Jersey: JPF - Jersey, Proportionate, Fast!

A quick and user-friendly introduction to the new Jersey Private Funds regime.

The News

The Jersey Financial Services Commission ("JFSC") has on 15 March 2017 announced a new private funds guide ("JPF") with a view to implementing the regime on 18 April 2017. The JPF will take the key aspects of the hugely popular Jersey 'very private' fund regime and expand their application so that a vastly increased number of privately-placed funds can benefit from a proportionate and fast-track regulatory process.

So what's changing?

Essentially, any Jersey private fund vehicle (or virtually any non-Jersey private fund vehicle with a relevant connection to the Island – eg a non-Jersey limited partnership with a Jersey general partner) can now become a JPF Fund. A JPF Fund is granted a quick and simple consent under the Control of Borrowing (Jersey) Order ("COBO") which will enable it to make up to fifty offers to investors who qualify as 'professional' investors (or subscribe for interests with a value of at least £250,000). The COBO consent will be issued by the JFSC to qualifying funds within forty-eight hours of the application being received.

The JFSC had previously applied a similar proportionate and light-touch approach to very private structures (that permitted up to fifteen offers) which resulted in a large number of those structures being established – they have been seen in particular as ideal for club investments, funds of one and co-investments. The wider scope will now allow many more funds to benefit from even more rapid fast-track authorisation with (potentially) reduced initial and ongoing costs.

How does this work with AIFMD?

Like all Jersey funds, if a JPF Fund is to be marketed into the EU/EEA then Jersey's AIFMD overlay will apply in the form of an additional AIF Certificate granted to the structure and a FSB/AIFSB permit granted to any Jersey AIFM – this is particularly straightforward for sub-threshold managers (ie those managing less than €500m in closed-ended unleveraged funds or €100m where funds are open-ended or leveraged). A streamlined approach requiring compliance with certain key aspects of AIFMD (disclosure, reporting, transparency and anti-asset stripping) applies for managers above those thresholds.

Once the additional certificate/permit is issued, a JPF Fund may be marketed into the EU/EEA using the various national private placement regimes – a well-worn path for Jersey funds. As and when the AIFMD passport is introduced, it is anticipated that JPF Funds will also be eligible for passporting.

What key requirements are there?

A JPF Fund:

  • can be established as a Jersey company (including a protected cell company, an incorporated cell company or any cell thereof), limited partnership (LP), limited liability partnership (LLP), separate limited partnership (SLP), incorporated limited partnership (ILP), or unit trust;
  • can also be established as virtually any non-Jersey structure so long as a COBO consent is required;
  • is not required to appoint any Jersey-resident directors (or Jersey-resident GP or trustee directors, as appropriate);
  • can be open-ended or closed-ended;
  • is not required to appoint an auditor;
  • must appoint a Jersey-regulated administrator (the "Designated Service Provider") to ensure that the JPF criteria and applicable AML legislation are complied with and to carry out due diligence on the promoter;
  • can only be marketed to specific categories of investors including those a) who subscribe for interests with a value of at least £250,000 and/or b) who qualify as 'professional' (eg whose ordinary business or professional activity includes acquiring or managing investments or who have at least US$1m of investable assets);
  • and must procure that investors receive and receipt a specified form of investment warning.

Can I convert existing structures to the new JPF regime?

Yes. So long as the JPF criteria are met, any existing structure can apply to convert. The existing Jersey very private, COBO-only and private placement fund regimes will continue to apply to structures that do not wish to convert but will be superseded by the JPF regime and so no new applications under those regimes will be possible.

Are there any other benefits?

Like the existing very private and private placement regimes, it will be possible for JPF Funds to benefit from Jersey 'professional investor regulated scheme' status such that any Jersey SPV GP, trustee, investment manager and/or investment adviser will be exempt from regulation under the Financial Services (Jersey) Law (save in some circumstances where the AIFMD overlay applies).

A JPF Fund is not required to issue an offer document but where one is issued, there are very few prescribed content requirements (assuming no AIFMD disclosure is applicable).

Jersey JPF Funds (and any Jersey SPV GP, trustee, investment manager or investment adviser) will either be tax transparent or subject to the 0% rate of Jersey income tax.

Further, Jersey fund and manager structures are expected to provide significant levels of certainty in the face of both BEPS and Brexit. Jersey's well-established funds infrastructure means it is relatively simple to build significant substance where required and the Island's position as a jurisdiction which is an established third country from an EU perspective while maintaining distinctive constitutional links with the UK should benefit both global managers seeking to access EU capital and EU managers seeking to access UK capital post-Brexit.

Sounds great – who should I speak to?

Carey Olsen Partners Robert Milner and Daniel O'Connor were members of key industry working groups which were directly involved with the formulation of the JPF. Since July 2014, our funds team has advised on 43 per cent of all new funds business in Jersey (source: 2016 Monterey Insight Jersey Funds Report) – twice the number of our nearest rival. We know the new regime inside out and will be happy to answer any questions you may have and work with you and your advisers in structuring your next 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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
28 Nov 2017, Conference, London, UK

BVCA's tax, legal and regulatory conference takes place on 28 November 2017 at Savoy Place, London.

24 Jan 2018, Conference, St Peter Port, Guernsey

In association with the Guernsey Training Agency, we are pleased to offer a unique, interactive event that will explore the role of integrity in the modern employment relationship, with a particular focus on the financial services sector.

15 Mar 2018, Seminar, St Peter Port, Guernsey

We are once again sponsoring C5 Fraud, Asset Tracing & Recovery which is due to take place on 15-16 March 2018 (tbc) in Geneva.

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
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).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.