SPV's Allowed To Operate As Protected Cell Companies In Guernsey

Mandy Robinson, Tax-news.com, London

09 February 2001

The Guernsey Financial Services Commission (GFSC), after consultation with the States' Advisory and Finance Committee, has added further regulations to the Protected Cell Companies Ordinance 1997.

Under the new legislation, entitled The Protected Cell Companies (Special Purpose Vehicle) Regulations 2001, two further classes of company have been permitted to be incorporated as, or converted into, a protected cell company in Guernsey.

Protected cell company status under the 1997 Ordinance is generally reserved for authorised collective investment schemes, insurance companies and closed-ended investment companies. A provision in the law allows for the GFSC to add any class or description of company that is detailed under the commission's regulations.

The GFSC says that the first additional class of company is one that is 'established principally for the purpose of issuing bonds or other debt securities where the repayment is to be funded from the proceeds of the company's investments.'

The second type of company is one that performs the 'carrying on of finance business' with the exception of those supervised under specific laws such as the Protection of Investors Law, the Insurance Business Law, the Banking Supervision Law and the Regulation of Fiduciaries.

The new law took full effect from 6 February 2001.

A full statement on the Protected Cell Companies (Special Purpose Vehicle) Regulations 2001 can be found at: http://www.gfsc.guernseyci.com/documents/pcc_regulations_2001.pdf

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