Applicable law
Under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 ("the POI Law") open-ended schemes are declared as authorised or registered under Section 8 of the POI Law.
Applicable rules
Rules which apply to the method of operation of authorised open-ended collective investment schemes:
- The Collective Investment Schemes (Class A) Rules 2002*;
- The Authorised Collective Investment Schemes (Class A) Rules 2008*;
- The Authorised Collective Investment Schemes (Class B) Rules and Guidance, 2021 ("the Class B Rules");
- The Collective Investment Schemes (Qualifying Professional Investors Funds) (Class Q) Rules and Guidance, 2021 ("the Class Q Rules").
*Applicants considering applying for a Class A Scheme must contact Authorisations before formalising an application. Class A Schemes have been largely superseded by the AIFMD regime. Please see the investment supervision section of our website.
Terminology
The term 'Scheme' in investment regulatory laws, rules, and regulations has similar meaning to the term 'Fund'. To illustrate the same, 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 persons
Every Guernsey authorised open-ended investment scheme must appoint a designated administrator/manager to conduct the day-to-day administration of the fund, and a designated custodian/trustee to undertake custodial duties and perform oversight of the designated administrator/manager. Both of these designated persons must be established in Guernsey and licensed under the POI Law.
Designated persons are normally selected from firms with established track records in the field. 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 the prospective designated persons 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 demonstrate to the Commission that all parties are fully aware of the disclosures contained within the prospectus.
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 in 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: this 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 and, therefore, not an exhaustive list. Other criteria may need consideration.
Fund application
Application form 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.
Application 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 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 explaining the necessity and demonstrating how investor protection will be maintained.
Application fee
The fee is non-refundable and 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
Which may include:
- Trust Deed;
- Memorandum and Articles of Incorporation;
- Management Agreement;
- Custodian Agreement;
- Administration Agreement;
- Investment Advisory Agreement;
- Registrar's Agreement;
- Sub-Custodian Agreement;
- Delegation Agreement.
Certificates
Class B Schemes: receipt of a certificate from the Manager or an approved law firm certifying the information scheduled in the Class B Rules.
Class Q Schemes: receipt of a letter from the Manager certifying the information scheduled in the Class Q Rules.
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 be 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 which are to be imposed upon the authorisation of open-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, and an invoice will be sent by email.
The designated administrator/manager is normally deemed to be responsible for the payment of all fees.