Innovative Fund Structure Launches In Jersey

by Amanda Banks, Tax-News.com, London

03 November 2010

Herald Fund Services Limited (HFSL), working in conjunction with the Jersey law firm Crill Canavan, has established the “Comprehensive Investment Incorporated Cell Company” (CIICC), the first new fund product to provide managers with a simpler and more cost-effective route to bring fully regulated Jersey Expert Funds to market.

The new product enables advantage to be taken of Jersey’s reputation for regulatory excellence whilst reducing the set-up costs to a level more often associated with other jurisdictions, making it easier for fund managers of start-up funds to base them in Jersey.

Mike Capraro, Managing Director of HFSL, is confident that the availability of products such as the CIICC will contribute to the continued success of Jersey’s funds industry: “Jersey leads the way in the regulation of international finance centres but regulatory excellence comes at a price to the customer and this premium can be an obstacle, particularly for start-up fund managers."

“By commoditizing the set up of a fund within a product like the CIICC, we’re able to bring costs down to the level of those of competing jurisdictions such as Malta and Cayman. This is achieved whilst maintaining the high level of regulation for which Jersey is so well known,” he added.

All cells within the CIICC are individually authorized and regulated by the Jersey Financial Services Commission (JFSC) as Expert Funds. They share common service providers, such as the administrator, auditor, custodian and banker, but are unique from one another in that they appoint their own separate investment managers and boards of directors. Their operational differences are outlined in an appendix to the main standard form offering document, this appendix essentially forming the offering document for that cell.

In order to meet the objective of cost effectiveness, all the common service providers have set their fees at a more acceptable level.

Capraro has also welcomed the approach of the JFSC to the CIICC: “The JFSC’s willingness to work with us on the CIICC has been integral to the development of the product and has been greatly appreciated. Although this concept exists in other jurisdictions in the form of a protected cell company, the JFSC’s feedback in discussions helped confirm the structure of the CIICC.”

He added: “In order to assist in the selection of Jersey as the place to base funds, it is vital that their establishment is made as straightforward as possible, and the CIICC goes along way to achieving this goal for certain types of fund.”

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