The Guernsey Financial Services Commission (“the Commission”), with the assistance of a Working Party of practitioners from the investment business sector, has been preparing new Class B Rules for open-ended collective investment schemes authorised as Class B funds under section 8 of the Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended (“the Law”). The Class B Rules are primarily designed to apply to investment fund products that will not be affected by the AIFMD.
These Class B Rules replace those Rules prepared in 1990. Whilst the 1990 Rules have been subject to various amendments they have not previously been the subject of a detailed review. In light of amendments made to the rules relating to Class A open-ended collective investment schemes and the introduction of rules covering authorised closed-ended investment schemes and registered collective investment schemes, it was considered appropriate to conduct such a review of the 1990 Rules.
To assist the Commission and the Working Party, a consultation process was commenced on 10 February 2012, and concluded on 5 April 2012. However, consideration of possible changes to the rules was temporarily suspended in light of the substantive work being undertaken by, inter alia, the Commission relating to the EU’s Alternative Investment Fund Managers Directive (“AIFMD”). As that workstream progressed, it became clear that it would be more appropriate to introduce the two regimes together. Relevant Firms will therefore need to be conscious of the impact of AIFMD on applicable products as well as these Class B Rules.
There was a wide-ranging response to the consultation from service providers covering Guernsey’s investment business sector. The responses were of a high quality, all having been reviewed by the senior management team of the Commission’s Investment Supervision and Policy Division.
Due to the range of points addressed by respondents, it has not been possible to comment on each change and the Commission’s consideration of every representation made, however the main themes, and the results of the questions posed at consultation, are addressed in the Commission’s feedback paper.
These main themes were also discussed at a meeting held between Commission executives and representatives of the Guernsey Investment Fund Association together with a number of fund administrators and trustees.