Jersey: Unregulated Funds In Jersey

Last Updated: 5 November 2008


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


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.


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.


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


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.


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 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.


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.


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


Jonathan Heaney, Partner

Cayman Islands
Jonathan Tonge, Partner
Mark Lewis, Partner

David Whittome, Partner

British Virgin Islands
Richard May

Hong Kong
Philip Millward, Partner
Carol Hall, Partner

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.

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