A new private placement fund regime has been introduced in
Jersey, with the issue of the Jersey Private Placement Fund Guide
by the Jersey Financial Services Commission (JFSC). The Guide,
which applies to closed-ended Private Placement Funds (PPFs), is
set to revolutionise the Jersey funds industry. it relaxes the
JFSC's traditional 'promoter test', against which the
JFSC vets new promoters of funds, making it much simpler for new
and existing promoters to establish funds in Jersey. it also offers
a streamlined 72-hour authorisation process for the approval of
funds which meet the PPF criteria.
PPFs can be offered to up to 50 potential investors anywhere in
the world. investors must be 'professional investors',
'sophisticated investors' or investment Managers acquiring
an interest in the PPF on behalf of non-professional or
The PPF regime is available to funds which satisfy the following
The PPF must be a closed-ended fund which is established or
managed in Jersey.
The PPF, which can be set up as a company, a unit trust or a
limited partnership, must have at least two Jersey residents with
appropriate experience on the board of directors of the fund, the
trustee or manager or the general partner of the fund, as
applicable. The same applies to a PPF established outside Jersey,
unless that fund appoints a Jersey-based manager with at least two
Jersey residents on its board of directors.
The PPF's promoter must meet certain suitability
requirements as to, for example, regulation in its jurisdiction of
establishment and no history of disciplinary sanctions.
The PPF must appoint a 'Designated Service Provider'
(i.e. a Jersey administrator licensed to conduct fund services
business), with responsibility for: carrying out due diligence in
relation to the promoter; providing the registered office of a
Jersey corporate fund or limited partnership, the trustee or
manager of a Jersey unit trust or, in the case of a non-Jersey
company, its manager; providing the Money Laundering Reporting
Officer and Money Laundering Compliance Officer and supporting the
PPF in relation to its Jersey anti-money laundering
The private placement memorandum issued by the PPF must comply
with the disclosure requirements set out in the guide; however
there are no mandatory investment or leverage restrictions
applicable to PPFs.
The PPF must prepare accounts in accordance with any generally
accepted accounting principles and they must be audited.
The launch of the guide is timely, given the focus of the
investment funds community on the alternative Investment Fund
Managers (AIFM) Directive. The AIFM Directive preserves the ability
for Jersey (and other 'third country') private placement
funds to be offered to professional investors in the EU, subject to
national private placement regimes, until at least 2018.
it is anticipated that the new PPF regime will be of particular
interest to promoters of specialised and alternative investment
funds aimed at sophisticated and professional investors, including
private equity, mezzanine, infrastructure and real estate
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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