Guernsey FSC To Fast Track Fund Licence Applications

by Jason Gorringe, for LawAndTax-News.com, London

27 May 2008

The Guernsey Financial Services Commission (FSC) has commenced a public consultation on a proposal to fast track the application process for specified licensees associated with Qualifying Investor Funds or Registered Closed-ended Investment Funds.

The main thrust of the proposal is that a Licence Assessment Committee will be convened to consider the issue of a licence under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 (the POI Law) within 10 business days of receipt of a complete formal application, together with confirmations from an appropriately licensed Guernsey service provider to the Commission that:

• They have performed sufficient due diligence to be satisfied that the beneficial owners or controllers of, and relevant parties to, the applicant for a licence are fit and proper and meet the requirements as set out in the POI Law and that in this respect consideration has been given to all of the issues set out in the Guidance Document issued by the Commission;
• They have undertaken sufficient due diligence to confirm that the application for a licence under the POI Law which includes the relevant application form and supporting documentation and information, is complete and accurate.

The introduction of the Qualifying Investor Fund regime in February 2005 and the Registered Closed-ended Investment Fund regime in February 2007 provided fund promoters and their Guernsey regulated service providers with two fast track application processes for defined investment funds, giving a guaranteed response time from the Commission.

Since the introduction of the two regimes, a significant number of fund applications have been made under them, and at the same time associated licence applications under the the POI Law have been made for parties seeking to provide management services to the funds.

Due to the statutory obligations imposed on the Commission when considering applications for licences under the POI Law, which do not apply in the same way to fund applications, it is not possible for the Commission to guarantee considering applications for licences in the same time scale that apply to the two fast track fund application processes.

The Commission has acknowledged that this apparent “mis-match” in timescales is not ideal and proposes to introduce a regime which will reduce the timescale for the consideration of licence applications in specified cases.

Due to the statutory obligations referred to above it is not possible to reduce the relevant timescale to that applying to the associated fund applications, but it is considered that the proposed regime will introduce certainty of response in respect of licence applications made to the Commission.

The Commission proposes to introduce a framework applicable to licence applications under the POI Law for parties seeking to provide management services to Qualifying Investor Funds or Registered Closed-ended Investment Funds.

Parties seeking to conduct activities such as administration or custody for such funds or who intend to conduct restricted activities in connection with other types of investment fund business and/or non-fund business will need to apply and be assessed under the Commission’s standard licence application process.

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