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 ClosedEnded Fund | Authorised OpenEnded 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 | 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 |
Qualifying PIF ("QPIF") – investors must meet qualifying investor criteria (ie suitably sophisticated investors) 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 open-ended) | Administrator and custodian (if open-ended) | Administrator | Administrator and custodian |
| Information memorandum content requirements | None, except that QPIF investors must provide a written acknowledgment as to their understanding of the regulatory status and risks of investing in the QPIF and confirmation of their ability to withstand potential economic consequences of their investment | Yes | Yes | Yes |
| AIFMD – eligible for marketing in UK or EU? | Yes | |||
| Audit requirement | Yes, except for the PIF which has no audit requirement | |||
| 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 |
£4,795 – 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.
