Details of the new fund regime were first announced in late 2007. Commenting at the time, Geoff Cook, Chief Executive of Jersey Finance Limited, announced that:

“This is a significant step forwards for the Funds Industry in Jersey and is seen as a natural progression in our goal to become the European jurisdiction of choice for the Alternative Funds sector. Fund promoters of high net worth, sophisticated investors and institutions will have greater flexibility when choosing Jersey and will be able to structure their funds to suit both commercial and tax requirements.”

The Unregulated Funds Regime aims to provide fund promoters with certainty, flexibility and speed when establishing new funds and adds to the range of existing regulated fund regimes already available from Jersey.

Robert Kirkby, Technical Director, Jersey Finance, commented this week:

“Jersey is now a much more attractive prospect for the typical hedge fund or private equity manager who invariably wants a fund set up and ready to trade in short timescales with no local minimum regulatory input. When combined with Jersey’s convenient time zone and its existing reputation for funds business, we believe the new regime is a welcome addition to our capabilities as a funds jurisdiction and will be particularly attractive to European managers and promoters.”

Within the new regime, there is no audit requirement, no limit on the number of investors, no investment or borrowing restrictions and no requirement for Jersey service providers. Promoters are offered a choice of fund vehicle including company, protected cell or incorporated cell company, unit trust or limited partnership.

Two categories of new funds have been launched:

• Unregulated Eligible Investor Funds which may be open or closed ended and are restricted to sophisticated investors (including those who make a minimum initial investment or commitment of $US 1 million or equivalent).
• Unregulated Exchange Traded Funds which must be listed on one of 50 pre-approved stock exchanges including London, New York, the Channel Islands Stock Exchange, AIM, Nasdaq and Euronext.

Mr Kirkby added:

“Since Jersey announced its intention to launch the unregulated model alongside its existing fund categories, there has been considerable interest from the market and we anticipate it will be only a short time before the first funds in these classes are established."

“Jersey has been experiencing record growth in fund assets under administration and in particular has attracted considerable new business in the alternative fund sector, which now accounts for more than half the total value of the funds industry. The streamlined regulatory regime, which began with the introduction of the Expert Funds Guide in 2004, has been one of the driving forces behind this growth and the introduction of unregulated categories now completes the Island’s regulatory offering for the funds industry.”