Authorised Closed-ended Investment Schemes

New Applicants

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Applicable law

Under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 ("the POI Law") closed-ended schemes are declared as authorised or registered under Section 8 of the POI Law.

Applicable rules

The Authorised Closed-Ended Investment Schemes Rules and Guidance, 2021.

Terminology

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

Specific criteria and principles

The following information is in addition to the guidance found at New Applicants.

Incorporated Cell Companies (“ICCs”) and Protected Cell Companies (“PCCs”)

Funds to be established as an ICC or a PCC require our separate formal consent in order that the vehicle can be registered with the Guernsey Registry.

Designated administrator/manager

Every Guernsey authorised closed-ended investment scheme must appoint a designated administrator/manager to conduct day-to-day administration. The designated administrator/manager must be established in Guernsey and licensed under the POI Law.

Designated administrators/managers are normally selected from firms with an established track-record in the business. Where an applicant seeks to appoint a newly licensed entity, the proposal to appoint must be discussed with Authorisations in advance of a formal application being submitted.

Applicants must engage with the prospective designated administrator/manager at an early stage in the application process, as those parties are required to countersign the application forms: this is to signify their support of the application, and also demonstrates to the Commission that they are fully aware of the disclosures contained within the prospectus.

There is no requirement to appoint a designated custodian/trustee to undertake custodial duties. However, arrangements for the custody of assets must be provided, and details of the same disclosed in the fund's documentation.

New parties

Where Promoters and their principals are not known to the Commission but are to be associated with the scheme, additional documentation will need to be submitted, as specified on the New Promoter’s Introductory Checklist.

Known parties

If the promoter is already known to the Commission, or has received a positive response after submitting a New Promoter's Introductory Checklist, the amount of documentary information required by Form GFA (and the time taken for it to be processed) should be considerably reduced.

Documentation

Scheme particulars (or equivalent offer document) must evidence:

  • An adequate spread of risk;
  • Comprehensive risk warnings;
  • That the investor profile is consistent with the fund’s objectives and minimum subscription levels;
  • That all material facts, including fees and the names of associated parties, are fully disclosed in the scheme's particulars.

The above is indicative rather than being an exhaustive list; other criteria may need consideration.

Fund application

Application and supporting documentation

The application is to be made on the Application portal, the application should be completed and submitted including uploading the supporting documentation where requested as part of the application questions. 

Fee

The non-refundable application fee must be submitted at Stage Two.

Application process

We will assess and review the application and inform the applicant, or its professional advisers, of any matters requiring expansion and/or clarification. Once all queries have been satisfied, the application will be referred to a decision-maker. A formal response will follow decision-making.

Business plans

Plans should be well advanced prior to the application's submission. Any provisional matters should be clearly stated. Late changes to a scheme may result in the application being delayed, or in extreme cases, refused.

Derogations or modifications

The onus is on the applicant to identify whether there is a need to apply for derogations from, or modifications of, the rules. Detailed requests are to be made at this stage explaining the necessity and demonstrating how investor protection will be maintained. 

Application fee

The non-refundable application fee is payable at this stage.

Establishment

Evidence that the scheme has been formed, e.g. a certificate of establishment or incorporation.

Documentation

Receipt of dated and signed, or certified copies of all final documents:

Prospectus

Constitutive documents: These may include:

  • Trust Deed;
  • Memorandum and Articles of Incorporation;
  • Management Agreement;
  • Administration Agreement;
  • Custody Agreement;
  • Investment Advisory Agreement;
  • Registrar's Agreement;
  • Delegation Agreement.

 

Timeframe

We aim to respond to applicants within 45 business days of receipt of a fully completed application. The timeframe is indicative only; we are not in any way bound by it.

Application quality

The response time may be advanced or substantially delayed depending on the quality of the submitted application.

Written response

We will send a written response detailing any matters that require expansion and/or clarification to enable the application to be referred to a decision-maker. If the application has been made through the application portal, all responses will be sent inside of the portal.

If we receive no response to these queries within a three-month time period, we reserve the right to archive the application, such that, any future licence application following this period would require a new submission. Applications that remain in draft format, without being submitted, on the application portal will be removed after three months.

 

Application conclusion

Authorisation

Successful applicants will be issued with authorisation in the form of a letter.

Conditions and derogations

Any formal conditions to be imposed upon the authorisation of closed-ended investment schemes, along with any derogations from, or modifications of, the rules will be incorporated into the final authorisation letter.

Annual fee

Upon authorisation, the annual fee becomes due. This is reduced pro rata in the first year: an invoice will be sent by email.

The designated administrator/manager is normally deemed responsible for the payment of all fees.