The Guernsey Financial Services Commission (GFSC) has updated the Private Investment Fund Rules, to offer three alternate PIF routes, effective from 22 April 2021.
The new PIF options follow on from a GFSC consultation with industry in 2020, and in addition to the existing Protection of Investors (POI) Licensed PIF (Route 1), add two new options – the Qualifying Private Investor PIF (Route 2) and the Family Relationship PIF (Route 3).
The Three Guernsey Routes
- Route 1 – the POI Licensed Manager PIF is the original PIF model whose criteria is; fewer than 50 investors (although no limit on the number of potential investors who can be marketed to), limits on investors in and out in a 12 month period, and, must have a Guernsey resident POI Licensed Manager appointed.
- Route 2 – the Qualifying Private Investor (QPI) PIF is a new route which does not require a GFSC licensed Manager and is aimed at investors who meet the criteria of being a QPI i.e. able to evaluate the risks and bear the consequences of the investment. The Guernsey resident licensed designated Administrator of a QPI PIF is required, as part of the application process, to declare to the GFSC that it has effective procedures in place to ensure the fund is restricted to sophisticated investors only.
- Route 3 – the Family Relationship PIF is the second new route that does not require a GFSC Licensed Manager. This route allows for the creation of a bespoke private wealth structure as a fund and requires a family relationship between investors. This route is only open to investors who either share a family relationship or who are an 'eligible employee' of the family and meet the criteria of being a QPI.
Interesting Features – Applicable to All Three Routes
Points common to all three routes are:
- a one business day turnaround at the GFSC for the PIF applications;
- no requirements for private placement memorandum (PPM) or other information particulars, although it is common for a PPM style document to be provided to potential investors;
- can be closed-ended or open-ended;
- must be audited; and
- conflict of interest requirements apply to the directors managing the PIF.
Dixcart and Additional Information
Dixcart is licensed under the Protection of Investors (Bailiwick of Guernsey) Law 1987 to offer PIF administration services and also holds a full fiduciary license granted by the Guernsey Financial Services Commission.
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.