Jersey has established itself as a well regulated international
finance centre for investment funds with a wealth of fund
administrators, banks and accountants.
At the end of June 2014, Jersey was reported to have Ł200
billion of assets under management, 1,283 regulated funds and 202
unregulated funds. Jersey and Guernsey had also established the
Channel Islands Securities Exchange Limited.
Jersey now offers an attractive range of investment funds
(unregulated and regulated) for all types of investors. This wide
range reflects the history of the Jersey funds industry dating back
to the 1980s.
There are now eight categories for regulatory purposes. These
are as follows: -
Category of Fund Regulatory Treatment
There is presently a wide spread of funds under management in
Jersey such as property, equities, bonds, money market, commodities
and futures and debt funds.
Fund Legistation and Regulation
Jersey funds are regulated under the Collective Investment Funds
(Jersey) Law 1988 (the "Funds Law") as amended. The most
highly regulated funds, which fall under the Funds Law and require
a certificate, include expert funds, listed funds, unclassified and
regulated funds ("Certified Funds"). Funds that are
regulated to a lesser degree include Very Private and Private
Placement Funds requiring a consent under the Control of Borrowing
(Jersey) Order 1958 (the "1958 Borrowing Order").
Unregulated funds are subject to the least regulation.
The Jersey legislation has been supplemented by changes brought
about by the Alternative Investment Fund Manager Directive (the
"AIFMD"), which will need to be complied with when funds
are marketed to an EU/EEA member state.
Jersey based "functionaries" (including fund managers,
administrators, investment managers or advisers) are regulated
under the Collective Investment Funds (Recognised Funds) (Rules)
(Jersey) Order 2003 and the Financial Services (Jersey) Law 1998 as
amended for other funds as providers of fund services
The salient points in respect of the revocable, capital trust
are as follows:
Jersey has made a commitment to ensure international tax
transparency and in July 2013 received praise from the Secretary
General of the OECD concerning Jersey's position on
international tax transparency.
Jersey is on the white list of the G20 offshore
Jersey holds designated territory status under the UK Financial
Services and Markets Act 2000.
Jersey is recognised as a "Qualified Intermediary"
jurisdiction by the US Internal Revenue Service.
Type of Structure
Jersey funds may be set up as limited partnerships, companies
and unit trusts. There are different types of limited partnership
(separate limited partnerships, incorporated limited partnerships
and limited liability partnerships) and various forms of companies
(such as protected cell companies and incorporated cell
For the purpose of Jersey regulation, an open-ended fund refers
to an investment vehicle that permits its investors to continuously
issue and redeem equity holdings at a price related to the value of
the underlying assets. A closed-ended fund means a fund that is not
open for redemptions at the option of the investors.
A detailed consideration of types of structure appears towards
the end of this paper.
Categories of Funds
In deciding which category of fund to establish, fund promoters
should carefully consider their reputation, ownership, track record
and financial standing. New promoters with no track record or
experience should consider unregulated funds as a starting point if
they do not wish to market that fund to an EU/EEA member state.
The JFSC has published policy on promoters of public and private
collective investment funds. That policy document does not apply to
Unregulated Funds, Listed Funds, Expert Funds or non-domiciled
The JFSC has also published a Code of Practice for certified
funds which was updated on 22 July 2013 and includes a Jersey
Expert Fund Guide, a Jersey Listed Fund Guide, a Guide to Jersey
Open-Ended Unclassified Collective Investment Funds Offered to the
General Public and a Jersey Eligible Investor Guide.
Other factors that the JFSC will take into account include: (i)
the person responsible for attracting investors; (ii) whether or
not the fund is linked to specific persons; and (iii) whether or
not one organization has overall responsibility for all aspects of
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).