Investment Applications

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Applicable law

Regulatory permissions are issued under The Protection of Investors (Bailiwick of Guernsey) Law, 2020 ("the POI Law").

Associated legislation, codes and guidance

Applicants are advised that further relevant information can be accessed from 'Legislation and Guidance' in the Investment Supervision section of our website.

Applicable financial services

The investment sector in the Bailiwick provides a broad range of services including investment advice and management, promotion, fund management and administration, custody of assets to an international clientele and stockbroking. The International Stock Exchange Authority Limited, otherwise known as TISE, is headquartered in Guernsey with offices in Jersey and the Isle of Man.

Terminology

The term 'Scheme' in investment regulatory laws, rules and regulations has similar meaning to the term 'Fund', for example a mutual fund and a collective investment scheme have similar attributes.

Guernsey-established collective investment funds

Both open-ended and closed-ended funds have been established as a major investment segment in the Bailiwick for many years. All Guernsey domiciled funds must be authorised by, or registered with, the Commission, and all must be administered by a Guernsey-licensed administrator; open-ended funds must also have a Guernsey licensed custodian. To view the application process for Guernsey-established investment funds click on Authorised Open-ended Investment Schemes or, Authorised Closed-ended Investment Schemes or, Fast Track Regimes, as appropriate to the fund's structure.

Promoters of Guernsey funds

Promoters may represent many institutions based in other financial services centres internationally. New promoters must familiarise themselves with the policy and practice of fund proposals within the Bailiwick prior to submitting any applications. To view the New Promoter Assessment process please click on Fund Promoter Assessment.

Internationally-established funds

Overseas Funds: The investment sector in Guernsey also provides services, particularly fund administration, fund management and custody, to a wide range of investment funds domiciled in other jurisdictions.

Fund domicile migration: The Companies (Guernsey) Law 2008 makes provision for funds to be re-domiciled and established in Guernsey under Part VII Migrations Registrations of an overseas company as a Guernsey company. The provisions of Part VII of The Companies (Guernsey) Law 2008 must be addressed by the fund's principle parties in tandem with a submission of a fund application pack to Authorisations: we will consider how those provisions have been met as part of our authorisation process. For further details of the application process click on Authorised Open-ended Investment Schemes or, Authorised Closed-ended Schemes or, Fast Track regimes, as appropriate to the fund's structure. Our standard fund application fees will apply but no 'migration in' fee will be required by Authorisations. It is essential that before an application is submitted, the fund's principle parties reach a formal agreement with the Guernsey licensee who will provide fund administration services to the re-domiciled fund, as this will be asked for during the application process. This means the Guernsey licensee will also be able to give guidance on the Guernsey regulatory regime and application process. Please note, the Commission does not provide the service of company registration, so all enquiries should be directed to The Guernsey Registry.

Licensees

Licensees provide a diverse range of services including:

  • Alternative Investment fund management and administration;
  • Other fund management and administration;
  • Custody of assets;
  • Independent advice;
  • Private client and institutional stockbroking;
  • Non-fund portfolio management.

The following are key products managed and administered by licensees, for which further details can be accessed from:

  • Manager-Led Product: available here;
  • Private Investment Fund: guidance available here

For further details on the application process click in the margin on Standard Track Licensing or Fast Track Regimes, as appropriate to applicants' requirements.

Other investment vehicles

The following is illustrative of some technical investment vehicles for which applications may be submitted, however, it would be expected that applicants take appropriate legal advice before submitting an application.

Parallel Funds

These investment vehicles are generally formed to invest and divest in the same investments and at the same time as the main fund. They are formed under substantially the same terms as the main fund but with specific differences to accommodate the requirements applicable to the investors in the parallel fund.

Alternative Investment Vehicles

These are special purpose investment vehicles are formed to accommodate the structuring needs of the fund (or its investors) in connection with one or more particular investments. Unlike a parallel fund, which is designed as an umbrella entity for investors to participate as an alternative to the main fund, an alternative investment vehicle is formed so that investors who have subscribed to the main fund (or a parallel fund) can take advantage of efficient structures to hold specific assets if the fund is not the optimal investment vehicle for a particular investment.

Feeder Funds

These special purpose vehicles are formed by a fund to accommodate investment in the fund by one or more investors.

Co-Investment Vehicles

These are investment vehicles formed by the sponsor to co-invest alongside the fund (and its parallel funds) in specific fund investments. Unlike parallel funds or alternative investment vehicles, these do not necessarily have the same investment terms or fees as the fund.

Basket Authorisation or Registration

Where a fund is established as a Guernsey registered or authorised closed-ended collective investment scheme, has one or more closely associated vehicles of the types described above which in themselves have the attributes of a collective investment scheme (as set out in Schedule 1 to the POI Law), and the applicant so wishes, then the Commission would be prepared to consider an application to authorise or register the fund and the associated vehicle(s) together as one collective investment scheme.

Details of factors which might help demonstrate a close governance/operational association between individual elements should be provided to support any application for a basket authorisation /registration.  The Commission would expect such factors to at least include all of the following (where relevant): 

  • A common Administrator for individual elements of the basket;
  • Where relevant, a common General Partner for any partnerships making up the basket (or at least a direct association, for example a common ultimate parent, between the General Partners of constituent parts);
  • A common manager for individual parts of the basket;
  • Each constituent part should have a common accounting year end date and a common auditor, to facilitate timely submission of accounts for the basket as a whole (even if the accounts for constituent parts are not consolidated).

If these factors are not all present, but the applicant still considers there to be a close governance/operational association between individual elements, then evidence to support such a view should be submitted.

Other supporting information demonstrating the close association of the particular proposed elements of the basket should also be provided to support any such application – This could include:

  • details of the investment focus / objectives / policy of the individual elements and how these relate to (and the extent of any differences from) those of the scheme as a whole;
  • the particular reason for establishing the separate elements and why the applicant considers that they should form part of the same basket of entities rather than being separately authorised/registered under the POI Law.

The Commission will consider any application for a basket authorisation/registration on its own merits and therefore any other further supporting information relevant to a particular case should be provided.  

Applicants are reminded that this regime is offered only in cases where there is a valid and genuine close association between the individual elements making up the basket of entities to be authorised/registered as a collective investment scheme, and the Commission would expect any application to be able to clearly demonstrate that this is the case.  The regime is not to be used as a means for a vehicle to avoid regulation as a stand-alone collective investment scheme or of avoiding the application process or associated (and annual) fees of a stand-alone scheme, where there is no clear association between all constituent parts.

When applying for a basket authorisation/registration, applicants should be mindful that the name of the proposed scheme should be generic and applicable to all of its constituent parts, and it should not be simply named as one of the entities which will make up the basket.

Should the Commission issue its authorisation or registration in respect of such an application, the relevant letter will name the overall scheme as the entity which is authorised / registered and will also list the individual constituent elements which make up the scheme.  This will facilitate future additions (or removals) of elements to (or from) the basket of entities which make up the scheme as authorised/registered.

Where a scheme initially consists of a single entity at the time of application for authorisation/registration, but there is a known intention to apply to add further eligible entities to the scheme’s authorisation/registration at a future date, then it is expected that this should be made clear at the time of the initial application.  In such cases it is further expected that the name of the scheme should be generic and reflect the intention to add further constituent parts (as set out further above), from the start. This will avoid having to change the name of the scheme as such constituent parts are added to its authorisation/registration at a subsequent date.  This does not preclude existing schemes consisting of a single entity subsequently applying to convert to a basket authorisation/registration when subsequent eligible elements are formed, but in such cases a change of name to a more generic one will likely be required as part of the process.

Likewise, where an individual element of a basket authorisation/registration reaches the end of its life or otherwise becomes ineligible to form part of the basket, an application to amend the authorisation/registration to remove the relevant constituent part can be made. 

It is expected that all entities which constitute a basket authorisation/registration are subject to an annual audit, whether this be individually, on a consolidated basis with other constituent parts of the basket, or a combination of the two.  Any regulatory requirements for the submission of audited accounts for the scheme will not be considered to have been satisfied until the audited accounts covering all individual elements constituting the basket have been submitted.

A scheme which holds a basket authorisation/registration should be offered/promoted on the basis that the individual elements form part of a wider group of entities which together constitute the scheme, and any offering documents should make this clear, rather than inferring that each or any constituent part is an authorised/registered scheme in its own right.