Commission confirms decision to increase Private Investment Fund (PIF) options

20th April 2021

In December of last year, the Commission published a Consultation Paper containing proposals to amend the PIF rules to allow more investor categories to take advantage of an appropriately regulated fund structure.

All those responding to the Consultation Paper welcomed the proposals and in light this, the Commission has decided to amend the PIF rules with immediate effect. These are now available on the Commission’s website. A feedback statement addressing the consultation feedback has also been published and the Commission is grateful to everyone who contributed.

Whilst the current approach to registering a PIF will be retained, the revised rules will provide two new paths to enable a PIF to be created without an attached Protection of Investors Law (PoI) licensed manager. To use the second path, all investors will have to meet qualifying investor criteria which are designed to protect more vulnerable investors. At the time of application, the PoI licensed fund administrator will be required to provide confirmations equivalent to those currently provided by a fund administrator in respect of any Qualified Investor Fund (QIF) application.

A third path will enable a PIF to be created as a bespoke private wealth structure requiring a family relationship between investors. There will be no requirement to appoint a PoI licensed fund manager and at the time of application the PoI licensed fund administrator will need to provide confirmation that effective procedures are in place to ensure that the PIF is restricted to only eligible family-related investors.

All currently registered PIFs continue to be registered under the current “Path 1” regime which remains available to those wishing to raise money from broader categories of investor.

Commenting upon the decision, the Commission’s Director General, William Mason said: “I am pleased to be able to announce the implementation of these revised PIF rules which recognise the needs of the fund industry and its clients by introducing a greater degree of flexibility while continuing to ensure that appropriate levels of investor protection are observed. In deciding to make these changes, the Commission has listened to industry and other stakeholders, sought to ensure our regulation is proportionate to the needs to different investor groups and acted to ensure that the Bailiwick remains a good place to do business.”