We can offer general comments as to the activities covered by the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended and the rules and regulations made thereunder, but we cannot provide legal advice in respect of specific circumstances. If you are in doubt, you should seek advice from a lawyer qualified in Guernsey law.
A policy of selectivity is applied to promoters/sponsors of open or closed ended schemes: only those with a demonstrable and favourable track record in the promotion of established collective investment schemes will be considered acceptable to establish schemes.
The authorisation of intended promoters/sponsors by regulatory authorities in other jurisdictions is not, in itself, generally sufficient. We aim to enable innovative strategies whilst maintaining meaningful investor protection. We are always prepared to meet potential promoters/sponsors or their professional advisers in order to discuss matters of policy and practice regarding proposed open or closed ended schemes. Please email Authorisations with an outline of your proposals in the first instance, so that an assessment can be made of which technical staff should attend any future meeting.
Under section 8 of the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended (“the Law”) both open-ended and closed-ended schemes can apply to be authorised or registered.
Both authorised and registered schemes must appoint a local licensed designated administrator/manager to conduct the day to day operations of the scheme. Whereas the designated administrator/manager must conduct due diligence on the promoter of any scheme it proposes to administer, in addition in respect of a registered scheme, the designated administrator/manager is required, at application, to sign a declaration that it has undertaken that due diligence: for further details refer to Guidance on Registered Collective Investment Schemes. The declaration also confirms that the designated administrator/manager confirms that it is content with the disclosures in the scheme’s prospectus/offer document as meeting the requirements of the Prospectus Rules 2008.
We attach great importance to these declarations and expect applicants to be able to demonstrate that they have documentary evidence to support the confirmations given, and to be able to produce that evidence immediately should we request it. Failure to support a declaration by documentary evidence might be taken into account by us in assessing ongoing fitness and properness under schedule 4 to the Law. Consequently, because the designated manager has to provide these confirmations to the Commission we are able to declare the scheme registered within three working days of receipt.
Open ended schemes and closed-ended schemes may be constituted as:
- Incorporated cell companies;
- Limited partnerships;
- Protected cell companies; or
- Unit trusts.
The choice of constitution is a commercial decision for the applicant to determine, however, use of a limited partnership for an open-ended scheme would require further discussion with Authorisations. Incorporated and Protected cell companies are similar to umbrella schemes but are incorporated as companies not as unit trusts. The assets of each cell may not be combined with the assets of another cell and must be kept legally separate. Irrespective of the nature of the constitution of the scheme similar application processing applies.
Approval to act for a non-Guernsey scheme is granted at licensee level, i.e. to the licensee undertaking administration, custody or management of the non-Guernsey scheme and not to the fund itself. The reason is that the non-Guernsey scheme does not have a registration or authorisation with the Commission and the approval given is personal to the licensee undertaking the relevant activity. When a change of service provider is proposed a new application form is required together with all relevant fund documentation and accompanying fee for each scheme.