On 14th November 2007, the regulation of fund functionaries
acting for unclassified funds (other than a company issuing units)
was transferred from the Collective Investment Funds (Jersey) Law
1988 ('CIF' law), to the Financial Services (Jersey) Law
1998 ('FSJ' law) with a new class of business being created
called 'Fund Services Business'.
At the same time, Codes of Practice came into force, which
covers the responsibility of fund functionaries to demonstrate
appropriate levels of 'fitness and propriety' in areas such
Internal systems and controls
Within the grandfathering provisions of the transfer, those
entities that already held fund functionary licences under the
existing CIF legislation were automatically granted a licence under
the FSJ regime.
Entities providing 'Funds Services Business' could be
either those for whom it is their mainstream business, or
alternatively, it could be entities set up with the specific
purpose of holding the licence, but be 'managed' as a
client company of an island based service provider. The former will
naturally have all the necessary resource to fulfil their
obligations under the new Codes of Practice, however, the latter
will require the resource of the service provider who would be
registered as a Trust and Company business provider and hold
appropriate licences as currently exist under the FSJ law.
In recognising that many fund functionaries are effectively
'managed', the Jersey Financial Services Commission
('JFSC') has created another category of licence under the
'FSJ' law for which the manager of these entities must
register annually. This is called, Manager of Managed Entities
('MoME') and this entity will typically provide the
Compliance Officer, Money Laundering Reporting Officer, Directors,
and Secretary to the licence holder.
This new process simplifies the setting up of fund structures,
removing the need for fund functionaries to obtain a licence on
each occasion a fund is launched as previously existed under the
CIF law. It now only remains necessary to regulate the fund itself
under this regime if required (the recent introduction of an
Unregulated Fund regime has further simplified the process). The
regulation of functionaries has, therefore, been separated from the
regulation of the fund.
Moore Stephens Fund Administration Limited is regulated to
provide fund services business and can provide both MoME and fund
administration services. The above changes to the regulation of
fund functionaries, along with the introduction of the Unregulated
Fund regime, has made the creation of fund structures easier and
advanced Jersey's position as a leading offshore fund
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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