Key Takeaways
Guernsey has a number of fund regulatory regimes in place, setting out the requirements to obtain the necessary permissions from the Guernsey Financial Services Commission.
The best regulatory regime for a particular fund depends on a number of differing factors.
This guide sets out (in table form) a summary comparison of the key features of the different fund regulatory regimes available in Guernsey.
Introduction
This memorandum describes certain features of Guernsey fund regimes. It is intended to be a summary only, and is not exhaustive. It is not a substitute for detailed legal advice, which can be obtained from your usual Walkers contact or any of the Walkers partners listed at the end of this memorandum.
Private Investment Fund | Registered Fund | Authorised Closed-Ended Fund | Authorised Open-Ended Fund | |
Category of fund | Open or closed | Open or closed | Closed | Open – Class A, Class B and Class Q |
Type of fund vehicle | Company (including PCC, ICC), limited partnership or unit trust | |||
Is fund vehicle regulated? | Yes – very light touch | Yes – light touch | Yes | Yes – level varies between the classes |
Guernsey regulated manager required? | Not mandatory, except for "Manager PIF" | Not mandatory | Not mandatory | Not mandatory |
Regulatory application timeframe | One business day (any manager licence done at same time) | Three business days (plus 10 business days for any manager licence) | Six to eight weeks (plus four weeks for any manager licence), except that Qualifying Investor Fund is three business days (plus 10 business days for any manager licence) | Six to eight weeks (plus four weeks for any manager licence) |
Investor restrictions |
Manager PIF – max 50 investors (max 30 new investors over 12 months); only investors able to sustain loss; no limits on marketing QPI PIF – max 50 investors; only "qualifying private investors"; offers limited to 200 investors Family PIF – investors must be part of same "family group" |
None | None, except that only "qualified investors" can invest in "Qualifying Investor Funds" | None, except that only "qualifying professional investors" can invest in a Class Q Fund |
Guernsey tax treatment of fund vehicle | Company and unit trust – 0% or exempt Limited partnership – not taxable | |||
Economic substance rules | Fund vehicle is exempt from economic substance requirements, unless it is a "self-managed fund" Licensed manager is subject to economic substance requirements | |||
Local directors of corporate fund required? | No – but economic substance requirements apply if "self-managed fund" | |||
Other local service providers | Administrator and custodian (if openended) | Administrator and custodian (if openended) | Administrator | Administrator and custodian |
Information memorandum content requirements | None, except that QPI PIF investors must be provided with and acknowledge a disclosure statement covering risk disclosures, the regulatory status of the PIF and investor suitability | Yes | Yes | Yes |
AIFMD – eligible for marketing in UK or EU? | Yes | |||
Audit requirement | Yes | |||
Reporting to investors |
Accounts required Other reports allowed |
Accounts required Other reports allowed |
Accounts required Other reports allowed |
Accounts and annual reports required Half-yearly reports for Class A Fund |
Reporting to Guernsey regulator | Very limited | Limited | Limited | More detailed |
Regulatory requirements applicable to Guernsey manager | None | Audit, capital adequacy and conduct of business requirements | Audit, capital adequacy and conduct of business requirements | Audit, capital adequacy and conduct of business requirements |
Vehicle available for Guernsey Green Fund and Natural Capital Fund regimes? | Yes | Yes | Yes | Yes |
Regulatory fee - application |
£4,795 – fund £3,080 – manager |
£4,790 – fund £3,080 – manager |
£4,235 – fund (£4,795 for Qualifying Investor Fund) £3,080 – manager |
£4,795 – fund £3,080 – manager |
Regulatory fee - annual |
£4,235 – fund £2,205 – manager |
£4,235 – fund £2,205 – manager |
£4,235 – fund £2,205 – manager |
£4,235 – fund £2,205 – manager |
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.