territory that the scheme is of a class or description specified in Schedule 2 to the Investor Protection (Designated Countries And Territories) Regulations 1989 and 1992.
  • the fees specified in the fee schedule. It should be noted that no fee is payable in respect of Jersey funds.

The completed Form EX must be accompanied by the signed Declaration and Undertaking.