Following consultation with representatives of the Jersey funds industry, the Jersey Financial Services Commission ("JFSC") has introduced an additional option to the range of possible fund regimes under which prospective fund promoters can launch a collective investment scheme.
This is the new Private Placement Fund ("PPF") regime.
Why was the PPF regime introduced?
The PPF regime is designed to offer fund promoters a fast track to launch closed ended investment vehicles which meet certain criteria.
The JFSC has undertaken to provide a response to applications within 72 hours without the need for the more in-depth regulatory review of the Private Placement Memorandum ("PPM") and promoters that is required under the existing regimes.
There are a number of criteria that the fund must meet to qualify for the PPF regime but the key ones are as follows:
- A PPF must be a closed ended fund
- A PPF can only be promoted to a maximum of 50 professional or sophisticated investors. A professional investor being someone with the proven experience to make an informed investment decision and a sophisticated investor being someone who invests a minimum of £250,000
- A PPF must have a Jersey Designated Service Provider ("DSP") holding an FSB licence as its administrator
- It can include Jersey and non-Jersey structures, although any non-Jersey structure must meet rules concerning Jersey based directors, trustees or general partners
- The PPF's promoter and PPM must meet certain standards and it is the responsibility of the DSP to certify that this is the case
The registration process
There is a single form for registration containing declarations by and information on the promoter, as well as details of principal persons and the draft PPM which is certified by the DSP.
On the back of this, the JFSC will provide the relevant consents and the PPF can proceed.
The JFSC will do its own regulatory checks and, as they reserve the right to take remedial action if these checks prove to raise concerns, the onus is on the promoter and the DSP to ensure that everything is in order before making the application.
Who will find this useful?
The new PPF regime should provide the flexibility to allow promoters to move quickly to take advantage of an investment opportunity, particularly where those fund promoters have access to a pool of core institutional or other sophisticated investors who are able to make their own informed investment decisions without the need for the added comfort of in-depth regulatory review.
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.