Reporting on Thursday, the Jersey Evening Post announced that six split-capital trusts are currently under JFSC scrutiny, and predicted that: 'Hundreds of investors stand to lose out following this week's announcement that Jersey-based Leveraged Income Fund is to be put into receivership'.

Speaking to the Evening Post, JFSC director-general, Richard Pratt revealed that:

'We are co-operating with the channels in London, particularly in relation to trusts operating out of Jersey, and we are also examining the extent to which Jersey operations have been meeting the regulations here in the Island.'

However, he suggested that because Jersey's regulatory requirements with regard to closed-ended investment trusts are more stringent than in the United Kingdom, as a general rule, investors in Jersey-based split capital trusts would have been better informed of the risks involved:

'What we would do is insist on a proper prospectus, stating, where appropriate, that these types of trusts are only appropriate for the expert investor. That would be true for any closed-ended investment trust and has been so since 1998, when the Collective Investments Law was brought in,' he explained to the JEP.