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Jersey To Introduce 72-Hour Fund Approval Process

by Robin Pilgrim,, London

06 October 2006

The Jersey Financial Services Commission (JFSC) is planning to introduce a streamlined 72-hour approval procedure for many types of listed investment funds.

Jersey successfully introduced an Expert Fund regime last year, and now proposes that closed-ended investment funds listed on European and other leading stock exchanges including The Channel Islands Stock Exchange, should be subject to the streamlined approval procedure. The regime will be available to private equity, property and other alternative investment funds such as hedge funds and funds of hedge funds.

David Carse, Director General of the JFSC, announced details of the new Listed Funds Guide in London on Wednesday, at the Funds seminars held by Jersey Finance in association with the Jersey Funds Association.

It is proposed that the new regime will operate in a similar fashion to the existing Expert Fund regime, except that there will be no selling restrictions attached to these investment funds. The JFSC has concluded that the regulatory environment of products listed on recognised exchanges and promoted by established sponsors already provides an appropriate level of investor protection and therefore a lighter level of regulation in relation to authorisation is considered appropriate.

In order to take advantage of the new regime, it is anticipated that a fund will need to meet a number of criteria including:

  • Having a listing on a recognised stock exchange or market;
  • Being formed as a Jersey closed-ended company;
  • Having a majority of independent directors on the board;
  • Possessing an investment manager with appropriate experience and one which is regulated in its home jurisdiction (or is otherwise approved by the JFSC);
  • Satisfying the JFSC’s principles of corporate governance;
  • Meeting other requirements similar to those that apply to the Expert Fund regime.

Gary Clark, Chairman of the Jersey Funds Association, commented:

“The Commission intends to publish its proposals in a new Jersey Listed Fund Guide, which has been prepared in consultation with the Jersey Funds Association, later this month. The intention is to introduce the new regime officially before the end of the year.

“We have consistently indicated that whilst the Expert Fund regime has been a significant success for the funds industry in Jersey, with more than 250 Expert Funds now established in the Island since its launch in 2004, the Island must continue to innovate and enhance its funds regime. The Listed Fund Guide is the latest initiative.”

The proposal outlined relates to companies although the Commission and the Industry are consulting on extending this regime to Jersey limited partnerships and unit trusts at a later date.

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