Comparative Guides

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4. Results: Answers
Alternative Investment Funds
1.
Legislative and regulatory framework
1.1
In broad terms, which legislative and regulatory provisions govern alternative investment funds in your jurisdiction?
Jersey

Answer ... The principle pieces of legislation governing funds in Jersey is the Collective Investment Funds (Jersey) Law 1988 (CIF Law) for public funds and the Control of Borrowing (Jersey) Order 1958 (COBO) for private funds, and their related Codes of Practice and Guides issued by the Jersey Financial Services Commission (the JFSC). The Financial Services (Jersey) Law 1998 (FSJL) applies to fund service providers.

For more information about this answer please contact: Dilmun Leach from Collas Crill
1.2
Do any special regimes or provisions apply to specific types of alternative investment funds?
Jersey

Answer ... Jersey has various funds products each with their own sub-set of rules. For example, the JFSC has published the Jersey Private Fund Guide in relation to Jersey Private Funds, applicable for up to 50 professional investors and where there are fewer than 50 offers made to professional investors; and the Code of Practice for Certified Funds (Fund Codes), which contains a Guide for each of Expert Funds, Listed Funds, and Open-Ended Unclassified Collective Investment Funds Offered to the General Public (OCIF Guide).

Similarly, Recognised Funds, which are the most highly regulated funds available in Jersey for retail investors, are governed by the Collective Investment Funds (Recognized Funds) Rules 2003 (Recognised Funds Rules) in addition to being subject to the CIF Law.

If the fund will be an AIF that is marketing into Europe within the meaning of the EU Directive known as the AIFMD, then it will need to adhere to the relevant provisions of the Jersey AIF Codes. The Jersey AIFMD regime broadly mirrors the requirements of AIFMD, and the limited provisions that would generally apply to a Jersey fund marketing into Europe using national private placement rules relate to disclosure, reporting and asset stripping.

More broadly, depending on the structure of the fund, the Jersey entities making up the structure will be subject to the legislation governing the type of entity used, for example a company will be subject to the Companies (Jersey) Law 1991, and a limited partnership will be subject to the Limited Partnerships (Jersey) Law 1994.

Fund service providers will be subject to the FSJL.

For more information about this answer please contact: Dilmun Leach from Collas Crill
1.3
Do the legislative and regulatory provisions governing alternative investment funds have extra-territorial reach?
Jersey

Answer ... Jersey's law and regulation with regards to investment funds generally only applies to Jersey registered entities, wherever the activities are carried on, and also activities carried on by non-Jersey entities 'in or from within' Jersey. There is a specific regime applicable to Jersey service providers who provide their services to non-Jersey funds.

For more information about this answer please contact: Dilmun Leach from Collas Crill
1.4
Are any bilateral, multilateral or supranational instruments in effect in your jurisdiction of relevance to alternative investment funds?
Jersey

Answer ... The JFSC has entered into bilateral cooperation agreements with 27 EU Member States (including the UK) to allow Jersey funds to be marketed in those jurisdictions by way of their respective national private placement regimes. The JFSC also entered into a memorandum of understanding with the UK's Financial Conduct Authority in March 2019 to give further certainty to Jersey fund manager in light of Brexit.

For more information about this answer please contact: Dilmun Leach from Collas Crill
1.5
Which bodies are responsible for regulating alternative investment funds in your jurisdiction? What powers do they have?
Jersey

Answer ... The JFSC is responsible for regulating alternative investment funds in Jersey. The JFSC has broad powers under COBO and the Control of Borrowing (Jersey) Law 1947 for private funds, and the CIF Law and FSJL for certified funds. The JFSC has a range of powers including civil financial penalties, to make directions and public statements, and breaches of the primary laws noted above can be a criminal offence where the penalty can be a prison term or a fine or both.

For more information about this answer please contact: Dilmun Leach from Collas Crill
1.6
To what extent do the regulators cooperate with their counterparts in other jurisdictions?
Jersey

Answer ... The JFSC works closely with its counterparts in other jurisdictions, notably the UK's Financial Conduct Authority with whom it signed a memorandum of understanding in March 2019 giving Jersey fund managers additional certainty around accessing UK capital in light of Brexit. The JFSC is also a founder member of The Group of International Finance Centre Supervisors.

Jersey is a BEPS Associate, a member of the BEPS Inclusive Framework and a signatory to the multilateral instrument that forms part of the BEPS framework.

Jersey has also recently introduced the Taxation (Companies – Economic Substance) (Jersey) Law 2019 (the Economic Substance Law) which introduces new standards for economic substance for Jersey entities as part of an initiative led by the EU Code of Conduct Group (Business Taxation). The Economic Substance Law makes provision for information on Jersey companies to be shared with the tax authorities in other jurisdictions. The Guidance Notes on the Economic Substance Law have been co-written by the authorities in Jersey, Guernsey and the Isle of Man.

Jersey signed an agreement with the United States in December 2013 in respect of FATCA reporting. The Jersey Comptroller of Taxes collates the data shared with the US Internal Revenue Service, and the relevant information must be submitted to the Comptroller by 30 June each year.

In January 2016 Jersey passed the Taxation (Implementation) (International Tax Compliance) (Common Reporting Standard) (Jersey) Regulations which implement the OECD's Common Reporting Standard (CRS) in Jersey. CRS forms are required to be submitted to the Jersey tax office and the relevant information is then shared with the participating jurisdictions. Separate agreements also exist for the automatic sharing of tax information with Guernsey and the Isle of Man.

For more information about this answer please contact: Dilmun Leach from Collas Crill
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Alternative Investment Funds