Promoters of authorised funds, whether open-ended or closed-ended, which will be offered to qualified investors may take advantage of the qualifying investor fund or “QIF” fast-track application process.
Open-ended QIFs are subject to the Class A, Class B or Class Q Rules and the QIF Guidelines published by the GFSC. Closed-ended QIFs are subject to the Closed- Ended Rules and the QIF Guidelines.
There is also a three day approval process for authorised funds established as QIFs in Guernsey. This fast track approval process is available to all authorised funds, whether open or closed-ended. This fast track process is similar to the registration by the GFSC of a “registered” fund.
The criteria which must be met in order to establish a QIF in Guernsey is set out in a GFSC guidance note dated May 2007. It should be noted that the GFSC strictly monitors the self-certification by administrators of fast-tracked funds. Regular checks are undertaken and steps taken to ensure that administrator’s due diligence standards are maintained. There is general recognition that the self-certification process has to be properly regulated by the GFSC to ensure that the reviews undertaken by a Guernsey fund administrator are at least as comprehensive as those undertaken by the GFSC. QIFs must only be offered to qualified investors (detailed below). The QIF’s Guernsey administrator must be able to certify compliance with the GFSC’s QIF requirements. Approval will be given by the GFSC on the basis of the administrator’s self-certification. The Guernsey administrator will have an ongoing responsibility to monitor compliance with the matters it has self-certified and to ensure its rationale for the self-certification is clearly documented.
A “qualified investor” is defined as a “professional investor”, an “experienced investor” and/or a “knowledgeable employee”. Definitions of the different classifications of investors are:
The GFSC will expect a representation to be made by the relevant investors in the fund’s application form that the requirements described above in relation to the definition of a qualified investor have been satisfied.
The administrator will need to certify (in relation to the promoter and/ Applications for newly formed promoters or investment managers will also be acceptable, provided that the administrator is also able to certify the track record of the relevant principals.
The GFSC will also require that promoters or investment managers are fit and proper. The basis of how the relevant promoter or investment manager will qualify as fit and proper is set out in detail in the relevant GFSC QIF Guidance Note.
The QIF regime is complemented by a fast track process for consideration of any local fund manager’s licence application. A local fund manager is not legally required, but where the fund structure includes a Guernsey fund manager or the fund is structured as a limited partnership and has a Guernsey general partner, the GFSC will process the application for the licence of such entity (again with reliance on the administrator’s certification) under the fast track licensee application process and put it before the GFSC’s Licensing Committee within 10 business days of receipt.
Application to the GFSC is made by submitting the prospectus or private placement memorandum, Form QIF, the constitutional and third party material contracts, a cheque in payment of the GFSC’s fee and, where relevant, any administration self-certification documents.