Commission proposes deregulation of non-Guernsey Fund Scheme Rules

8th December 2020

The Commission has today published a Consultation Paper seeking feedback on proposals for changes to the Non-Guernsey Scheme regime. If the proposal is implemented it will see the current rules revoked.

A Non-Guernsey Scheme is a collective investment scheme that is not established or incorporated in the Bailiwick of Guernsey and is not authorised or registered by the Commission. The Law permits ‘Protection of Investors’ (PoI) licensees to act for Non-Guernsey Schemes without prior approval if they are authorised in Jersey, Isle of Man, United Kingdom or Ireland.

Speaking about the proposals, Martin McHugh, the Commission’s Deputy Director of its Investment, Fiduciary and Pension Division, said: “Currently the Non-Guernsey Scheme Rules require PoI licensees intending to carry out one of the restricted activities of management, administration or custody in connection with a relevant Non-Guernsey Scheme to give prior written notice to the Commission and receive approval before commencing those restricted activities. Approval must be sought in respect of each individual relevant Scheme. What the Commission is proposing in its Consultation Paper is that the Non-Guernsey Scheme Rules should be revoked in their entirety”.

If the revocation of the Non-Guernsey Scheme Rules is implemented, any entity undertaking a restricted activity in or from within the Bailiwick in connection with a collective investment scheme (wherever domiciled) will still be required to be licensed under the PoI Law.

In addition, the Commission would continue to monitor the type of investment business undertaken by regulated firms and the risks they pose to the Commission’s core functions, by extending the current annual return that PoI licensees complete to include information on activities undertaken in respect of all investment assets serviced in Guernsey.