The Guernsey Financial Services Commission's
Registered Collective Investment Scheme Rules 2015
(the 2015 Rules) came into force on 1 April 2015,
updating and replacing the Registered Collective Investment Scheme
Under the 2015 Rules, registered collective investment schemes
may be offered directly to the public in Guernsey for the first
Collective investment schemes, which are regulated under the
Protection of Investors (Bailiwick of Guernsey) Law, 1987 (the
POI Law), can either be "authorised" or
"registered" by the Guernsey Financial Services
Commission (the GFSC). It is normally possible to
establish a registered fund within a shorter overall timetable than
an authorised fund (which can be helpful if time is an issue). The
GFSC does not carry out its own due diligence on the fund promoter
or fully review the fund documentation for a registered fund.
Instead, the GFSC relies upon representations and warranties in
that connection given to it by the Guernsey licensed administrator
for the proposed fund, who is responsible for making the fund
This lighter regulatory approach, described by the GFSC as a
"sea change", was first set out in the Registered
Collective Investment Rules 2008 (the 2008 Rules).
However, in view of the untried nature of the new approach, the
2008 Rules did not at first permit registered collective investment
schemes to be offered directly to the public in Guernsey.
The GFSC undertook to monitor the quality of the due diligence
reviews carried out by licensees in respect of their applications
for new registered collective investment funds. Six years after the
2008 Rules were introduced, it has concluded that the standard of
licensees' due diligence is good overall. As a result, the GFSC
is now prepared to lift the restriction on offering registered
collective investment schemes directly to the public in
The 2015 Rules are welcomed. Whilst a registered fund may be
used for a premium listing on the London Stock Exchange, there was
some uncertainty whether other exchanges would agree to list only
authorised funds as a result of the public offer restriction in
Guernsey. U.S. banking entities were also likely to be prohibited
under the Volcker Rule from sponsoring, investing in or having
certain relationships with an investment fund which could not be
sold to retail investors in its home jurisdiction.
With the exception of this change, the 2015 Rules make only
minor amendments to the 2008 Rules, including a change of
terminology from "designated manager" to "designated
administrator" (for consistency with the Authorised Collective
Investment Schemes (Class B) Rules, 2013) and some typographical
corrections. However, the GFSC notes that it is continuing to work
with the Guernsey Investment Fund Association on the overall
regulatory framework, and therefore we can expect further changes
to these rules in future.
As regards existing registered funds established under the 2008
Rules, the GFSC has agreed to the following explanatory
statement that may be used:-
"For the avoidance of doubt the Commission confirms that
existing registered funds may, notwithstanding the statement in
their offering document to the contrary, be offered to the public
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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