Jersey: Unregulated Funds In Jersey

Last Updated: 5 November 2008

INTRODUCTION

Unregulated Funds are designed to provide the fund's industry with a fast and efficient way of establishing and launching certain types of investment vehicle in Jersey. An Unregulated Fund is a Jersey domiciled fund that is either to be offered to certain eligible investors only or is listed on an approved exchange or market. The Unregulated Fund regime consists of two different fund types, the Unregulated Eligible Investor Fund and the Unregulated Exchange Traded Fund. Under the new regime:

  1. there will be no need for either type of fund to engage Jersey administrators, directors or custodians;
  2. the Jersey Financial Services Commission ("JFSC") will not enforce their promoter policy in relation to Unregulated Funds, whereby the JFSC needs to be satisfied as to the track record, experience and reputation of the promoters or the investment manager of the fund;
  3. there is no requirement for local audit sign-off (ie from Jersey based auditors);
  4. existing regulated funds will not be able to convert into either of the new categories;
  5. there are no investment or borrowing restrictions (subject to any stock exchange restrictions for a listed vehicle);
  6. Unregulated Funds may take the form of a company, limited partnership or a unit trust; and

UNREGULATED ELIGIBLE INVESTOR FUND

The key features of this type of unregulated fund are:

  1. such funds may be open or closed-ended;
  2. the units of an Unregulated Eligible Investor Fund may only be offered to Eligible Investors (see below).
  3. the units may be listed, though only on exchanges or markets that permit transfer restrictions to ensure that only Eligible Investors may acquire the units.

The term "Eligible Investor" includes:

  1. any person who agrees to invest not less than US$1,000,000.00, or the equivalent in another currency;
  2. a person whose ordinary business or professional activity includes or could be reasonably expected to include the acquisition, underwriting, management, holding or disposal of investments, whether as principal or agent or the giving of advice on investments and employees, directors or shareholders of, or consultants to, such persons;
  3. a functionary in relation to the fund or an associate of such a functionary (eg the investment manager administrator, trustee etc);
  4. employees, directors or shareholders of, or consultants to, a functionary or associate, who in making the relevant subscription acquires units in the fund as remuneration, or reward, as such an employee, director or shareholder or consultant;
  5. an individual whose property has a total market value of not less US$10,000,000.00 or the equivalent in another currency;
  6. a company, partnership, limited partnership or limited liability partnership, trust, or unincorporated association, which owns property with a total market value of not less than US$10,000,000.00 or the equivalent in another currency or every shareholder of the company, every partner of the partnership, limited partnership or limited liability partnership, every beneficiary of the trust or every member of the association (as the case requires) is, himself or herself, an Eligible Investor;
  7. a wholly-owned subsidiary of a company specified above;
  8. trustees of certain trusts established for the benefit of an Eligible Investor; or
  9. a person acting as or for a public sector body.

UNREGULATED EXCHANGE TRADED FUND

The key features of this type of unregulated fund are:

  1. such funds are only available to a closed-ended vehicle that is listed on an exchange or market that has been approved by the JFSC, which includes the London, Irish and Channel Islands Stock Exchanges among others (see below).
  2. there is no restriction on the number or type of investors;
  3. there is no minimum investment requirement.

GOVERNMENT FEES

Other than the fees payable to incorporate or form the relevant entity, there are no fees payable to register as an Unregulated Fund.

JERSEY FUNCTIONARIES/SERVICE PROVIDERS

There is no requirement to appoint any Jersey based functionaries or service providers to an unregulated fund. A Jersey company or limited partnership must however have its registered office in Jersey and a unit trust must have a Jersey company as a trustee (or general partner in the case of a limited partnership). It is not necessary to appoint Jersey resident directors to an Unregulated Fund that is a Jersey company, although they may be appointed, for example, pursuant to any tax structuring requirements. There is also no requirement that the directors of an Unregulated Fund that is a Jersey company be independent from the promoter.

All Jersey based functionaries to an Unregulated fund must have an appropriate fund services business registration under the Financial Services (Jersey) Law 1998 ("FSJL"). The term "Jersey Functionaries" for the time being includes the general partner or trustee as well as providers of a registered office to an Unregulated Fund. An exemption form the FSJL for general partners and trustees or Unregulated Funds is expected by early May 2008.

APPLICATION PROCESS FOR AN UNREGULATED FUND

The filing of a notice with the JFSC is the only process required to exempt the fund from the application of the Collective Investment Fund (Jersey) Law 1988 ("CIF") and the FSJL. The notice must:

  1. list certain basic features of the fund (name, registered office etc); and
  2. declare that the fund qualifies as an Unregulated Fund and meets the necessary criteria.

An Unregulated Fund may be launched immediately after the above filing has been made at the JFSC, assuming that all other conditions of Unregulated Fund status are also satisfied.

THE OFFERING MEMORANDUM

The offering memorandum must contain certain investment warnings stating that the fund has not been reviewed nor is it subject to regulation by the JFSC. Proposed investors must receive and sign an appropriate investment warning (which is usually contained within the subscription agreement.) Unregulated Funds are required to comply fully with applicable anti-money laundering legislation in Jersey.

Other than this, there are no Jersey requirements except as to the general principles in respect of disclosure of any material information to investors.

REGULATORY FILINGS

There are no requirements to file the details of any changes of functionaries or directors or any amendments to the offering memorandum. An Unregulated Fund structured as a company is required to complete and file an annual return in accordance with the Companies (Jersey) Law 1991.

RECOGNISED STOCK EXCHANGES AND MARKETS

Unregulated Exchange Traded Funds must be listed on one or more of the following exchanges:

Australia: Australian Stock Exchange

Hungary: Budapest Stock Exchange

Singapore: Singapore Exchange

Austria: Wiener Bourse

Iceland: Iceland Stock Exchange

Slovakia: Bratislava Stock Exchange

Belgium: Euronext

Ireland: Irish Stock Exchange

Slovenia: Ljubljana Stock Exchange, Inc

Bermuda: Bermuda Stock Exchange

Italy: Borsa Italiana

South Africa: Johannesburg Stock Exchange

Bulgaria: Bulgarian Stock Exchange

Japan: Osaka Securities Exchange and the Tokyo Stock Exchange

South Korea: Korea Stock Exchange

Canada: Bourse de Montreal Inc or the Toronto Stock Exchange

Latvia: Riga Stock Exchange

Spain: Bolsas y Mercados Espanoles

Channel Islands: Channel Islands Stock Exchange

Lithuania: National Stock Exchange of Lithuania

Sweden: Stockholmborsen

China: Hong Kong Exchanges and Clearing Limited

Luxembourg: Bourse de Luxembourg

Switzerland: Swiss Stock Exchange

Cyprus: Cyprus Stock Exchange

Malta: Malta Stock Exchange

United Kingdom:

Alternative Investment Market

The London Stock Exchange

Czech Republic: Prague Stock Exchange

Mexico: Bolsa Mexicana de Valores

Denmark: Copenhagen Stock Exchange

Netherlands: Euronext

United States of America:

American Stock Exchange

Chicago Stock Exchange

Estonia: Tallinn Stock Exchange

New Zealand: New Zealand Stock Exchange

Finland: Helsinki Stock Exchange

Norway: Oslo Bors

National Association of Securities Dealers Automated Quotations ("NASDAQ")

New York Stock Exchange

Pacific Exchange

Philadelphia Stock Exchange

France: Euronext

Poland: Warsaw Stock Exchange

Germany: Deutsche Bourse

Portugal: Lisbon Stock Exchange

Greece: Athens Stock Exchange

Romania: Bucharest Stock Exchange

 

Jersey
Jonathan Heaney, Partner

Cayman Islands
Jonathan Tonge, Partner
Mark Lewis, Partner

London
David Whittome, Partner

British Virgin Islands
Richard May

Hong Kong
Philip Millward, Partner
Carol Hall, Partner

Dubai
Rod Palmer, Partner

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.